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AAid in the management and European id in the management and European comparisoncomparison
of Municipal Solid of Municipal Solid WASWASte te TTreatment reatment methodsmethods
for a global and sustainable approachfor a global and sustainable approach
Fifth Framework Program
University of Stuttgart
AWAST
WORKPACKAGE 3
Economic Aspects
Leader : Cemagref de Rennes (F)
Contributor : University of Stuttgart (ISWA)(G)University of Stuttgart
TASKSTASKS
1 - State of the art and data acquisition
2 - Definition of production cost models
Development of a standard structure to calculate the production cost
Aggregation of component costs to obtain production cost
Determining the full cost of MSW service
3 - Calibration and validation of the models
COURSE OF THE RESEARCHCOURSE OF THE RESEARCH
1 - Choice of the estimation method for production cost
2 - General form of the production cost model of each process Choice of the main variables (source: offers from building and exploitation companies)
3 - Sources of data
4 - Application of the method of estimation cost
5 - Expression of main variables
6 - Adjustment of coefficients
7 - Production cost models for each process
8 - Full cost or providing cost service and application
9 - Deliverables
10 - Main economic results
11 - Interests for End-Users
12 - Dissemination and use intentions
Method of modelling production cost
Determination of principal variables of production costs : L, E, R, M
BibliographyCase Studies
Bibliographyinvestigation
Coefficients of secondary costs : α, β, γ
Writing general equation of the production cost model : Cp = Cc + Co = α.L + β.E + γ.R + I
Application to real cases
Typology
Model adjustment
Model of calculation production cost
Technical data
Determination of :- labour,-energy consumption, -reagent consumption,- maintenance
Economic data
Unit costs- electicity : e-employee wage : w-reagent :r
ESTIMATION METHOD OF CAPITAL COSTESTIMATION METHOD OF CAPITAL COST
- Method developed by R. Turton (1998) and K.D. Kimmerhaus (2002) on the evaluation of the economics (capital costs, operating costs) of chemical process (U.S.A.) and applied once in MSW by D.C. Wilson (1981)
CT = CFC + NPCC (non- plant capital costs: start-up, land, working capital)
CFC = DPC + IPC (direct plant costs, indirect plant costs)
fL or k : Lang factor
CFC = fL IEC with IEC: fixed-capital costs of the plant,
installed equipment cost
- k : fluctuates according to the process and the process type
- IEC : updateable with economic indexes
ESTIMATION METHOD OF OPERATING COSTESTIMATION METHOD OF OPERATING COST
- Method developed by R. Turton (1998) and K.D. Kimmerhaus (2002) on the evaluation of the economics (capital costs, operating costs) of chemical process (U.S.A.) and applied once in MSW by D.C. Wilson (1981)
C0 = Direct Costs + Indirect Costs = DC + IC
with DC = f(L, E, R, I) and IC = g(I, L)Fixed Costs
- Labour : L - Insurances - Taxes - Overhead
Variable Costs
- Energy : E - Other utilities - Reagent : R
Maintenance
- Equipment : IEC - Civil works : IGC
C0 = . L + . E + . R + . I
Each basic variable (L, E, R, I) is estimated by ratio in physical units combined with the standard prices units
ACQUISITION DATAACQUISITION DATA
BibliographySofres - Ademe (1998)World Bank (COSEPRE - 2001)
Proctor & Redfern Ltd (1996)ETSU (1999)Eco-Emballages (2002)WDO (2001)CRIQ (2000)Proctor & Redfern Ltd (1997)
