Journal of Environmental

Management
Manuscript Draft

Manuscript Number: JEMA-D-19-06986

Title: Municipal wastewater sludge as a renewable, cost-effective

feedstock for transportation biofuels using hydrothermal liquefaction

Article Type: Research Article

Keywords: Discounted cash flow analysis; Energy recovery; Sewage sludge;

Biosolids treatment; HTL; AD

Abstract: US municipal wastewater contains approximately 160 TBtu/y of

influent chemical energy, but very little of this energy is recovered and
utilized nationwide. Hydrothermal liquefaction (HTL) is a thermochemical
process that converts biomass into biocrude intermediate that can be
upgraded to liquid fuels. HTL provides an opportunity to enhance energy
recovery at US wastewater treatment plants by transforming underutilized
municipal wastewater solids into a renewable, cost-effective feedstock
for transportation biofuels. In this study, we estimate total national
economically sustainable sludge feedstocks using a site-specific
discounted cash flow analysis to assess the net present value of 30-year
HTL and anaerobic digestion (AD) energy investments. This analysis is the
first to model HTL technology deployment across the real-world fleet of
US wastewater treatment plants. Analyses indicate publicly owned
treatment plants could economically supply more than 10 MT/y of dry
solids feedstock to produce nearly 1 Bgal/y of biocrude intermediate,
thereby increasing energy, environmental, and financial sustainability
while reducing disposal costs and operational and environmental risk.

Research Data Related to this Submission

--------------------------------------------------
Title: Supplemental Data for: Municipal wastewater sludge as a renewable,
cost-effective feedstock for transportation biofuels using hydrothermal
liquefaction
Repository: Mendeley Data
https://data.mendeley.com/datasets/sz2vdh6jss/draft?a=94cf66f5-89b2-4c4e-
933e-2ea7b487f2e0
Title page

Municipal wastewater sludge as a renewable, cost-effective feedstock for

transportation biofuels using hydrothermal liquefaction

Timothy E. Seiplea,, Richard L. Skaggsa, Lauren Fillmoreb, André M. Colemana

a
Pacific Northwest National Laboratory, P.O. Box 999, Richland, WA 99354, USA
b
Water Research Foundation (retired), 6666 West Quincy Avenue, Denver, CO 80235, USA


Corresponding Author: Timothy Seiple. Energy and Environment Directorate, Pacific Northwest
National Laboratory, 324 Wessling Circle, Catonsville, MD 21228, USA, Phone: 410.949.7514, E-mail:
timothy.seiple@pnnl.gov


Corresponding Author: Timothy Seiple. Energy and Environment Directorate, Pacific Northwest National
Laboratory, 324 Wessling Circle, Catonsville, MD 21228, USA, Phone: 410.949.7514, E-mail:
timothy.seiple@pnnl.gov
*Highlights (for review)
Click here to view linked References

 Discounted cash flow method used to assess economic feasibility of biofuel projects
 HTL is cost-effective at wastewater treatment plants with influent flows ≥5 Mgal/d
 WWTPs can economically supply >10 MT/y of feedstock to produce 1 Bgal/y of biocrude
 HTL offers better energy recovery, performance and financial sustainability than AD
 Economic HTL projects could eliminate USD 3.23 B/y in disposal liability
*Manuscript (full)
Click here to view linked References

1 Municipal wastewater sludge as a renewable, cost-effective feedstock for

2 transportation biofuels using hydrothermal liquefaction

3 Timothy E. Seiplea,, Richard L. Skaggsa, Lauren Fillmoreb, André M. Colemana

a
4 Pacific Northwest National Laboratory, P.O. Box 999, Richland, WA 99354, USA
b
5 Water Research Foundation (retired), 6666 West Quincy Avenue, Denver, CO 80235, USA

6 Disclaimer: The views and opinions of the authors expressed herein do not necessarily state or reflect

7 those of the United States Government or any agency thereof. Neither the United States Government nor

8 any agency thereof, nor any of their employees, makes any warranty, expressed or implied, or assumes any

9 legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus,

10 product, or process disclosed, or represents that its use would not infringe privately owned rights.

