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HomeMy WebLinkAbout04.c. Board Policy No. BP XX - Energy ManagementCentral Contra Costa Sanitary District BOARD OF DIRECTORS POSITION PAPER Board Meeting Date: August 4, 2016 Subject: 4.c. b5411 ADOPT NEW BOARD POLICY (BP) NO. OXX — ENERGY MANAGEMENT Submitted By: Jean -Marc Petit, Director of Engineering & Technical Services Initiating Dept./Div.: Engineering & Technical Services / Planning & Development Services REVIEWED AND RECOMMENDED FOR BOARD ACTION: Kent Alm Roger S. Bailey Counsel for the District General Manager ISSUE: Adoption of new Board Policies (BP) requires the review and approval of the Board of Directors. BACKGROUND: Energy is one of the highest operating costs for a water sector utility, and fossil fuels are the basis of most energy sources, including purchased electricity. There has been a recent surge in interest in the clean water sector to strive towards energy independence by minimizing energy demands, improving energy efficiency, maximizing recovery of the energy embedded in the wastewater solids, installing renewable energy generation systems (e.g. solar and wind), and minimizing or eliminating imported electricity and non-renewable fuels. The District's wastewater treatment plant currently meets the majority of its energy demand by generating power and heat from its natural gas cogeneration unit. The power from cogeneration is used to meet the majority of the District's electrical demands. Heat produced from the cogeneration unit, and waste heat from the multiple hearth furnaces, is sent to boilers that convert the heat to steam energy. This steam, in addition to steam produced from the District's auxiliary boilers, is primarily used to drive the aeration turbines, which provide air to the District's biological treatment process. This provides a significant reduction in the amount of imported energy which would otherwise be required to operate the aeration turbines. The remainder of the District's electrical demand is met with imported grid electricity from PG&E. The District's current energy approach at the treatment plant campus has been cost effective; however, it requires relying on imported grid power and imported natural gas. While the cost of using the natural gas cogeneration unit is less than imported grid power, the natural gas accounts for a significant portion of the District's anthropogenic greenhouse gas (GHG) emissions. The energy demand for the treatment plant will significantly increase as additional treatment processes (e.g. nutrient removal, membrane bioreactors, filtration, reverse osmosis, and ultraviolet disinfection) are implemented in the future to meet potential Page 1 of 2 POSITION PAPER Board tweeting Date: August 4, 2016 Subject: ADOPT NEW BOARD POLICY (BP) NO. OXX ENERGY MANAGEMENT new effluent discharge permit requirements and/or increase recycled water production. As part of the District's Comprehensive Wastewater Master Plan, staff is exploring opportunities to achieve net zero energy. On June 16, 2016, staff presented current and future projected energy profiles for the District's wastewater treatment plant to the Board of Directors. As part of the June 2016 Board workshop, staff also presented a suggested definition for net zero energy and multiple opportunities (e.g. co -digestion of high strength wastes, solar, and wind) for the District to explore to strive towards a potential net zero energy goal for the treatment plant campus. Board Members present at the workshop provided input to staff for an energy policy and requested that staff develop a draft energy policy. The District also owns and operates the Collection System Operations building in Walnut Creek, and other facilities located throughout the service area such as remote pumping stations. The purpose of this energy management policy is to promote cost- effective projects to minimize imported grid power and fossil fuels by implementing energy efficiency and renewable energy generation projects that will also reduce the District's anthropogenic (GHG) emissions. The proposed energy management policy is intended to provide the District with a direction for future consideration of energy efficiency, demand reduction, and renewable energy projects that is consistent with the District's Vision, Mission, and Values outlined in the District's Fiscal Year 2016-2018 Strategic Plan. ALTERNATIVES/CONSIDERATIONS: The Board of Directors may choose not to adopt an energy management policy. FINANCIAL IMPACTS: None by this action. COMMITTEE RECOMMENDATION: This matter was discussed by the Administration Committee on July 14, 2016. The Administration Committee recommended Board approval of the attached new BP No. XX — Energy. RECOMMENDED BOARD ACTION: Adopt new BP No. OXX — Energy Management. Attached Su000rtina Document: 1. Final proposed BP No. OXX — Energy Management Page 2 of 2 Number: BP OXX Authority: Board of Directors Effective: August 4, 2016 Revised: Reviewed: Initiating Dept./Div.: Engineering & Technical Services Department BOARD POLICY ATTACHMENT 1 Central Contra Costa Sanitary District www.centralsan.org DISTRICT ENERGY MANAGEMENT PURPOSE V77 The District desires to strive towards net zero energy at its wastewater treatment plant campus in Martinez. The District also owns and operates the Collection System Operations building in Walnut Creek, and other facilities located throughout the service area such as remote pumping stations. The purpose of this Policy is to promote cost- effective projects to minimize imported grid power and fossil fuels by implementing energy efficiency and renewable energy generation projects that will also reduce the District's anthropogenic greenhouse gas (GHG) emissions. POLICY I. Net Zero Energy for the District's wastewater treatment plant campus is defined as: "A wastewater treatment plant campus that uses or produces enough renewable energy to meet its own annual energy consumption requirements." II. Develop a cost-effective energy program for the District's wastewater treatment plant that strives towards Net Zero Energy. Cost-effective projects are defined as projects that meet the following minimum requirements: a. Projects requiring capital investment must have a simple payback period of not more than 15 years. b. Projects that do not require capital investment (e.g. power purchase agreements (PPAs)), energy service agreements, and energy savings performance contracts) must offer a net present value of savings when compared to the cost of using the District's existing energy sources AND positive cash flow within 3 years. III. The District's energy management approach will consider cost-effective projects that achieve the following: a. Increase the use of renewable energy, such as solar and/or wind power. [Original Retained by the Secretary of the District] Number: BP OXX DISTRICT ENERGY MANAGEMENT POLICY Page 2 of 2 b. Identify and implement energy efficiency improvement projects. c. Incorporate the use of energy efficient equipment and processes in District capital improvement projects whenever feasible. d. Pursue opportunities that recover renewable energy in wastewater, wastewater solids, and biogas. e. Capture and convert waste heat from treatment processes to a beneficial energy source. g. Evaluate opportunities to import high strength wastes to increase on-site renewable energy generation. Explore innovative energy optimization opportunities, energy recovery processes, and other innovative energy technologies. h. Reduce greenhouse gas emissions. IV. Actively manage anthropogenic greenhouse gas emissions below the California Air Resources Board (CARB) Cap and Trade Threshold (if it is the most cost- effective manner). V. Encourage collaboration with other agencies, utilities, and organizations to explore and develop energy projects. VI. Consider use of alternative methods of implementing energy projects such as third -party financing (e.g. PPAs). VII. Use federal, state, regional, investor-owned utility (PG&E), and other public funding opportunities (e.g. grants, loans, and rebates) whenever feasible.