AP&T Generation Project

Investigation into Municipal Solid Waste

Gasification for Power Generation
Draft Report to the Public Utilities Board

6/17/2004 DRAFT WORKING DOCUMENT 1

Process of this Study

„ May 2002 AES presented a report to the PUB

‰ Objectives of a power project
‰ Gasification of MSW identified as an approach
that met all objectives
‰ Major Recommendation: conduct an RFQ for
MSW Gasification
„ This report presents the results of the RFQ

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Objectives of a Generation Project
„ Provide Local Reliability
„ Maintain an Economic Resource Portfolio
„ Ensure Stable Electric Cost and Power
Supply
„ Facilitate Economic Development in the City
of Alameda
„ Maintain Power Content Label in the Supply
Portfolio
„ Meet Future Need in a Timely Manner
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Key Information Sought Through RFQ

„ Technical Feasibility?
„ Economic at Scale useful to Alameda P&T?
„ Business Models for a Project?
„ Interest among Vendors?
„ Is MSW gasification and power production
competitive with other alternatives?

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The RFQ Team
„ Advanced Energy Strategies, Inc.
‰ Overall project management
‰ Economic analysis
‰ Final Report
„ URS Corporation
‰ Engineering assessment
‰ Technical Report
„ Alameda P&T Staff
‰ Project guidance
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What is MSW Gasification?
„ Chemical conversion of MSW into synthetic gas in a controlled
process
„ Four technologies:
‰ Pyrolysis: No oxygen,
Temperatures 750 - 1650° F
‰ Gasification: Limited oxygen (< stoiciometric),

Temperatures 1400 - 2500°

‰ Plasma Gasification: Limited oxygen,
Temperatures of thousands of ° F
‰ Bio-gasification: Anaerobic digestion

Less than 200° F

„ Bio-Gasification is not efficient enough to generate the amounts

sought in the RFQ, so it was not evaluated.

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Gasification is Not Incineration

„ Incineration (burning):
‰ “Oxidizing” Environment – oxygen rich
• Combines simple compounds into more complex compounds
‰ Creates complex oxides, including dioxins and furans
‰ Rejected by Alameda P&T in the 1980s

„ Gasification:
‰ Reducing Environment – very little or no oxygen used
‰ Breaks complex compounds down into simpler compounds
‰ Destroys toxics including dioxins and furans

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Gasification Process: 3 Stages

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Approach of the RFQ
„ Issued
‰ Round 1 - April 2003
‰ Round 2 - June 2003

„ Responses & Evaluation

‰ 13 vendors responded with 15 proposals
‰ 13 proposals were worthy of technical evaluation
„ In-person vendor interviews - November 2003
‰ 6 leading proposals were evaluated more
thoroughly through vendor interviews
‰ Short list includes 4 vendors

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Three Areas of Findings from the RFQ

„ Technology
‰ MSW Gasification technology is viable
• Will produce electricity reliably
• Can be permitted in California
‰ MSW Gasification technology is commercialized
(just barely)
• Technology will improve as it is deployed
• Mitigation of construction and operating risks will need to
be addressed

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Three Areas of Findings from the RFQ
„ Economics
‰ Capital costs higher than most generation
technologies
• Includes the cost of fuel preparation
• Project receives revenue for accepting the fuel
‰ Highly dependent on alternative costs
• Gas fired generation
• Landfilling MSW
‰ Current alternative costs make MSW gasification
economic
• Alternative costs have been rising
• Confirmation requires a defined project
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Three Areas of Findings from the RFQ
„ Institutional
‰ Law & Regulation are lagging technology development
‰ California legislation began addressing this in 2002
• Gasification recognized as different from incineration
ƒ Definition of gasification does not fit the technology
• Significant issue for thermal conversion technologies
• May not be a large problem for bio conversion
ƒ Did not define a role for gasification in MSW processing
• Gasification is a renewable technology
• Technology and life-cycle reports mandated
‰ Additional legislation will be needed
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 Development Path Alternatives
Power Combined Thermal Bio- Monitor
Purchases Cycle Conversion Conversion Developments
Technology
Viability Well Well Confirmed Needs -
Established Established Confirmation
Maturity Very Mature Very Mature Not Mature Not Mature -
Risk Mitigation Contract Terms Turnkey Needs Need May be -
Construction Attention Limited
Applicability to Not Meet Local Too Large; Good Fit Not Viable for up to 2
Alameda P&T Reliaability Gas Pressures Except for Determined years
Goal Low; Not meet Siting
Renewable Difficulties
Goal Within Alameda

Institutional
New MSW Regulations n/a n/a Required May Moderate
Accommodate Participation
Legislative Definiation n/a n/a Modification Probably Moderate
Required Adequate Participation
Local MSW Plan n/a n/a Modification Modification Moderate
Required Required Participation
Project Requirements
MSW Supply n/a n/a Untested Untested Defer
Site for Project n/a Some Difficulty Difficult Difficult Defer

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Gasification of MSW is a Good Fit for
Alameda P&T

„ Meets all Six Objectives

‰ Local
‰ Renewable

„ Timing fits Alameda P&T’s needs

„ Scale is appropriate

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Recommendations

„ Assess the Status of Bio-Gasification

„ Participate in Developing MSW Conversion

Laws & Regulations

„ Promote Development of a Reduced Scope

MSW Gasification Project

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