Enerkem: Alberta’s municipal waste to fuels juggernaut, in pictures

October 22, 2014 |

Enerkem-1How does a technology take municipal solid waste and turn it into liquid fuels and chemicals?

What’s the “death of landfill” all about in terms of creating value streams from waste streams?

We take you through the world’s first commercial-scale waste-to-fuels project, in Edmonton, Alberta.

In the sector to the northeast of Edmonton, Canada’s 2nd fastest-growing city (after Calgary), you’ll see epic amounts of road construction, home construction, and economic development of which much is devoted to energy, chemicals and the other industrial aspects of the tar sands oil & gas boom. The hockey team isn’t known as the Oilers for nothing.

One thing you will not notice is an expanding landfill region — which is unusual, because mountains of garbage are as typical a sign of a civilization growing in size and complexity as one can find. The height of the landfill often rivals the height of the downtown skyscrapers as a reliable benchmark of economic performance.

But in Edmonton, the city is moving from 60% waste recovery for recycling into other materials — already a strikingly high number — to 90%, arguably the world-leading number, and that’s where bioenergy comes in to the story, and Enerkem.

You see, once the traditional objects of community recycling are aggregated — glass, metals and plastics — and after wet food waste has been recovered for a composting operation — there’s a tremendous amount of biogenic material which, to date, has only been suitable for the landfill, or for combustion to make power.

And not every society has an appetite for the side effects of combusting mixed waste — first of all, the cost, but also the sorting, the scrubbing of the gas stream to remove toxins, the release of greenhouse gases. All against the fairly low economic value for electric power.

The Enerkem story

Starting nearly ten years ago now, Enerkem developed a technology to aggregate, sort and convert municipal solid waste — through a gasification technology — to methanol. From methanol, what has become a liquid chemical stream can then be converted (sometimes through standard chemical process, sometimes through new processes developed by the company) into a range of long-chain chemicals — ethanol, acrylic acid, and a whole lot more.

From labs in Quebec, the company moved to a pilot facility in Sherbrooke several years ago, built a full 1/10 scale demonstration in Westbury, Quebec earlier in this decade and, after attracting a name-brand roster of investors (including Waste Management and Valero) and winning Edmonton’s RFP, officially opened its first commercial-scale 10 million gallon plant in Edmonton this summer.

Commissioning of the units is now underway and the company expects to commence regular methanol production before the end of the year.

2015 – the watershed year?

2015 is going to be an interesting watershed year for the company, Right now, the order book is full – with a commitment to complete a commercial-scale facility in Varennes, Quebec, an option to double the capacity in Edmonton which city and company are now mutually exploring, and a DOE-sponsored commercial-scale project in Pontotoc, Mississippi that was conceived out of funds from the Recovery Act.

But now that the technology is demonstrated at Westbury and now built at full commercial-scale in Edmonton, Enerkem must be entertaining three sets of visitors a week, on average, in Edmonton between all the municipalities and project developers interested in the technology.

The economic and social rationale

From the municipality point of view, it costs roughly $70 per ton, in fully loaded costs, to open up a new landfill. Add in a combustion technology to generate some power and slow the rate at which the site is filled up to capacity — that cost rises to around $90 per ton of waste.

And, consider how difficult it is, in a community, to find space for a landfill. Talk about “Not in My Backyard” — it might be the single-least popular kind of construction a municipality might have to undertake, in terms of getting anyone in the community to embrace having it near them.

By contrast, the Enerkem deal with Edmonton calls for a 25-year, $45 per ton deal that ultimately converts 30% of the city’s waste stream to liquid fuels and chemicals. Down the line, that percentage might rise as Enerkem develops new uses (including road bed material) for some or all of the remaining 10% residual, which typically includes non-organic material such as broken ceramic.

From the point of view of the project developer, the company can make $1.50 per gallon ethanol at good margins (though it has preferred to publicly discuss the costs in terms of a “$1.50-$1.70 range per gallon)— and equivalent margins on methanol, for markets where that chemical is in short supply. Even more valuable molecules? Well, those will be taken on a case-by-case basis as the company develops the chemical processes and according to the commodity prices for those molecules.

With larger scale comes lower cost — the company believes that the optimal configuration for a municipality could include up to four modules — or 38 million gallons — with a cost per gallon as low as $1.05 per gallon before amortization and depreciation.