Biocycle (2002)Eunomia R & C - Ecotec (2002)UK Composting association (2000)
Juniper Survey (2001)Draft European Commission (1997)D. A. Tillman & A. Rossi (1989)Heberg and all (1991)
BRGM Ademe (2001)ISWA - 1998 - Guidance for landfillingEunomia R & C (2002)ISWA - US EPA (1998)Ministry of Environment of New Zealand (2002)
Partners
University of Stuttgart
Lisbon
LisbonCovilhaSetubal
Berlin (AD)
LisbonVienna
Trondheim
-
Process
- Collection
- Sorting
- Composting
- Incineration
- Landfill
France
17 following up in France
12
6
13
operating data
APPLICATION TO THE COST ESTIMATION METHODAPPLICATION TO THE COST ESTIMATION METHOD
Collection Application of the cost model to a standard circuit of collection, with performances observed of collection of a given flow of waste
Sorting plant Typology according to design capacity, number of sorting lines, level of mechanization
Composting plant Typology according to the importance of the fermentation equipment
Incineration plant Distinction according to APCS (Air Pollution Control System) : dry, semi-wet and wet srubber
Landfill Distinction with: - impermeable / semi-impermeable
cover - energy biogas valorization
GENERAL FORMULATION OF CAPITAL COSTGENERAL FORMULATION OF CAPITAL COST
Collection : vehicle, bins : purchased cost
Sorting plant : CFC = k IECR Cn with k & IECR calculated for each type
Composting plant : CFC = k (k1 . Cn + k2) with k, k1 & k2 calculated for each type
Incineration plant : CFC = k1 . Cn + k2
Landfill : CFC calculation
General formula : General formula : CCFCFC = k . IEC = k . IEC
GENERAL FORMULATION OF OPERATING COSTGENERAL FORMULATION OF OPERATING COST
Collection : C0 = . L + . E + M
Sorting plant : C0 = ( . L + M)
Composting plant : C0 = . L + . E + M
Incineration plant : C0 = . L + . E + . R + M
Landfill : CFC calculation
General formula : General formula : CC00 = = . L + . L + . E + . E + . R + M . R + M
Parameters of the main explanatory variables
L : labour
E : energy
R : reagent
M : maintenance
Coefficients representing the secondary expenditure
EXPRESSION OF THE PARAMETERS OF THE CEXPRESSION OF THE PARAMETERS OF THE C00 MODEL MODEL
L Incineration:
Sorting:
Composting:
E
R
M
si
iiss wNwQ
n 001000
aatt wNwNQ
10000
tffelecelec QBeBeE
tii QcRR
FCGC CbIECbIECbIbM '21
nCbaL
- e, c, w : unit cost- N, B, R : standard consumption ratio for each process and type
- Belec : electricity consumption (kWh/t)
- Bf : fuel consumption (l/t)
with Ri: lime, bicarbonate of sodium, active char-coal, lignite coke, urea ammoniac (Kg/t)
EXPRESSION OF COEFFICIENTSEXPRESSION OF COEFFICIENTS
C0 = . L + . E + . R + M
Process
- Collection
- Sorting
- Composting
- Incineration
1,7572
1,1 - 1,4
1
1,43
1,264
-
1,05 - 1,30
1
-
-
-
1,05
Indirect Cost
0,0805 . Iv
= 1,1 to 1,5
. CFC = 0,01 . CFC
in
PRODUCTION COST DETERMINATIONPRODUCTION COST DETERMINATION
Gross production cost
Cp = CC + C0
= CFC / d + C0 with d : life time of the plant
Vehicle d = 7 years
Sorting plant d = 15 years
Composting plant d = 20 years
Incineration plant d = 20 - 30 years
Landfill d = 20 years
Net production cost Cpn = Cp - Sr with Sr : revenues by-products sales
Presentation of the Full Cost methodPresentation of the Full Cost method
An American bibliography : methodological proposal by the «Environmental Protection Agency» (EPA) :
A working method flexible and adaptable to personalize according to the needs to retrace as close as possible the service cost.