11 Abstract

12 US municipal wastewater contains approximately 160 TBtu/y of influent chemical energy, but very

13 little of this energy is recovered and utilized nationwide. Hydrothermal liquefaction (HTL) is a

14 thermochemical process that converts biomass into biocrude intermediate that can be upgraded to liquid

15 fuels. HTL provides an opportunity to enhance energy recovery at US wastewater treatment plants by

16 transforming underutilized municipal wastewater solids into a renewable, cost-effective feedstock for

17 transportation biofuels. In this study, we estimate total national economically sustainable sludge feedstocks

18 using a site-specific discounted cash flow analysis to assess the net present value of 30-year HTL and

19 anaerobic digestion (AD) energy investments. This analysis is the first to model HTL technology

20 deployment across the real-world fleet of US wastewater treatment plants. Analyses indicate publicly

21 owned treatment plants could economically supply more than 10 MT/y of dry solids feedstock to produce


Corresponding Author: Timothy Seiple. Energy and Environment Directorate, Pacific Northwest National
Laboratory, 324 Wessling Circle, Catonsville, MD 21228, USA, Phone: 410.949.7514, E-mail:
timothy.seiple@pnnl.gov
22 nearly 1 Bgal/y of biocrude intermediate, thereby increasing energy, environmental, and financial

23 sustainability while reducing disposal costs and operational and environmental risk.

24 Key Words

25 Discounted cash flow analysis; Energy recovery; Sewage sludge; Biosolids treatment; HTL; AD

26 Research Highlights

27 • Discounted cash flow method used to assess economic feasibility of biofuel projects

28 • HTL is cost-effective at wastewater treatment plants with influent flows ≥5 Mgal/d

29 • WWTPs can economically supply >10 MT/y of feedstock to produce 1 Bgal/y of biocrude

30 • HTL offers better energy recovery, performance and financial sustainability than AD

31 • Economic HTL projects could eliminate USD 3.23 B/y in disposal liability
32 1. Introduction

33 As part of an ongoing series of waste-to-energy projects sponsored by the United States Department of

34 Energy (DOE), Office of Energy Efficiency and Renewable Energy’s Bioenergy Technology Office

35 (BETO), we investigate opportunities to improve energy recovery at US wastewater treatment plants

36 (WWTPs) in order to transform underutilized municipal wastewater solids into a renewable, cost-effective

37 feedstock for liquid transportation biofuels.

38 Municipal wastewater from publicly owned US WWTPs with influent flow rates >5 Mgal/d (~75,000

39 residents) contains approximately 160 TBtu/y of chemical energy (WRF, 2014). The energy, nutrient, and

40 metal assets contained in municipal wastewater solids are currently valued in the range of USD 550/T,

41 versus USD 300−800/T in costs for sludge treatment and disposal (Peccia and Westerhoff, 2015;

42 Westerhoff et al., 2015). The most common wastewater treatment approach—aerobic liquid with anaerobic

43 solids treatment—is inefficient in terms of energy and materials recovery (Mulchandani and Westerhoff,

44 2016; Westerhoff et al., 2015; Peccia and Westerhoff, 2015; Shen et al. 2015; WRF, 2015; Rittman et al.,

45 2011; McCarty et al. 2011). Most of the chemical energy is disposed with biosolids (30–50%), discharged

46 with effluent (10%), or lost through volatilization or flared as biogas (WRF, 2014; WRF, 2015). Low

47 carbon-recovery efficiency at WWTPs substantially decreases methane conversion potential (Biller et al.,

48 2018), and results in 7.18 MT/y of treated biosolids, which are land applied, incinerated or sent to a landfill

49 (NEBRA, 2007).

50 The historical objective of anaerobic digestion (AD) was to convert bulky, odorous, and putrescible

51 raw sludge to a well-digested material with less mass that could be rapidly dewatered without emitting

52 noxious odors (Clark et al., 1977). As performance improved, the objectives of digestion expanded to

53 include using digester gas to meet on-site energy needs. However, the cost of building and operating

54 mesophilic AD is not readily recovered solely by adding energy recovery processes to offset utility costs,

55 nor can it cover biosolid disposal costs (WRF, 2012b; Metcalf & Eddy, 2014). Further, operational, policy,

56 legal, and economic challenges have limited the widespread adoption of energy recovery projects at
57 WWTPs (Alliance, 2018; WRF, 2017a; WRF, 2015; UC Davis, 2016; Selecky et al. 2014; WRF, 2012a;

58 EPA, 2011). Currently, less than half of WWTPs with influent flow rates >1 Mgal/d (~10,000 residents)

59 operate AD units, and only 10% of those plants utilize biogas for heating or electricity generation, resulting

60 in very low sludge-derived biogas utilization nationwide (Shen et al. 2015; WRF, 2015; EPA, 2011).