Worried about the future of the US Renewable Fuel Standard, or mandate targets in the EU or elsewhere? Not really, Enerkem CEO Vincent Chornet told the Digest. “In many markets, our customers will make methanol, but even in North America where ethanol is an important market, we can compete effectively against corn ethanol.”

Where next for Enerkem?

Beyond the existing projects mentioned in Edmonton and Quebec, for example — the company is not saying. It depends to a great extent on, first, whether municipalities wish to develop projects for themselves, or whether they will have project developers come in, relieve the town or city of its landfill problem, but the market the resulting molecules for themselves.

Cities that have expressed strong interest in finding solutions sooner rather than later to landfilling problems include Philadelphia, Toronto and Los Angeles. Developing waste projects in California can be complex — but there’s the added attraction of creating molecules that fit well with the California Low Carbon Fuel Standard.

Then, there’s China. “China needs everything,” says Chornet. “They are growing economically and need fuels and chemicals. They are turning away from landfill construction where they can. They have air quality problems that they would like to address and renewable fuels and chemicals fit there, as well. And they would like to develop alternative energy and fuel sources that do not compete with food or other land uses.”

Many of those same concerns apply to the EU as well — perhaps right now, less on the economic growth side, but certainly in terms of air quality improvement, climate shift mitigation, landfill avoidance, and developing alternative fuels that do not compete for land. Particularly, we see these concerns in Poland, for example.

So, it’s easy to see reasons why Enerkem could experience a huge growth rate in terms of raw project flow over the next few years. 100 projects — that’s certainly not out of the question as the technology proves out and continues to de-risk. “We’re already starting to see debt opportunities for the technology that start to look like traditional project finance,” Chornet told the Digest.

Of course, we’ve seen the sectors that have boomed and then gone quiet — at one time, it seemed like everyone in the world was building a first-generation ethanol plant, and then growth came to a sudden halt.

“We’re certainly mindful of that story and are determined to grow at the right rate for the company and our customers,” Chornet observed, noting to the Digest the timelines involved in developing commissioning teams, and building up the supply chain for this modular technology to support expansion.

The Edmonton project, for example, consists of 42 different modules built by suppliers to Enerkem’s spec, and snapped together on site, reducing long-term construction timelines to as little as 12 months, but making supplier capacity constraints a factor in how fast the company can grow.

“Right now, we can certainly handle three projects in a year,” said Chornet, “but to grow faster we will have to work closely with suppliers so that they can expand their production capacity to meet demand.”

The overall Edmonton project, by the numbers

• Footprint of the Waste-to-Biofuels and Chemicals Facility: 2.8 hectares (7 acres).
• Feedstock for conversion into biofuels is prepared from residuals from the City of Edmonton’s composting, recycling and processing facilities – waste that would otherwise be landfilled. Annual amount of this refuse derived fuel (RDF) is 100,000 tonnes.

• The initiative is composed of three facilities located at the Edmonton Waste Management Centre:

1. Waste-to-Biofuels and Chemicals Facility
(Inaugurated on June 4th, 2014) – Owned and operated by Enerkem Alberta Biofuels, will produce 38 million litres of clean fuels and biochemicals annually when operating at full capacity. Capital Cost: approx. $100 million (construction cost)

2. Advanced Energy Research Facility
(Opened in 2011) – Owned and operated by the City of Edmonton, this facility is attracting world-class energy research. The facility contributes to the advancement of a new line of advanced chemicals and hydrocarbon fuels suitable for today’s carbon reality. Capital Cost: $11 million

3. Integrated Processing and Transfer Facility
(Opened in 2010) – Owned and operated by the City of Edmonton, this facility sorts organic waste for composting and prepares RDF as a feedstock for the Waste-to-Biofuels and Chemicals Facility. Capital Cost: $40 million (RDF feedstock preparation)

[Note: Alberta Innovates – Energy and Environment Solutions (AI-EES) contributed $29 million to the overall Waste-to-Biofuels initiative. AI-EES staff served on the steering committee that directed and guided the execution of this project, and provided technical input and advice.]

The project in pictures

The process in overview

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The municipal solid waste at intake

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The first level of sortation, aimed at picking out major items (e.g. sofas)

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VecoPlan’s system is in place to shred the biomass into RDF

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RDF samples

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The RDF process 

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Waste research units

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The Advanced Energy Research facility

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The gasifier unit

 

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The syngas-to-methanol conversion module

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The complete waste-to-fuels plant

 

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