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Resource recovery systems costs
Con5ervah-i ?ergamon
$ Recycling.
0361.3658/01013077
Voi. 3. pp. 77 - 89.
YO2.3oiO
Press Ltd., 1979. Plinted in Great Britain.
-RESOURCE RECOVERY SYSTEMS COSTS* BELA M. FABUSS, DAVID B. SPENCER and ROBERT E. SCHROEDER Raytheon Service Company, Burlington, Massachusetts, U.S.A.
Abstract - The investment cost, operating cost and overall economics of resource recovery plants haiidling 500 to 2 000 tons per day of municipal solid waste were determined. These plants recover only refuse derived fuel and ferrous metal from the waste. Additional economics have been developed for plants recovering other products.
INTRODUCTIOh In the year 1976 about 125 million tons of solid waste were collected in the United States. Most of this solid waste was generated in major urban areas. It is increasingly difficult to dispose of ehis solid waste by landfilling, since environmental regulations and expense are often prohibitive for obtaining additional fill areas within or near large municipalities. The disposal cost in many urban areas has already reached $13 -$15/tori and continues to rise. Incineration of solid waste has ceased to be a low cost disposal technique due to strict air pollutant emission regulations and substantial landfill requirements for the incinerator residue. The sale and recovery of refuse-derived fuel (RDF) and the metal and glass fractions of the solid waste can offer a viable alternative. This paper develops comparative economics for RDF-type resource recovery facilities. Various sizes and types of facilities are evaluated. Plants which recover RDF and ferrous metals have been evaluated at capacities of 250, 500 and 1 000 tons/shift (TPS) for either one or twoshift/day operations. Additionally, the 1 000 TPS facility is evaluated when additional products such as glass and non-ferrous metals are recovered. There is no question that when landfill costs are high, resource recovery can present an economical and ecologically sound method for handling solid waste. It is expected that over the next 10 yr at least 40, 1 000-ton/day (TPD) solid waste handling resource recovery facilities or their equivalent will be built in the United States to treat the solid waste generated in major urban areas. The cost of these facilities is subject to wide variations due to local factors such as products markets, transportation distances, landfill costs, contract methodology and method of financing. However, general comparisons can be made regarding the cost of facilities of varying capacities and complexities.
BASIC CONCEPTS OF RESQURCE RECOVERY A typical RDF resource recovery system is illustrated in the process flowsheet of Fig. 1. The process consists of shredding, air classification and magnetic separation and produces a refusederived fuel (RDF), ferrous scrap and a residue. This simplest system, termed a baseline system for the purposes of this paper, would utilize a sing1.e stage process. Up to 30 % of the solid
*This
paper was presentedat the First World Recycling Congress, Hasie, Switzerland, 6- 8 March !Y78. 77
78
BELA M. FABUSS, DAVID B. SPENCER and ROBERT L. SCHROEDER
waste would remain to be either landfilled or further processed. Several processing modules can be added to the baseline process to increase product quality and recover other products from the solid waste. These include: 1. RDF cleaning; 2. ferrous cleaning; 3. non-ferrous separation; 4. glass aggregate separation; 5. non-ferrous cleaning; 6. glass cleaning. RDF cleaning is illustrated in Fig. I while the other ‘optional processing modules’ are illustrated in Fig. 2. RDF cleaning (l), refers to the addition of secondary heavies shredding and secondary air classification to increase product recovery and screening the RDF product to improve the quality by removing grit and thus reducing the ash content. These added steps may be necessary for some users of RDF and unimportant for others. The other optional modules are: (2) ferrous cleaning and densification to improve cleanliness and reduce shipping cost, (3) recovery of a mixed ferrous metal by eddy current separation, (4) glass separation to produce a clean aggregate, (5) non-ferrous metal separation, into a light aluminum product and a heavy non-ferrous metal product and (6) glass cleaning by froth flotation to prepare a mixed color glass for remelting. Baseline
process
-
Light ferrous *
Equipment List
Heavy ferrous
I. Primary shredder 2. Skim classifier
7. Screen 8. Combustible shredder 9 Magnetic separator IO. Rotary screen I I.Secondory shredder IZSecondory oir classifier
--) Aluminum -Heavy non-
Fig. 1. Baseline process with fuel cleaning module.
Fig. 3 gives a typical layout for a 1 OCKI TPS facility showing the major elements of the plant and the space requirements required for a facility with all optional modules. Table 1 gives percentages of each product produced by such a facility, if located in the northeastern United States.
RESOURCE RECOVERY SYSTEMS CWXS
!4 Magnetic seporo~or 85. wn-ferrous se0clrator 31 Jig 33 Coarse materml woahcr 38. &sliming classifier 40aFlotation cell 40b.Devmtering screw 40c.Flototion cell 41 Wet mognet:c seporotor 42 Sand filter 1; ;o,W;; dy?r 51. 60. 62. 53.
Rod mili Differentml mognetlc Ferrous shredder Mqgnetlc sePOrotM
ii separator
I
Fig. 2. Optional modules.
~1 I Acres I. Admin.- non process ( 14 200 S.F.l 2. Processing building (50 400 S F.1 3. Storage building (48 820 S.F.) 4. Storage room (3 370 SF) 5. Tipping floor 132 580 S.F.1
Fig. 3. Site layout -
6 7 8 9. IO.
Garage orea (I 553 S .F. 1 Water process bldg. (2 830 SE) Elec. substation ti 440 S.F.) Compactor bldg. (4 224 S-F.) Garage area ( I 710 S.F 1
2 800 TPD (1 C00 ‘TPS) resource recovery plant.
80
BELA M. FABUSS, DAVID B. SPENCER and ROBERT L. SCHROEDER Table 4.
Products of a typical resource recovery plant Weight %
Product
66.30 6.65 0.43 0.32 0.04 8.72 2.86 5.14 9.54 _-
RDF Ferrous, light Ferrous, heavy Aluminum Heavy non-ferrous Glass, mixed color Sand Residue, heavy Residue, light waste
100.00
ECONOMIC
VARIABILITY
Before presenting any cost information, a word of caution is necessary. The most important cost figure for a project is normally considered to be the net disposal cost, which is often equated to the tipping fee. The net disposal cost is defined as follows:
Net disposal cost
=
Annual capital amortization cost
+
Operations cost
-
Net product revenues.
