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HomeMy WebLinkAbout04.c. (Revised) Board Policy No. BP XX - EnergyItem 4ct Central Contra Costa Sanitary District (Revised) BOARD OF DIRECTORS POSITION PAPER Board Meeting Date: July 21, 2016 Subject: ADOPT NEW BOARD POLICY (BP) NO. OXX — ENERGY MANAGEMENT Submitted By: Initiating Dept./Div.: Jean -Marc Petit, Director of Engineering Engineering & Technical Services / & 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 Meeting Date: July 21, 2016 Subject: ADOPT NEW BOARD POLICY (BP) NO. OXX ENERGY Af 1fV EMENT 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. The District's collection system relies primarily on imported grid electricity and some diesel driven equipment: however, the District is currently completing a solar power purchase agreement prole ct that will offset approximately 80 percent of the Collection System Operations Building annual power demand. 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 Mrembers 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 manaecmcnt Ppolicy 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 green i^6,va cv^,s--(GHG) emissions. The proposed energy managnmvnt 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 mina .amcnt 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 -Man gcmcnt. Attached Supportinv Document: 1 1. Final proposed BP No. OXX — Energy "dam Page 2 of 2 Number: BP OXX Authority: Board of Directors Effective: July 21, 2016 Revised: Reviewed: Initiating Dept./Div.: Engineering Department PURPOSE & Technical Services BOARD POLICY D1&TRICT ENERGY MANAGEMENTENERGY Central Contra Costa Sanitary District www.centralsan.org To promote enerav efficiency and proactive enerav manacement practices within the District's wastewater treatment plant campus. collection system facilities and pump stations, and other District buildings. TThe District desires to strive towards net zero energy at its wastewater treatment plant campus in Martinez by . Tho L'Wtri0 a1se-eras nC el rocs the CclLvtian F'je`om Cparationo b nat Cro0t, and othor fas►fitic' lvc r ^r,riicr arca ••:;et cc ramnctc ming o tiano. Tho pwraccr 0 this 1Pcliby io to promotinge 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. The District's energy management approach will ,f-vncilcr pursue cost-effective projects for its wastewater treatment plant campus and collection system facilities that e<xhia:'cachieve the following: a. Increase the use of renewable energy, such as solar and/or wind power, to preserve limited natural resources.: b. Identify and implement energy efficiency improvement projects to reduce costs and overall enerav usage. IncertirNr !hc vic` 0 cnc\rgant and prooaocruo in DistriGt capital improvomcnt projvotc whenc cr focoibla, c_ Pursue opportunities that recover renewable energy in wastewater, wastewater solids, and biogas. d_ Capture and convert waste heat from treatment processes to a beneficial energy source. [Original Retained by the Secretary of the District] Number: BP OXX DISTRICT ENERGY MANAGEMENT POLICY Page 2 of 3 e_ Evaluate opportunities to import high strength wastes to increase on-site renewable energy generation. f_ Explore innovative energy optimization opportunities, energy recovery processes, and other innovative energy technologies. a. Establish public-private partnerships to increase renewable enerav aeneration and stabilize Iona -term enerav costs (e.a. PPAs). h. Reduce greenhouse gas emissions, i. Improve the District's operational reliability and stabilize ooeratina costs. II. Cost-effective proiects are defined as proiects that meet the following minimum requirements: a. Projects reauirina capital investment must have a simple payback period of not more than 15 years. b. Proiects that do not reauire capital investment (e.a. power purchase agreements (PPAs), enemy service agreements, and enemy savings performance contracts) must offer a net present value of savings when compared to the cost of usina the District's existina enerav sources AND positive cash flow within 3 years. VIII. 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." IV. Develop a cost-effective energy program for the District's wastewater treatment plant that strives towards Net Zero Energy. II. Coct offuotr o projsota so dof:nad ca prof:rata th1 rrx tho following minimum rvs,►iKnontc: a—Pr^jala oquinng mOvl inmotront matt hsvo s oimpls psybsok poriod of net more than 15 yoc o. b. Project; thV. do not r: quire 3Spitsl inve tmont (o.g. power purohaoe agroemento (Pilo), energy oorvioo cgroomonto, s.nd anxgy xwingo perfarmanva oontraoto) muot offer a not pronont value of acvingo when oamperod to tho not of uoing the Dictrin'c oxicting onorgy oear000 AND pacitiw osch flaw-withir. 2 ycars. Number: BP OXX DISTRICT ENERGY MANAGEMENT POLICY Page 3 of 3 Tho Diatriat'o anugy managomont approcoh will oonoir. ar orot 3ffootivo projoot3 the ohiovo tho following: a. Incroac3 tho u33 of rsno;voble onorsy, :mph no ccicr and/or wind powor. C.a. Id3ntify and i; moat onorgy offioionoy irprovomont projootra. a.a. In^rn-pors�o these of onorgy e#fioiant oquiFmont and pro✓aoroo in Piotriot xpitsl imp,ovamcnt projoot3 whaio.orf3xibio. d.s.