61 Strategies to improve treatment and energy recovery tend to be incremental rather than transformative

62 (Peccia and Westerhoff, 2015). Municipalities are primarily focused on achieving their mission to meet

63 statutory responsibilities for sewage treatment and pollution control. But WWTP now face myriad

64 emerging challenges, including aging infrastructure (ASCE, 2017), increasing demand for services (EPA,

65 2016), increasing regulatory requirements and consent decree mitigation costs (NACWA, 2015), higher

66 energy and chemical costs (EPRI, 2013, NACWA, 2018), social and environmental concerns regarding

67 land application of biosolids (EPA, 2018), and scope expansion to include materials recovery, carbon

68 management, emissions reduction, water reuse, and co-digestion (NACWA, 2018; Peccia and Westerhoff.

69 2015; Daigger, 2009; Guest et al. 2009).

70 US municipalities spend USD >50 B/y to provide sewer and wastewater services (USCOM, 2018). But

71 wastewater utility rates are increasing at double the rate of inflation and facilities spend more on debt

72 retirement and operations and maintenance than on capital investments (NACWA, 2015; USCOM, 2015).

73 Local governments have also requested USD 271 billion to address a backlog of capital investment needs

74 over the next decade (EPA, 2016). New approaches are needed to convert WWTPs into fiscally and

75 environmentally sustainable resource recovery centers (Mulchandani and Westerhoff, 2016).

76 Hydrothermal liquefaction (HTL) is a thermochemical process that converts biomass into biocrude

77 intermediate by processing waste in a high temperature (520–647 K), pressurized (4–22 MPa) water

78 environment (Elliot et al. 2015). HTL offers substantial potential benefits for WWTPs, including

79 establishing a new revenue stream by converting underutilized wastewater solids into renewable energy in

80 the form of biofuels; improving chemical energy and carbon recovery efficiency; reducing solids mass by

81 >75%; increasing loading rate efficiency by 100 compared to AD; producing sterilized, low-odor solids
 82 and a particle and pathogen-free effluent; concentrating metals and phosphorus in solids for recovery; and

83 providing co-liquefaction opportunities (Snowden-Swan et al., 2017; Biller et al., 2018; Mulchandani and

84 Westerhoff, 2016; WRF, 2016; Elliot et al., 2015; Pham et al., 2013).

85 Nationwide, approximately 14 MT/y of dry primary and secondary municipal wastewater solids are

86 available for direct conversion to a biocrude intermediate (Seiple et al., 2017). Treating wastewater solids

87 with HTL has the potential to produce 4.32 GL/y (1.14 Bgal/y) of biocrude (Skaggs et al., 2018). According

88 to the DOE Conceptual Biorefinery Design Study—an HTL techno-economic assessment (TEA) for target

89 year 2022—the minimum WWTP scale required to economically support a stand-alone HTL feedstock

90 conversion plant is 110 Mgal/d (Snowden-Swan et al., 2017); however, this does not account for substantial

91 potential savings from avoided biosolids disposal costs.

92 The objective of this study is to estimate minimum economic deployment scale for HTL and total

93 sustainable feedstock supply for transportation biofuels production at >15,000 publicly owned wastewater

94 treatment plants in the United States. A discounted cash flow method is used to assess the net present value

95 (NPV) of site-specific HTL and AD energy investments at existing WWTPs over a 30-year period when

96 considering capital costs, operating costs, a commercial rate of return, biofuels revenue, taxes, and disposal

97 savings. This study differs from the Snowden-Swan (2017) HTL TEA study by (1) modeling site-specific

98 stand-alone (on-site) HTL integration opportunities for the entire US fleet of WWTPs with comparison to

99 AD, (2) considering the savings from avoided biosolids treatment and disposal, (3) assuming public

100 ownership of the energy investment for more direct comparison to existing AD investments, and (4)

101 excluding costs and benefits of upgrading biocrude to biofuel in the absence of a realistic network of

102 proposed biorefineries and traditional refineries capable of processing biocrude (Biddy et al., 2017).