Since for resource recovery projects, the net disposal cost is the difference between large numbers, small percentage fluctuations in costs or revenues, can cause large fluctuations in the net disposal cost. This is best illustrated by a simple example. Table 2 shows that a 20 % increase in operating cost and a 20 crloreduction in revenue results in a 200 % change in the disposal cost. A 20 cr/oreduction in waste delivery results in a similar change in disposal cost. Since large scale RDF-type resource recovery projects are currently in the demonstration stages, variations in operating costs and revenues of 20 % could be considered conservative at this stage of the technology development. Thus any figures estimating net disposal cost should be viewed with caution.
Table 2. Disposal cost variations Case 1
Case 2
Original estimate I%millions)
Compound 20 % variation (3 millions)
Case 3 20 % Reduction in waste delivered (!I millions)
4.4 5.0
4.4 6.0 (+20 %)
4.4 5.0
(7.0)
(5.6) (- 2Q S)
(5.6) (- 20 o/o)
costs: capital amortization operations Revenues: net product sales Net: disposal cost Tonnage Net disposal cost/ton
2.4 520 000 $4.62
4.8 520 000 $9.23 (+ 200 D/o)
3.8 416 OKI (-20 %) $9.13 (+ 198 vo)
a1
RESOURCE RECOVERY SYSTEh’tS COSTS
Moreover, it should be clear that the cost of a project is heavily dependent on the method of contracting, accounting methods, and financing considerations. Table 3 shows that the cost of construction of the Monroe County, New York resource recovery facility represents only 54 To of the total project. cost. Table 4, developed for the Bridgeport, Connecticut facility, shows that financing costs can add substantially to the capital requirements. In Bridgeport, Connecticut, special reserve funds and capitalized finance charges added 47 % to the capital cost. If these same costs were added to the Monroe County Project at the same relative percentage, the Monroe County Project would have a total capital COG of $78 million (1.47 x $53 million). Thus it can be seen that the total capital cost of a resource recovery project could be as much as two to three times the cost of constructing the RDF processing facility itself.
Table 3.
Cost of Monroe County, N.Y. resource recovery facility
Project cost items Facility construction Other capital: studies engineering/management start-up transportation equipment utility conversion cost construction & other contingencies
Table 4.
($ millions) $28.4 0.4 4.4 4.1 2.1 8.0 4.8
% 54 % 1 8 8 5 15 9
Subtotal
524.4
46 %
Total project cost
$52.8
100 %
Cost of Bridgeport, Corm. resource recovery facility
Project cost items
(S millions) $36.0
Total facility Financing and project development: capitalized interest working capital for debt service special capital reserve fund repay short term debt system development costs bond issuance costs
4.7 0.7 5.0 4.4 0.9 1.3
vo 68 %
9 1 10 8 2 2
Subtotal
$17.0
32 %
Total project cost
$53.0
loo %
For the purposes of this paper, it was assumed that the net value of the RDF after amortization of capital for conversion of the RDF user’s facilities, transportation cost for RDF, and incidental operating costs of discounts associated with the use or purchase of the RDF is $I .OO/million Btus. It was further assumed that no special reserve funds are necessary for the bonds, and that the capital cost includes only those items in the first 2 columns of Table 5.
82
BELA M. FABIJSS, DAVID B. SPENCER and ROBERT L. SCHROEDER Table 5. Elements of capital cost Construction cost
Facility cost
System cost
Land Site development and mobilization Building/Architectural Structural steel Foundations Process equipment Plumbing HVAC Electrical Escalation Contractor OH and P
Preliminary and final design Construction management Laboratory equipment Office furniture Initial spares and supplies Start-up costs Testing programs Testing and analyses 0 and M manuals Transportation equipment Maintenance equipment Contingencies Interest during construction Financial and legal fees
System development Engineering feasibility studies Market surveys RFP development Transfer stations* Fuel user’s conversion* Working capital* Capitalized interest expense Legal expenses Contingencies Special reserve funds* Financing costs Access roads Utilities Owner’s administration cost*
*Not included as capital costs in this study.
COST ESTIMATE Capital cost A detailed cost estimate has been prepared in 1977 dollars for a baseline 250, 500 and 1 000 TPS resource recovery facility. The baseline 1 000 TPS RDF system provides for weighing in and out of all refuse vehicles arriving at the site; tipping from 10 bays into a B2-ft deep storage pit which can store up to 2 000 tons of raw waste; two fully redundant processing lines having a design capacity of 70 tons/hr each, and consisting of primary shredding followed by air classification, secondary shredding and ferrous metal recovery; and storage for up to 1 000 tons of the RDF product on site. Noise control, explosion suppression, fire and hazard prevention, and instrumentation and control are included as part of this baseline facility. Capital cost includes all ‘construction’ and ‘facility’ costs as defined in Table 5. No costs were included for working capital, utility power plant conversion or transfer stations. For baseline systems, typical capital costs are provided in Table 6. It can be seen that total capital cost includes much more than the cost of construction. Significant additional costs involved in the completion of the facility are as follows: 1. Preliminary and final design (1.5 070and 6 % of the construction cost, respectively). 2. Construction and system management: construction supervision, documentation, product marketing, operator training, acceptance testing. 3. Initial inventory: non-process equipment, furniture, scale houses, laboratory, control center, tool crib, shops, store rooms, and initial spares. 4. Start-up: 6 - 8 month period to bring the plant to full capacity. 5. Interest to support the cash flow required during implementation. 6. Cost of bond issue. For a typical facility, total capital cost may exceed construction cost by a factor of 2 or more when all costs are included. Operating cost Operating and maintenance costs for this same 1 000 TPS facility, operating two processing shifts daily, are about $5 million annually. A typical summary of labor costs, utilities (i.e. water, fuel, sewer and electricity), facility maintenance and supplies, leasing costs and general administrative expenses is given in Table 7.
