Conditions for an economical production and use of alternative fuels

Abstract

Basically, the entire pre- and co-processing needs to be worked out carefully before alternative fuels can be used. It begins with the technical assessment of the pyroprocess in the cement plant, as well as the assessment of the waste sources and its composition from which the alternative fuel shall be obtained and the number of impurities to be disposed of in a safe manner.

Part of the preparatory work is also the pe-engineering, the forecast of qualities and its assurance under the operational conditions. It is strongly discouraged to be persuaded to buy a system without these preliminary works. The individual requirements for each pyroprocess of cement production and the thermal potential in the waste composition determine the technical and financial expenditure for the conditioning plant and thus the profitability of such a project.

The economic viability of such a project is largely determined by the enforcement of legal requirements and a sound disposal fee on a proper calculation basis. It has to be noted that the contract periods are not determined by the purchaser of the alternative fuels (i.e. the cement plant), but by the reliable access to the waste, including its disposal fees. A cement plant is not interested in being supplied with poor AF qualities over long contract periods, but it is much more interested in a quality-oriented bonus-/malus system on which regular settlements can be made. The terms of these purchase agreements must be negotiated individually.

It is shown how such terms depend on the level of the disposal fee and at what point the purchase of fuels will switch to a sufficient gate fee to the cement work. Finally, it is shown how a contractual basis for supply and billing can be created.

Keywords

#economical basis #cement #production #kiln #preprocessing #waste #customized #HCF #RDF #SRF #coprocessing #precombustion #calciner #mainburner #qualityassurance #CO2 #settlement #disposalfee #gatefee

1.?????Minimum requirements

Using the right terms and definitions and other issues are one part of the entire cement manufactoring process that needs to be worked out carefully before alternative fuels can be used in a sustainable manner.

It begins with the basic technical determination of the pyroprocess in the cement plant, as well as the determination of the waste composition from which the alternative fuel is obtained and the number of impurities to be disposed of in a safe manner. The other part of the preparatory work is also the knowledge of the mechanics and its physics behind the conditioning plant, the quality assurance up to the right feeding or operational issues. It is strongly discouraged to be persuaded to buy a system without these sound preliminary works.

The individual requirements for the pyroprocess of cement production and the thermal potential in the waste composition determine the expenditure for the conditioning plant and thus the profitability of such a project. Profitability is determined by several factors, which will be discussed in more detail below.

2.?????Economical frame

The decarbonization of limestone to produce cement clinker and the CO2-allowances are the two cost drivers and the main reasons for using alternative fuels and raw materials. Depending on the technology the clinker burning process varies from wet process to dry process with its’ specific energy demand.

The largest benefit of AF is by saving primary energy costs, which are accounting around 26% of the manufacturing costs. In addition to modernizing the plant equipment by using highly efficient technologies such as cooler, the use of CO2-neutral fuels offers a quick option to save costs, as well. Consequently dry and preprocessed wood, paper, natural rubber, textiles etc. are most of interest with regard to its neutrality, but its generated fuels must match mandatorily the energy demand of the thermal process at its feed point.

With regard to financing the entire waste management in many countries the authorities levy the disposal fee by a certain percentage of consumption of e.g. water, gas or estate taxes and transfer the responsibility inclusive the budget to private companies. Although this financial budget is partly insufficient to cover all costs, the risk of corruption vulnerability is high due to the lack of legal enforcement and strict control.

E.g. in Europe, the disposal service is awarded by tender to obligatory state certified companies, which are politically controlled and on the basis of the legal regulations. The waste disposal fee shall follow the polluter-pays-principle, which has at least two main functions: first, to encourage people to reduce their amount of waste they produce by saving their own money, and second, to cover all the costs of a reliable and legally compliant waste disposal.

In the case waste cannot be avoided all subjects of collection, transport, stuff management, sorting, conditioning, recycling until quality monitoring, thermal use, waste incineration or sanitary landfilling are subsumed in this disposal fee.

In order to obtain reliable figures, the current situation is reviewed in a frequent manner as part of a statewide waste management plan. This includes determining of the number of inhabitants, the amount of waste per capita and the type and composition of the waste.

So, the waste producer is the responsible owner and has to cover all the costs. The fees are directly linked to each individual collection and bin, which means you pay depending on the legal requirements and annual needs.

In the following, different scenarios are used to show which economic opportunities and possibilities exist to lead a project to success. The general conditions shall be calculated as € per ton and assumed as follows:

On the side of the waste management industry:

• a mechanical-biological treatment plant (MBT) is designed for an annual capacity of 180,000 t of municipal solid waste (MSW),
• composting is not taken into account for the first,
• the depreciation period for the plant is 20 years for the building, 7 years for fixed installations and 3 years for movable equipment.