In first step, description phase of material ’s flow identification,In second step , identification and affectation of financial flows
Accounting of costs rather than expenditures
Accounting of monitoring costs and indirect costs . Accounting according to two approaches : per path, per activity
Distinction of three levels of cost observation : cost by activity or plant (niveau A), cost by stream (niveau B), cost for the local authority (niveau C)
Explicative scheme of the activity and path Explicative scheme of the activity and path distinctiondistinction
(a) The vertical approach per stream
Cost per type
of waste or treatment,
all activities
melted
Collection activity
Transport activity
Treatment activity
Valorization activity
Transfert-transit activity
Cost/activity all types of wastes
Collection activity
Cost/activity all types of wastes
Cost/activity all types of wastes
Cost/activity all types of wastes
Cost/activity all types of wastes
Transport activity
Transfert-transit activity
Treatment activity
Valorization activity
(b) The horizontal approach per activity
Distinction between the three levels of costs Distinction between the three levels of costs
Waste collection
Incineration plantQ1+Q2
Q1
Q2Other authorities
Local Local authorityauthority
(C)(C)
StreamStream
(B)(B)
ActivityActivity
(A)(A)
Bottom ash
Fly ash Landfill 1
Landfill 2
Illustration with the thermal stream
LIMITS OF RESULTS OBTAINEDLIMITS OF RESULTS OBTAINED
Difficulties to obtain detailed costs in European countries (specially when the private sector builds and exploits)
Diversity of composting processes and limit of validity of composting models up to 60.000 tpy
Costs, availables for the sorting plants, come from the U.S, especially types 3 and 4.
Knowledge of the costs is restricted on energy valorization of biogas in landfill
Production cost models give an estimated cost which can be different of each real case (result of tender offer)
The implementation of the methodology for the providing cost requires to have the whole financial data and a flow sheet of organisation of service
DELIVERABLESDELIVERABLES
D6 :D6 : Achievement the writing “Methodology Achievement the writing “Methodology of production cost models and the full cost of production cost models and the full cost
providing by Local Authority”providing by Local Authority”
D7 :D7 : Draft of “Economics models for each Draft of “Economics models for each process and the municipal solid waste process and the municipal solid waste
management”management”
RESULTS - INTERESTS - RESULTS - INTERESTS - DISSEMINATION - FUTUREDISSEMINATION - FUTURE
MAIN ECONOMIC RESULTSMAIN ECONOMIC RESULTS
Production cost models (Level plant)
• provide costs for each process
• take into account the main production factor in the form of technical ratios
• are adapted to the different design capacities
• updateable to economic conditions
• applicable to the different European countries
MAIN ECONOMIC RESULTSMAIN ECONOMIC RESULTS
Methodology of providing cost knowledge (Local level authority)
• An analytical step which is based on the various centres of costs
• Take into account the production costs (collection, treatment) and all the indirect costs linked to the management of waste
• Improve the knowledge of the total cost formation of services
INTERESTS FOR END-USERSINTERESTS FOR END-USERS
Production cost model• Help decision makers in order to point out a cost simulation
• Evaluate the economic impact of the installation or modification of a treatment unit
• Help to optimal dimensioning (Technical and economic) of an installation
Methodology of full cost• Follow the evolution in the time of the full cost of service
• Evaluate the financial consequences of a technical choice on the full cost
• Target the ways to make economies
• Foresee the base necessary to implement the unit-pricing system paid by the households
DISSEMINATION and USE INTENTIONS (1)DISSEMINATION and USE INTENTIONS (1)
DISSEMINATION
• Publications on cost model
• Application of Full Cost model on two activities (Study 2003 for French Minister of the Environment of PAYT)
• Applications on some local authorities: support, appraisal, consulting
DISSEMINATION and USE INTENTIONS (2)DISSEMINATION and USE INTENTIONS (2)
FORESEE COLLABORATIONS WITH OTHER ENTITIES
• BRGM: develop the AWAST applications on different situations of organisation and process
• French Environment Agency (Ademe): improve the knowledge of collection costs and composting of biowaste on various areas (urban, urban surroundings, rural)
• French Minister of the Environment for the application of the PAYT system : improve the taking into account of the constraint of balance in the budget
• The future European countries: to evaluate the costs for MSW management (Czech Republic, Poland)• Cemagref: - Improve the cost models, espacially for composting (type AD & TW), incineration, biogaz
- Constitute a data base on the costs of construction and exploitation for the new plants
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