RESOURCE RECOVERY SYSTEMS COSTS
33
Table 6. Typical capital cost of ‘baseline’ resource recovery plants ” ($1 OOO($ 1977) 250
500
Site development Buildings: office and non-process process tipping and storage Equipment: process compaction
% 1 171 362 733 873 3 779 229
$ 1 523 445 1 147 1 291 5 057 340
$ 2 095 831 2 250 3 834’ 10 393 733
Subtotal Contingency 10 %
S
147 711
% 9 803 913
$20 136 2003
Total plant and equipment
8. 7 858
$10 776
$22 139
Design (preliminary and final) Construction and system management Initial inventory start-up Interest during construction Bond issue cost (2 vo)
f
%
$ 1660 1 550 392 4 083 3 239 675
Subtotal
% 4 331
% 6 191
$11 599
Total investment
$12 189
$16 967
$33 738
1063 8.18
1 479
2 941 5.66
Capacity, TPS
Debt service $1 WWyr (a%, 20 yr) Cost/Ton (f/Ton) -_
7
589 550 224 1611 1 113 224
809 754 288 2401 1600 339
5.69
loo0
*Increase cost caused by completely enclosed facility design due to climatic conditions. Table 7.
Typical operating cost for 1 000 TPS Facility ($) (two processing shifts, 2 000 TPD)
Labor Utilities: fuel electricity water - sewage Maintenance Lease cost Residue removal cost Insurance Subtotal Contingency and management fee (15 Ore)
$1470000 4ooo 662 000 13ooa 857 otxl 2cOooo 1112oocl 111 ooo 4429OOB 664cKW
Total operating cost
$5093cOo
Produce revenues The biggest question in calculating the revenues from an RDF type facility is determining the
net revenue from sale of the RDF product. If this fuel is sold to a public utility, the price paid would most likely be based on the cost of fuel replaced less any additional costs incurred by the utility for using the supplementary RDF fuel. On the surface, this may be easy to understand for a coal-fired fossil station; just measure the number of car loads of coal which were not used because of the substitution of RDF to determine the value saved. Unfortunately, the situation is more complicated than this. For example, if the quantity of RDF generated by the resource recovery facility exceeds the amount which can be burned by the utility under normal conditions, then the utility may be required to operate its boilers at higher loads over longer periods of time to use up the remaining RDF. Operating in such a manner may conflict with the most economical dispatch of power from the utility power grid, especially when nuclear power is available within the grid. Under these conditions, the value of the fuel would be equal to the
BELA M. FABLJSS, DAVID B. SPENCER and ROBERT L. SCHROEDER
84
value of coal replaced less a penalty for incremental cost of supplementary coal when the fossil units are employed rather than the nuclear units. Under certain extreme conditions, it may be necessary to pay the utility to take the RDF. The matter becomes even more complicated when the utility must invest its own funds to pay for engineering and construction costs associated with modifications to its power plant to accept or store the RDF. A deduction must be made for amortization of capital. Additionally, if the bottom ash from the boiler must be specially treated when co-firing pulverized coal and RDF, the utility will expect the incremental cost for both capital and operations to be deducted from the price paid for the RDF. If the quantity of bottom ash is increased by co-firing, the cost of bottom ash disposal will be greater, which will also show up as a deduction from RDF revenue. Other complications in pricing result from incremental costs for operation of the RDF receiving facility or from additional boiler maintenance, which may be required when burning RDF. There is no experience to date to aid in quantifying when burning RDF. There is no experience to date to aid in quantifying these factors. Also, each boiler is different and will have unique problems associated with it. In this study, the boiler-peculiar problems were ignored and it was assumed that the net value of RDF after all deducts and transportation charges is $1 .OO/million Btu. It was also assumed that the resource recovery facility and the utility are next to each other (e.g. Ames, Iowa and Chicago, Illinois) and thus no transportation charges were deducted. The product revenues vary directly with the tons of refuse processed. A fixed sales value for each product has been used. Revenues are based on recovery of just over 7 % of the waste stream as ferrous metals having a gross price of $19.30/tori,, or $14.30/tori,, net of transportation. This translates to $l.O2/ton of solid waste processed. Since the net value of RDF was assumed to be $13.20/tori** for recovery of a high quality product, the revenue contribution RDF per ton of solid waste is $8.22 for 62 VoRDF yield. This is somewhat higher than the Ames, Iowa experience where the value has been estimated to be about $7.80/tan. When the RDF contribution is added to the ferrous contribution, the total revenue adds up to $9.24/tori of solid waste processed for the baseline system. Typical projected system economics for these 250, 508 and 1 000 TPS baseline systems are summarized in Table 8 for both one and two shift operations. Capital cost is amortized over 20 yr at 6 % interest using level payments over the life of the loan. The net disposal cost is shown graphically in Fig. 4.
Table 8.
Typical net community cost baseline system 250 TPS 1 Shift 2 Shifts
Capital cost Capital amortization Operating cost Product revenues
$ : %
11 461 000 999000 1170000 601000
Net Cost
%
1 568 000
Tons/yr Net disposal cost
% $/Ton
*Based on 6 600 Btu/lb and $1 .OO/MBtu.
65 OQO 24.12
500 TPS 1 Shift 2 Shifts
12 189 000 1063000 2009000 1201000
15 854 000 138200 1725000 12OlOtXJ
1 871 000
1906000
130 000 14.39
130 000 14.66
16 967 OOQ 1479000 2995000 2402OCKl 2072000 260000 7.97
1 WOTPS 1 Shift 2 Shifts 31 998 OOO 2790000 3 127 Ooo 2402300 3515000 260000 13.52
33 738 Ooo 2941oacj 5093M10 4805000 3229QOO 52OQtM 6.21
RESOURCE RECOVERY SYSTEMS COSTS 25
24.12 ;
250
503
Facility mpoc~ty, ml Fig. 4. Net disposhl
Shift
cost for 250, 500 and 1 000
m2
TPS
TPS
Shifts capacity
baseline
faci!ities
operated for one or two mfts.
