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