___ Fkira%a3 opportranitioo that r000►or ronowthlo ona-gy in waotowator, wastev or alido, and o.a. Capturo and 3onvort ►veto hoot from troatmont pr0003000 to o. baiofiok onogy oouroo. f.a. E►�.I� o oppa aniti;ra to import h gh otrongth ►vaotoo to inarosao 1. -site rer�e4rc�lo cno;sygarioraton g.n. E ploro innovativo onorgy ciptirnizci: n opporuanitioo, onorgy r000vofy pi co�.rac, and othrar inno%\ativo onorgy toohnologios h.s. Bradaoo greenho ioo goo omiooiono. PhV. Actively manage anthropogenic greenhouse gas emissions at the District's wastewater treatment plant campus below the California Air Resources Board (CARB) Cap and Trade Threshold (if it is the most cost-effective manner). INAVI. Encourage collaboration with other agencies, utilities, and organizations to explore and develop energy projects. VI. ✓ono dar u✓a of attcocnati• o mothodo o implononting onorgy projcroto aaoh a3 th-'rd party finanoing (o.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. V1 VIII. Increase public awareness of the importance of sustainable enerav practices and the water-enerav nexus. Central Contra Costa Sanitary District BOARD OF DIRECTORS POSITION PAPER Board Meeting Date: July 21, 2016 Subject: ADOPT NEW BOARD POLICY (BP) NO. OXX — ENERGY Submitted By: Initiating Dept./Div.: Jean -Marc Petit, Director of Engineering Engineering & Technical Services / & 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 Meeting Date: July 21, 2016 Subject: ADOPT NEW BOARD POLICY (BP) NO. OXX ENERGY 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. The District's collection system relies primarily on imported grid electricity and some diesel driven equipment; however, the District is currently completing a solar power purchase agreement project that will offset approximately 80 percent of the Collection System Operations Building annual power demand. 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 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 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 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. Attached Suonortina Document: 1. Final proposed BP No. OXX - Energy Page 2 of 2 Number: BP OXX Authority: Board of Directors Effective: July 21, 2016 Revised: Reviewed: Initiating Dept./Div.: Engineering & Technical Services Department BOARD POLICY ENERGY PURPOSE Central Contra Costa Sanitary District www.centralsan.org To promote energy efficiency and proactive energy management practices within the District's wastewater treatment plant campus, collection system facilities and pump stations, and other District buildings. The District desires to strive towards net zero energy at its wastewater treatment plant campus in Martinez by promoting 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. The District's energy management approach will pursue cost-effective projects for its wastewater treatment plant campus and collection system facilities that achieve the following: a. Increase the use of renewable energy, such as solar and/or wind power, to preserve limited natural resources. b. Identify and implement energy efficiency improvement projects to reduce costs and overall energy usage. c. Pursue opportunities that recover renewable energy in wastewater, wastewater solids, and biogas. d. Capture and convert waste heat from treatment processes to a beneficial energy source. e. Evaluate opportunities to import high strength wastes to increase on-site renewable energy generation. f. Explore innovative energy optimization opportunities, energy recovery processes, and other innovative energy technologies. [Original Retained by the Secretary of the District] Number: BP OXX DISTRICT ENERGY MANAGEMENT POLICY Page 2 of 2 g. Establish public-private partnerships to increase renewable energy generation and stabilize long-term energy costs (e.g. PPAs). h. Reduce greenhouse gas emissions. i. Improve the District's operational reliability and stabilize operating costs. II. 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. 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." IV. Develop a cost-effective energy program for the District's wastewater treatment plant that strives towards Net Zero Energy. V. Actively manage anthropogenic greenhouse gas emissions at the District's wastewater treatment plant campus below the California Air Resources Board (CARB) Cap and Trade Threshold (if it is the most cost-effective manner). VI. Encourage collaboration with other agencies, utilities, and organizations to explore and develop energy projects. VII. Use federal, state, regional, investor-owned utility (PG&E), and other public funding opportunities (e.g. grants, loans, and rebates) whenever feasible. VIII. Increase public awareness of the importance of sustainable energy practices and the water -energy nexus.