:t is particularly interesting to note that the net disposal cost for a 500 TPS facility operated one shift/day is virtually the same as for a 250 TPS facility operated two shifts/day. This results from the fact that there are large economies of scale in the operation of the 500 TPS facility which are sufficient to fully offset the added amortization of capital for a double size facility. This is not true when the cost of operating a 1 000 TPS facility for one shift is compared to the cost of operating a 500 TPS facility for two shifts. In the !atter case, a community having approximately 1 000 TPD of solid waste would be well advised to build a 500 TPS plant and operate it for two shifts, rather than building a 1 000 ‘TPS facility operated for one shift. By utilizing the invested capital fully, the net disposal cost would be $7.97/tori rather than $13.52/tan. On the other hand, a community which consistently generates 500 TPD of solid waste with some prospect of increased tonnage in the future would. be well advised to construct a 500 TPS facility and operate it for one shift/day rather than building a 250 TPS facility operated for two shifts. The added capacity would have very little effect on net disposal cost even though the capital cost should be much higher (i.e. $16 million v $12 million). The larger facility would also provide the flexibility to handle added waste which may be generated in the future simply by increasing the hours of operation. It is interesting to note that operation of the 1 000 TPS facility on the second shift is actually profitable. That is to say not only does the net disposal cost/ton drop substantially, from $13.52/tori to $6.21/tan, but the total annual net disposal cost drops from $3.52 million for a one shift operation to $3.23 million for the two shift operation. Thus, it costs less to operate the facility for two shifts/day than one shift/day. The reason for this is that the capital amortization is cut in half, the operating cost is slightly reduced and the revenues at the same time remain the same, if all these data are related to each ton of solid waste processed in the
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RESOURCE
RECOVERY
SYSTEMS
COSTS
Incremental optional modules
??
2 Shifts
Fig. 5. Capital
cost of optional
modules
at 1 Ooo TPS facility
capacity.
Incremenlal optlonul modules
I
n
Fig. 6. Net disposal
cost/ton
Sh,ft
lzzl
of waste processed
2 Shifts
for each module
addition
for 1 000 TPS facility.
facility. Although the Cost of%he 250 TPS/one shift operation seems high at %24.13/tan, if the capital cost was not arraortized but rather ‘written-off’ as is the capital cost of most public works projects, the net cost/ton would be only $8.75/tan. Qwtionad processing modules One cause for the large variation
in RDF resource recovery facility capital costs is ?he
88
BELA M. FABIJSS, DAVID B. SPENCER and ROBERT L. SCHROEDER
addition of optional processing modules for aluminum recovery, glass recovery or cleaning of the ferrous or RDF products to meet special customer requirements. At least in theory, these cost options are only added when the annual amortization cost and operating cost are more than offset by additional revenue income. Thus the increase in capital cost results in a net decrease in total annualized costs. As the number of optional modules is increased, capital costs increase as shown in Fig. 5, while disposal costs should decrease. Table 9 shows the net disposal cost calculations for each optional module for either one shift or two shift operation. Net disposal cost is shown graphically in Fig. 6. It is apparent from Fig. 6 that the net disposal cost decreases for a 1 WQ TPS, two shift operation with the system selected from the maximum of %6.59/tori to $5.31/tan. Each additional module, except fuel cleaning, pays its own way. Fig. 6 also shows for the same size facility, 1 000 TPS, these optional modules do not pay their own way when the facility is operated one shift/day. It has been assumed in this analysis that optional modules were added on an incremental That is, the cost of site development, tipping, storage, primary shredding, air classification, etc., were recovered 100% by the baseline process and only the incremental cost resulting from the addition of equipment associated with the additional module was charged to that module. (For example, no attempt was made to spread the cost of primary shredding among various modules since shredding was necessary whether or not those modules existed.) The interesting conclusion to be reached from an examination of Fig. 6 is that for a 2 Ooo TPD operation (1 000 TPS, two shifts) each optional module, with the exception of Type 2, fuel cleaning, pays its own way; but for lhe same size facility when operated one shift/day, none of these modules is economical and the baseline system provides the lowest cost. The other point worth noting is that the difference in net disposal cost between the case where only the baseline system is utilized and the case where all the optional modules are utilized, for either one or two shifts, is less than 15 %. It should be clear from the discussion of economic variability that this degree of variation is well within the limits of precision of the cost estimates themselves. Minor fluctuations in market values, landfill charges or operating costs could cause the economics of either situation to change significantly. For example, the landfill savings which are included in the operations costs assume a flat landfill charge for residue of $4/tori plus a landfill transportation cost of $3/tan. If the cost for landfill is much higher than this, which is likely over the long term, then the economics of materials recovery becomes more favorable. Basically, it appears that the decision to add optionai modules for a 1 000 TPS facility is a policy decision. If a decision maker believes that the value of material or landfill will escalate in the future at a rate that more than offsets the incremental operating costs, he would be wise to invest in these optional modules today provided sufficient capital funds can be obtained. Alternatively, a community may be wise to leave provisions for such additions to a later date when some of the major facilities, such as Monroe County or Bridgeport, successfully demonstrate the technical and economic viability of these material recovery processes. The capital costs at that time would be higher due to escalation, but the risk would be reduced. Those communities considering materials recovery for facilities at capacities less than 1 QOO TPD should recognize that they may not be fully self-supporting in the near term. This does not imply that a community should look at resource recovery from a short-term economic standpoint. Many communities may decide to employ materials recovery due to the environmental benefits which result. In this case the decision is a policy decision rather than an economic one. basis.
RESOURCE RECOVERY SYSTEMS COSTS
SENSITIVITY
a9
ANALYSIS
There are many basic operational and design decisicns which can significantly affect capital, operating and maintenance cost. Examples include plant processing capacity, redundancy, number of operating shifts, refuse storage capacity, and product storage capacity. For a 2 000 TPD facility, an added day’s storage of refuse can add $1.2 million to the capital cost. Building on a landfill requiring pilings and significant excavation of existing fill can add $1.4 million to the capital cost which otherwise may be sufficient to purchase a much more ‘avorable site for both construction and waste delivery.
CONCLUSIONS RDF-type resource recovery technology is in the dernonstration phase. The cost for %hese projects is subject to wide variations which depend on the quantity of waste to be processed, financing considerations, local product markets, and competitive conditions. Cost information developed in this report gives a good first approximation of the costs for an RDF resource recovery facility. Good correlation was obtained when costs developed under this study were compared to costs developed on a consistent basis from case studies. Because the net disposal cost is the difference between two large numbers (i.e. capital amortization plus operating costs less revenues), the net disposal cost is subject to wide fluctuations when minor changes in costs and revenues are experienced. For the decision maker, the absolute costs provided in this report are not as important as the relative costs. The difference in cost between one type of system and another shows the impact of specific management decisions on cost. ,-lcknow/edgemenfs - This work was sponsored by U.S. Environmenml Protection Agency, Washington, D.C. under Contract No. 68-01-4380. The authors gratefully acknowledge the assistance of Mr. Robert Holloway, Contracting Officer and Joseph O’Neil who developed the Operations and Maintenance data.