On the side of the exploiting cement plant are exemplarily taken into account:

• Savings of primary energy,
• Savings of CO2-certificates related to the non-fossil portion of biomass,
• Thermal loss due to water input,
• AF-gate fee or purchase price,
• New investments for AF handling,
• Additional operating expenditures e.g. due to laboratory, NOx-reduction, kiln lining, energy loss due to moisture, operation of bypass etc.

In the first case, which is the current starting situation in most cases, the polluter-pays-principle does not apply, i.e. the disposal fee remains at its known low level. A simple MBT technology is installed which will produce a low-grade fuel (RDF) with a high moisture content and a low level of calorific value, but a high content of biomass.

In order to establish a reliable waste management system, the cement plant is willing to subsidize the system by purchasing RDF, even though its quality is at the lowest tolerable level.

A quick review of the calculations shows that this alternative fuel project will fail in a simple MBT, even if the cement plant buys the low-grade fuel (RDF) to give some sort of start-up funding.

The damage caused by the introduction of moisture into the thermal process by the poorly treated RDF and the initial costs cannot be compensated by the savings in avoidance of fossil fuel and its reduction in GHG allowances. The financial loss is about 9 times higher on the cement plant side than on the conditioner side.

At this point, it must be clearly stated that the economic viability of such a project depends essentially on the enforcement of the legal framework and the certainty of the disposal fees, which must cover all the costs.

Under the existing contractual conditions and further subsidization by the cement plant, the MBT shall be upgraded to produce RDF which suits more to the process.

On one hand, upgrading the MBT will generate a better RDF quality with a higher biomass content and a lesser introduction of moisture, and consequently a higher thermal substitution rate at the cement plant. Its losses will be halved, but will still remain negative.

On the other hand, the costs in the MBT will rise up to six times than before reconstruction and will bring it to its knees.

If a state does not allow the import of foreign waste (the quality of the AFs often does not allow any other designation), it has to accept that the disposal fees will have to be increased - significantly!

In addition, in this theoretical example, the cement plant shall waive a gate fee and on subsidizing the costs of the MBT in order to bring the calculation into a balance for both sides.

Nevertheless, the resulting financial cushion will be too tight for both partners to cover even the smallest expenses such as additional repairs or such investments for a sufficient equipped laboratory or the operation of a sanitary landfill.

Finally, an MBT is a splitting plant, from which several streams are leaving to recycling, compost and customized alternative fuels. But, also non-recycables and impurities have to be disposed of in a safe manner on a sanitary landfill or even incinerator. These investments have to be covered by the polluter-pays-principle, as well.

In this last example, the polluter-pays-principle is valid, and the appropriate disposal fee will cover all the investment into a suitable technology to produce RDF with a suitable quality. The cement plant will extend its reception and storage facility to guaranty a continuous supply and will get a gate fee to compensate its higher investments such as SCR- or SNCR-technology to reduce NOx-emissions.

Finally, an additional WtE-plant to produce power may complete this system to ensure a public and private cooperation for an integrative, safe and reliable waste management.

3.?????How to draw up a supply contract

As already mentioned, the contract periods are not determined by the cement plant, but by the reliable access to the waste, including its disposal fees. A cement plant is not interested in being supplied with poor AF qualities over a long contract period, but rather in qualities and on demand.

Later, when the MBT is in operation and the cement plant is continuously supplied, these qualities must meet the agreed specification of the clinker production process and will also be the basis for its frequent billing. The terms of these purchase contracts are usually negotiated individually and monitored by regular inspections at the reception on the cement plant side. Incidentally, this billing model can be extended or shortened as desired according to the agreed bonus/malus system.

This also shows very clearly that it is always worthwhile to assess the composition and properties of the intended input waste in detail in advance and to design the processing plant accordingly, which has a huge impact on the investment, in order to produce customized RDF qualities for the calciner or SRF for the main burner.

Quality assurance according to defined standards will provide the required parameters for cross-checking. For this purpose, the statistical median and the 80th percentile have proven to be useful by means which both sides can bill in a certain rhythm.

The following shows when several parameters have been agreed upon, which are analyzed regularly during the delivery period. Finally, these are set in advance as the settlement basis and tolerance, so that a settlement is based on these results or their deviation.

In the following example, four typical parameters (calorific value, and the content of chlorine, moisture and biomass) are identified by this individual cement plant. This billing basis can be extended or shortened as desired for individual supply contracts.

Here Example 1 shows the consequences if the promised specification is not met. However, Example 2 also shows how much profit can be made if the system is designed and operated, properly.

And, this also shows very clearly that it is always worthwhile to assess the waste composition and its properties precisely beforehand and to design the processing plant to this, i.e. to invest in order to produce tailor-made qualities and to ensure their quality and continuous supply.

The entire system only works in a sustainable manner and for the benefit of the society if both sides are aware of the context and consequences.

More detailed contract templates can be found on https://wltp.eu/activities/ and in the appendix of the WLTP Directional Compass: Alternative Fuels Handbook for Project Managers.