$ Recycling.
0361.3658/01013077
Voi. 3. pp. 77 - 89.
YO2.3oiO
Press Ltd., 1979. Plinted in Great Britain.
-RESOURCE RECOVERY SYSTEMS COSTS* BELA M. FABUSS, DAVID B. SPENCER and ROBERT E. SCHROEDER Raytheon Service Company, Burlington, Massachusetts, U.S.A.
Abstract - The investment cost, operating cost and overall economics of resource recovery plants haiidling 500 to 2 000 tons per day of municipal solid waste were determined. These plants recover only refuse derived fuel and ferrous metal from the waste. Additional economics have been developed for plants recovering other products.
INTRODUCTIOh In the year 1976 about 125 million tons of solid waste were collected in the United States. Most of this solid waste was generated in major urban areas. It is increasingly difficult to dispose of ehis solid waste by landfilling, since environmental regulations and expense are often prohibitive for obtaining additional fill areas within or near large municipalities. The disposal cost in many urban areas has already reached $13 -$15/tori and continues to rise. Incineration of solid waste has ceased to be a low cost disposal technique due to strict air pollutant emission regulations and substantial landfill requirements for the incinerator residue. The sale and recovery of refuse-derived fuel (RDF) and the metal and glass fractions of the solid waste can offer a viable alternative. This paper develops comparative economics for RDF-type resource recovery facilities. Various sizes and types of facilities are evaluated. Plants which recover RDF and ferrous metals have been evaluated at capacities of 250, 500 and 1 000 tons/shift (TPS) for either one or twoshift/day operations. Additionally, the 1 000 TPS facility is evaluated when additional products such as glass and non-ferrous metals are recovered. There is no question that when landfill costs are high, resource recovery can present an economical and ecologically sound method for handling solid waste. It is expected that over the next 10 yr at least 40, 1 000-ton/day (TPD) solid waste handling resource recovery facilities or their equivalent will be built in the United States to treat the solid waste generated in major urban areas. The cost of these facilities is subject to wide variations due to local factors such as products markets, transportation distances, landfill costs, contract methodology and method of financing. However, general comparisons can be made regarding the cost of facilities of varying capacities and complexities.
BASIC CONCEPTS OF RESQURCE RECOVERY A typical RDF resource recovery system is illustrated in the process flowsheet of Fig. 1. The process consists of shredding, air classification and magnetic separation and produces a refusederived fuel (RDF), ferrous scrap and a residue. This simplest system, termed a baseline system for the purposes of this paper, would utilize a sing1.e stage process. Up to 30 % of the solid
*This
paper was presentedat the First World Recycling Congress, Hasie, Switzerland, 6- 8 March !Y78. 77
78
BELA M. FABUSS, DAVID B. SPENCER and ROBERT L. SCHROEDER
waste would remain to be either landfilled or further processed. Several processing modules can be added to the baseline process to increase product quality and recover other products from the solid waste. These include: 1. RDF cleaning; 2. ferrous cleaning; 3. non-ferrous separation; 4. glass aggregate separation; 5. non-ferrous cleaning; 6. glass cleaning. RDF cleaning is illustrated in Fig. I while the other ‘optional processing modules’ are illustrated in Fig. 2. RDF cleaning (l), refers to the addition of secondary heavies shredding and secondary air classification to increase product recovery and screening the RDF product to improve the quality by removing grit and thus reducing the ash content. These added steps may be necessary for some users of RDF and unimportant for others. The other optional modules are: (2) ferrous cleaning and densification to improve cleanliness and reduce shipping cost, (3) recovery of a mixed ferrous metal by eddy current separation, (4) glass separation to produce a clean aggregate, (5) non-ferrous metal separation, into a light aluminum product and a heavy non-ferrous metal product and (6) glass cleaning by froth flotation to prepare a mixed color glass for remelting. Baseline
process
-
Light ferrous *
Equipment List
Heavy ferrous
I. Primary shredder 2. Skim classifier
7. Screen 8. Combustible shredder 9 Magnetic separator IO. Rotary screen I I.Secondory shredder IZSecondory oir classifier
--) Aluminum -Heavy non-
Fig. 1. Baseline process with fuel cleaning module.
Fig. 3 gives a typical layout for a 1 OCKI TPS facility showing the major elements of the plant and the space requirements required for a facility with all optional modules. Table 1 gives percentages of each product produced by such a facility, if located in the northeastern United States.
RESOURCE RECOVERY SYSTEMS CWXS
!4 Magnetic seporo~or 85. wn-ferrous se0clrator 31 Jig 33 Coarse materml woahcr 38. &sliming classifier 40aFlotation cell 40b.Devmtering screw 40c.Flototion cell 41 Wet mognet:c seporotor 42 Sand filter 1; ;o,W;; dy?r 51. 60. 62. 53.
Rod mili Differentml mognetlc Ferrous shredder Mqgnetlc sePOrotM
ii separator
I
Fig. 2. Optional modules.
~1 I Acres I. Admin.- non process ( 14 200 S.F.l 2. Processing building (50 400 S F.1 3. Storage building (48 820 S.F.) 4. Storage room (3 370 SF) 5. Tipping floor 132 580 S.F.1
Fig. 3. Site layout -
6 7 8 9. IO.
Garage orea (I 553 S .F. 1 Water process bldg. (2 830 SE) Elec. substation ti 440 S.F.) Compactor bldg. (4 224 S-F.) Garage area ( I 710 S.F 1
2 800 TPD (1 C00 ‘TPS) resource recovery plant.
80
BELA M. FABUSS, DAVID B. SPENCER and ROBERT L. SCHROEDER Table 4.
Products of a typical resource recovery plant Weight %
Product
66.30 6.65 0.43 0.32 0.04 8.72 2.86 5.14 9.54 _-
RDF Ferrous, light Ferrous, heavy Aluminum Heavy non-ferrous Glass, mixed color Sand Residue, heavy Residue, light waste
100.00
ECONOMIC
VARIABILITY
Before presenting any cost information, a word of caution is necessary. The most important cost figure for a project is normally considered to be the net disposal cost, which is often equated to the tipping fee. The net disposal cost is defined as follows:
Net disposal cost
=
Annual capital amortization cost
+
Operations cost
-
Net product revenues.
Since for resource recovery projects, the net disposal cost is the difference between large numbers, small percentage fluctuations in costs or revenues, can cause large fluctuations in the net disposal cost. This is best illustrated by a simple example. Table 2 shows that a 20 % increase in operating cost and a 20 crloreduction in revenue results in a 200 % change in the disposal cost. A 20 cr/oreduction in waste delivery results in a similar change in disposal cost. Since large scale RDF-type resource recovery projects are currently in the demonstration stages, variations in operating costs and revenues of 20 % could be considered conservative at this stage of the technology development. Thus any figures estimating net disposal cost should be viewed with caution.
Table 2. Disposal cost variations Case 1
Case 2
Original estimate I%millions)
Compound 20 % variation (3 millions)
Case 3 20 % Reduction in waste delivered (!I millions)
4.4 5.0
4.4 6.0 (+20 %)
4.4 5.0
(7.0)
(5.6) (- 2Q S)
(5.6) (- 20 o/o)
costs: capital amortization operations Revenues: net product sales Net: disposal cost Tonnage Net disposal cost/ton
2.4 520 000 $4.62
4.8 520 000 $9.23 (+ 200 D/o)
3.8 416 OKI (-20 %) $9.13 (+ 198 vo)
a1
RESOURCE RECOVERY SYSTEh’tS COSTS
Moreover, it should be clear that the cost of a project is heavily dependent on the method of contracting, accounting methods, and financing considerations. Table 3 shows that the cost of construction of the Monroe County, New York resource recovery facility represents only 54 To of the total project. cost. Table 4, developed for the Bridgeport, Connecticut facility, shows that financing costs can add substantially to the capital requirements. In Bridgeport, Connecticut, special reserve funds and capitalized finance charges added 47 % to the capital cost. If these same costs were added to the Monroe County Project at the same relative percentage, the Monroe County Project would have a total capital COG of $78 million (1.47 x $53 million). Thus it can be seen that the total capital cost of a resource recovery project could be as much as two to three times the cost of constructing the RDF processing facility itself.
Table 3.
Cost of Monroe County, N.Y. resource recovery facility
Project cost items Facility construction Other capital: studies engineering/management start-up transportation equipment utility conversion cost construction & other contingencies
Table 4.
($ millions) $28.4 0.4 4.4 4.1 2.1 8.0 4.8
% 54 % 1 8 8 5 15 9
Subtotal
524.4
46 %
Total project cost
$52.8
100 %
Cost of Bridgeport, Corm. resource recovery facility
Project cost items
(S millions) $36.0
Total facility Financing and project development: capitalized interest working capital for debt service special capital reserve fund repay short term debt system development costs bond issuance costs
4.7 0.7 5.0 4.4 0.9 1.3
vo 68 %
9 1 10 8 2 2
Subtotal
$17.0
32 %
Total project cost
$53.0
loo %
For the purposes of this paper, it was assumed that the net value of the RDF after amortization of capital for conversion of the RDF user’s facilities, transportation cost for RDF, and incidental operating costs of discounts associated with the use or purchase of the RDF is $I .OO/million Btus. It was further assumed that no special reserve funds are necessary for the bonds, and that the capital cost includes only those items in the first 2 columns of Table 5.
82
BELA M. FABIJSS, DAVID B. SPENCER and ROBERT L. SCHROEDER Table 5. Elements of capital cost Construction cost
Facility cost
System cost
Land Site development and mobilization Building/Architectural Structural steel Foundations Process equipment Plumbing HVAC Electrical Escalation Contractor OH and P
Preliminary and final design Construction management Laboratory equipment Office furniture Initial spares and supplies Start-up costs Testing programs Testing and analyses 0 and M manuals Transportation equipment Maintenance equipment Contingencies Interest during construction Financial and legal fees
System development Engineering feasibility studies Market surveys RFP development Transfer stations* Fuel user’s conversion* Working capital* Capitalized interest expense Legal expenses Contingencies Special reserve funds* Financing costs Access roads Utilities Owner’s administration cost*
*Not included as capital costs in this study.
COST ESTIMATE Capital cost A detailed cost estimate has been prepared in 1977 dollars for a baseline 250, 500 and 1 000 TPS resource recovery facility. The baseline 1 000 TPS RDF system provides for weighing in and out of all refuse vehicles arriving at the site; tipping from 10 bays into a B2-ft deep storage pit which can store up to 2 000 tons of raw waste; two fully redundant processing lines having a design capacity of 70 tons/hr each, and consisting of primary shredding followed by air classification, secondary shredding and ferrous metal recovery; and storage for up to 1 000 tons of the RDF product on site. Noise control, explosion suppression, fire and hazard prevention, and instrumentation and control are included as part of this baseline facility. Capital cost includes all ‘construction’ and ‘facility’ costs as defined in Table 5. No costs were included for working capital, utility power plant conversion or transfer stations. For baseline systems, typical capital costs are provided in Table 6. It can be seen that total capital cost includes much more than the cost of construction. Significant additional costs involved in the completion of the facility are as follows: 1. Preliminary and final design (1.5 070and 6 % of the construction cost, respectively). 2. Construction and system management: construction supervision, documentation, product marketing, operator training, acceptance testing. 3. Initial inventory: non-process equipment, furniture, scale houses, laboratory, control center, tool crib, shops, store rooms, and initial spares. 4. Start-up: 6 - 8 month period to bring the plant to full capacity. 5. Interest to support the cash flow required during implementation. 6. Cost of bond issue. For a typical facility, total capital cost may exceed construction cost by a factor of 2 or more when all costs are included. Operating cost Operating and maintenance costs for this same 1 000 TPS facility, operating two processing shifts daily, are about $5 million annually. A typical summary of labor costs, utilities (i.e. water, fuel, sewer and electricity), facility maintenance and supplies, leasing costs and general administrative expenses is given in Table 7.
RESOURCE RECOVERY SYSTEMS COSTS
33
Table 6. Typical capital cost of ‘baseline’ resource recovery plants ” ($1 OOO($ 1977) 250
500
Site development Buildings: office and non-process process tipping and storage Equipment: process compaction
% 1 171 362 733 873 3 779 229
$ 1 523 445 1 147 1 291 5 057 340
$ 2 095 831 2 250 3 834’ 10 393 733
Subtotal Contingency 10 %
S
147 711
% 9 803 913
$20 136 2003
Total plant and equipment
8. 7 858
$10 776
$22 139
Design (preliminary and final) Construction and system management Initial inventory start-up Interest during construction Bond issue cost (2 vo)
f
%
$ 1660 1 550 392 4 083 3 239 675
Subtotal
% 4 331
% 6 191
$11 599
Total investment
$12 189
$16 967
$33 738
1063 8.18
1 479
2 941 5.66
Capacity, TPS
Debt service $1 WWyr (a%, 20 yr) Cost/Ton (f/Ton) -_
7
589 550 224 1611 1 113 224
809 754 288 2401 1600 339
5.69
loo0
*Increase cost caused by completely enclosed facility design due to climatic conditions. Table 7.
Typical operating cost for 1 000 TPS Facility ($) (two processing shifts, 2 000 TPD)
Labor Utilities: fuel electricity water - sewage Maintenance Lease cost Residue removal cost Insurance Subtotal Contingency and management fee (15 Ore)
$1470000 4ooo 662 000 13ooa 857 otxl 2cOooo 1112oocl 111 ooo 4429OOB 664cKW
Total operating cost
$5093cOo
Produce revenues The biggest question in calculating the revenues from an RDF type facility is determining the
net revenue from sale of the RDF product. If this fuel is sold to a public utility, the price paid would most likely be based on the cost of fuel replaced less any additional costs incurred by the utility for using the supplementary RDF fuel. On the surface, this may be easy to understand for a coal-fired fossil station; just measure the number of car loads of coal which were not used because of the substitution of RDF to determine the value saved. Unfortunately, the situation is more complicated than this. For example, if the quantity of RDF generated by the resource recovery facility exceeds the amount which can be burned by the utility under normal conditions, then the utility may be required to operate its boilers at higher loads over longer periods of time to use up the remaining RDF. Operating in such a manner may conflict with the most economical dispatch of power from the utility power grid, especially when nuclear power is available within the grid. Under these conditions, the value of the fuel would be equal to the
BELA M. FABLJSS, DAVID B. SPENCER and ROBERT L. SCHROEDER
84
value of coal replaced less a penalty for incremental cost of supplementary coal when the fossil units are employed rather than the nuclear units. Under certain extreme conditions, it may be necessary to pay the utility to take the RDF. The matter becomes even more complicated when the utility must invest its own funds to pay for engineering and construction costs associated with modifications to its power plant to accept or store the RDF. A deduction must be made for amortization of capital. Additionally, if the bottom ash from the boiler must be specially treated when co-firing pulverized coal and RDF, the utility will expect the incremental cost for both capital and operations to be deducted from the price paid for the RDF. If the quantity of bottom ash is increased by co-firing, the cost of bottom ash disposal will be greater, which will also show up as a deduction from RDF revenue. Other complications in pricing result from incremental costs for operation of the RDF receiving facility or from additional boiler maintenance, which may be required when burning RDF. There is no experience to date to aid in quantifying when burning RDF. There is no experience to date to aid in quantifying these factors. Also, each boiler is different and will have unique problems associated with it. In this study, the boiler-peculiar problems were ignored and it was assumed that the net value of RDF after all deducts and transportation charges is $1 .OO/million Btu. It was also assumed that the resource recovery facility and the utility are next to each other (e.g. Ames, Iowa and Chicago, Illinois) and thus no transportation charges were deducted. The product revenues vary directly with the tons of refuse processed. A fixed sales value for each product has been used. Revenues are based on recovery of just over 7 % of the waste stream as ferrous metals having a gross price of $19.30/tori,, or $14.30/tori,, net of transportation. This translates to $l.O2/ton of solid waste processed. Since the net value of RDF was assumed to be $13.20/tori** for recovery of a high quality product, the revenue contribution RDF per ton of solid waste is $8.22 for 62 VoRDF yield. This is somewhat higher than the Ames, Iowa experience where the value has been estimated to be about $7.80/tan. When the RDF contribution is added to the ferrous contribution, the total revenue adds up to $9.24/tori of solid waste processed for the baseline system. Typical projected system economics for these 250, 508 and 1 000 TPS baseline systems are summarized in Table 8 for both one and two shift operations. Capital cost is amortized over 20 yr at 6 % interest using level payments over the life of the loan. The net disposal cost is shown graphically in Fig. 4.
Table 8.
Typical net community cost baseline system 250 TPS 1 Shift 2 Shifts
Capital cost Capital amortization Operating cost Product revenues
$ : %
11 461 000 999000 1170000 601000
Net Cost
%
1 568 000
Tons/yr Net disposal cost
% $/Ton
*Based on 6 600 Btu/lb and $1 .OO/MBtu.
65 OQO 24.12
500 TPS 1 Shift 2 Shifts
12 189 000 1063000 2009000 1201000
15 854 000 138200 1725000 12OlOtXJ
1 871 000
1906000
130 000 14.39
130 000 14.66
16 967 OOQ 1479000 2995000 2402OCKl 2072000 260000 7.97
1 WOTPS 1 Shift 2 Shifts 31 998 OOO 2790000 3 127 Ooo 2402300 3515000 260000 13.52
33 738 Ooo 2941oacj 5093M10 4805000 3229QOO 52OQtM 6.21
RESOURCE RECOVERY SYSTEMS COSTS 25
24.12 ;
250
503
Facility mpoc~ty, ml Fig. 4. Net disposhl
Shift
cost for 250, 500 and 1 000
m2
TPS
TPS
Shifts capacity
baseline
faci!ities
operated for one or two mfts.
:t is particularly interesting to note that the net disposal cost for a 500 TPS facility operated one shift/day is virtually the same as for a 250 TPS facility operated two shifts/day. This results from the fact that there are large economies of scale in the operation of the 500 TPS facility which are sufficient to fully offset the added amortization of capital for a double size facility. This is not true when the cost of operating a 1 000 TPS facility for one shift is compared to the cost of operating a 500 TPS facility for two shifts. In the !atter case, a community having approximately 1 000 TPD of solid waste would be well advised to build a 500 TPS plant and operate it for two shifts, rather than building a 1 000 ‘TPS facility operated for one shift. By utilizing the invested capital fully, the net disposal cost would be $7.97/tori rather than $13.52/tan. On the other hand, a community which consistently generates 500 TPD of solid waste with some prospect of increased tonnage in the future would. be well advised to construct a 500 TPS facility and operate it for one shift/day rather than building a 250 TPS facility operated for two shifts. The added capacity would have very little effect on net disposal cost even though the capital cost should be much higher (i.e. $16 million v $12 million). The larger facility would also provide the flexibility to handle added waste which may be generated in the future simply by increasing the hours of operation. It is interesting to note that operation of the 1 000 TPS facility on the second shift is actually profitable. That is to say not only does the net disposal cost/ton drop substantially, from $13.52/tori to $6.21/tan, but the total annual net disposal cost drops from $3.52 million for a one shift operation to $3.23 million for the two shift operation. Thus, it costs less to operate the facility for two shifts/day than one shift/day. The reason for this is that the capital amortization is cut in half, the operating cost is slightly reduced and the revenues at the same time remain the same, if all these data are related to each ton of solid waste processed in the
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RESOURCE
RECOVERY
SYSTEMS
COSTS
Incremental optional modules
??
2 Shifts
Fig. 5. Capital
cost of optional
modules
at 1 Ooo TPS facility
capacity.
Incremenlal optlonul modules
I
n
Fig. 6. Net disposal
cost/ton
Sh,ft
lzzl
of waste processed
2 Shifts
for each module
addition
for 1 000 TPS facility.
facility. Although the Cost of%he 250 TPS/one shift operation seems high at %24.13/tan, if the capital cost was not arraortized but rather ‘written-off’ as is the capital cost of most public works projects, the net cost/ton would be only $8.75/tan. Qwtionad processing modules One cause for the large variation
in RDF resource recovery facility capital costs is ?he
88
BELA M. FABIJSS, DAVID B. SPENCER and ROBERT L. SCHROEDER
addition of optional processing modules for aluminum recovery, glass recovery or cleaning of the ferrous or RDF products to meet special customer requirements. At least in theory, these cost options are only added when the annual amortization cost and operating cost are more than offset by additional revenue income. Thus the increase in capital cost results in a net decrease in total annualized costs. As the number of optional modules is increased, capital costs increase as shown in Fig. 5, while disposal costs should decrease. Table 9 shows the net disposal cost calculations for each optional module for either one shift or two shift operation. Net disposal cost is shown graphically in Fig. 6. It is apparent from Fig. 6 that the net disposal cost decreases for a 1 WQ TPS, two shift operation with the system selected from the maximum of %6.59/tori to $5.31/tan. Each additional module, except fuel cleaning, pays its own way. Fig. 6 also shows for the same size facility, 1 000 TPS, these optional modules do not pay their own way when the facility is operated one shift/day. It has been assumed in this analysis that optional modules were added on an incremental That is, the cost of site development, tipping, storage, primary shredding, air classification, etc., were recovered 100% by the baseline process and only the incremental cost resulting from the addition of equipment associated with the additional module was charged to that module. (For example, no attempt was made to spread the cost of primary shredding among various modules since shredding was necessary whether or not those modules existed.) The interesting conclusion to be reached from an examination of Fig. 6 is that for a 2 Ooo TPD operation (1 000 TPS, two shifts) each optional module, with the exception of Type 2, fuel cleaning, pays its own way; but for lhe same size facility when operated one shift/day, none of these modules is economical and the baseline system provides the lowest cost. The other point worth noting is that the difference in net disposal cost between the case where only the baseline system is utilized and the case where all the optional modules are utilized, for either one or two shifts, is less than 15 %. It should be clear from the discussion of economic variability that this degree of variation is well within the limits of precision of the cost estimates themselves. Minor fluctuations in market values, landfill charges or operating costs could cause the economics of either situation to change significantly. For example, the landfill savings which are included in the operations costs assume a flat landfill charge for residue of $4/tori plus a landfill transportation cost of $3/tan. If the cost for landfill is much higher than this, which is likely over the long term, then the economics of materials recovery becomes more favorable. Basically, it appears that the decision to add optionai modules for a 1 000 TPS facility is a policy decision. If a decision maker believes that the value of material or landfill will escalate in the future at a rate that more than offsets the incremental operating costs, he would be wise to invest in these optional modules today provided sufficient capital funds can be obtained. Alternatively, a community may be wise to leave provisions for such additions to a later date when some of the major facilities, such as Monroe County or Bridgeport, successfully demonstrate the technical and economic viability of these material recovery processes. The capital costs at that time would be higher due to escalation, but the risk would be reduced. Those communities considering materials recovery for facilities at capacities less than 1 QOO TPD should recognize that they may not be fully self-supporting in the near term. This does not imply that a community should look at resource recovery from a short-term economic standpoint. Many communities may decide to employ materials recovery due to the environmental benefits which result. In this case the decision is a policy decision rather than an economic one. basis.
RESOURCE RECOVERY SYSTEMS COSTS
SENSITIVITY
a9
ANALYSIS
There are many basic operational and design decisicns which can significantly affect capital, operating and maintenance cost. Examples include plant processing capacity, redundancy, number of operating shifts, refuse storage capacity, and product storage capacity. For a 2 000 TPD facility, an added day’s storage of refuse can add $1.2 million to the capital cost. Building on a landfill requiring pilings and significant excavation of existing fill can add $1.4 million to the capital cost which otherwise may be sufficient to purchase a much more ‘avorable site for both construction and waste delivery.
CONCLUSIONS RDF-type resource recovery technology is in the dernonstration phase. The cost for %hese projects is subject to wide variations which depend on the quantity of waste to be processed, financing considerations, local product markets, and competitive conditions. Cost information developed in this report gives a good first approximation of the costs for an RDF resource recovery facility. Good correlation was obtained when costs developed under this study were compared to costs developed on a consistent basis from case studies. Because the net disposal cost is the difference between two large numbers (i.e. capital amortization plus operating costs less revenues), the net disposal cost is subject to wide fluctuations when minor changes in costs and revenues are experienced. For the decision maker, the absolute costs provided in this report are not as important as the relative costs. The difference in cost between one type of system and another shows the impact of specific management decisions on cost. ,-lcknow/edgemenfs - This work was sponsored by U.S. Environmenml Protection Agency, Washington, D.C. under Contract No. 68-01-4380. The authors gratefully acknowledge the assistance of Mr. Robert Holloway, Contracting Officer and Joseph O’Neil who developed the Operations and Maintenance data.