103 2. Materials and Methods

104 To achieve the objectives of this study, annual budgets for energy, solids, and finances were developed

105 to characterize current and hypothetical future solids treatment performance at >15,000 US WWTPs
106 including the conterminous US, Alaska, Hawaii, and territories. Current performance is estimated based on

107 existing WWTP configurations. Future performance is modeled assuming facilities enhance liquid

108 treatment processes to improve solids capture and upgrade solids treatment processes to maximize energy

109 recovery.

110 Two energy recovery pathways are considered, including (1) biocrude production using a continuous

111 side-stream HTL process that ingests a dewatered (~20% solids) 50/50 mixture of primary and secondary

112 sludge; and (2) purification and compression of AD-derived biogas into pipeline-quality biomethane for

113 use as vehicle fuel, also referred to as compressed, renewable, or sustainable natural gas (CNG, RNG,

114 SNG). Since total biocrude potential from municipal wastewater solids only represents 0.4% and 0.8% of

115 2018 US crude and motor gasoline consumption respectively (EIA, 2019d), we assume 100% of

116 economically produced biocrude and biomethane could be utilized in proximity to production.

117 Current fleet performance is modeled as a “Baseline” scenario for comparison to the following

118 hypothetical fleet upgrade scenarios: (1) “HTL Max” assumes new scaled HTL units are deployed at each

119 facility to maximize biocrude production; (2) “AD-Fill” assumes AD units are deployed at facilities where

120 they do not already exist to maximize biomethane production; and (3) “AD-New” extends the AD-Fill

121 scenario by assuming all existing AD units are also replaced to provide a more direct comparison to the

122 HTL Max scenario. Renewable Identification Number (RIN)-credit-adjusted versions of each AD scenario

123 (i.e., “AD-Fill + RINs” and “AD-New + RINs”) are also included to reflect current price subsidies for RNG.

124 Other federal and state financial incentives such as renewable fuels or tax credits are not considered.

125 A 30-year lifecycle is modeled for each scenario (alternative solids management upgrade pathway) to

126 determine the minimum plant size that could economically support each technology configuration. If the

127 NPV of a given pathway is ≥ 0, then the total wastewater solids mass for that facility is considered a

128 sustainable, cost-effective feedstock supply for biofuels production.

129 2.1. Fleet Characterization

130 Current and future liquid and solids wastewater treatment configurations are characterized as a basis

131 for developing modeled site-specific annual energy and solids budgets, which are then used to model energy

132 recovery economics at WWTPs. Seiple et al. (2017) previously developed a comprehensive WWTP

133 inventory as part of an effort to assess total wastewater solids production in the US; however, the estimates

134 did not reflect site-specific treatment configurations. This study enhances the Seiple et al. (2017) WWTP

135 inventory by assigning alphanumeric identifiers representing realistic liquid and solids treatment

136 configurations using the codes available in supplemental Table S1. The assigned identifiers are used to

137 retrieve and scale recently modeled WWTP performance data (WRF, 2015). In some cases, data

138 substitution was used to create synthetic liquid/solid process data combinations from the 25 standard

139 configurations modeled by the Water Research Foundation (WRF). Minor accounting discrepancies may

140 occur within the synthesized data due to scaling, model uncertainty, or data substitution.

141 In total, 46 different liquid-solid process combinations were assigned to characterize existing biological

142 treatment configurations for the entire fleet. The identifiers were manually assigned for all facilities with

143 influent flow ≥10 Mgal/d based on facility documentation and expert knowledge. Facilities within the flow

144 range of 1–10 Mgal/d were assumed to use conventional primary and secondary treatment with lime

145 stabilization. Facilities treating ≤1 Mgal/d were assumed to use basic secondary treatment (no primary)

146 with lime stabilization. If a WWTP configuration did not match a standard or synthetic model, it was

147 assigned one that best represented the process in terms of energy and solids disposition in solids processing.

148 Current configurations were calibrated to verify the presence of AD and incineration. The National

149 Association of Clean Water Agencies (NACWA) provided a list of utilities with confirmed wastewater

150 solids incinerators circa 2016 as required by a court action (NACWA, 2013), which was adapted from data

151 compiled by the United States Environmental Protection Agency in 2013. The Water Environment

152 Federation biogas database (WEF, 2015) was used to confirm the presence of AD, where matches could be

153 made based on the facility name and location.

154 Future fleet conditions were modeled by upgrading liquid and solids identifiers for facilities with

155 influent flow ≥3 Mgal/d, to maximize energy recovery (i.e. biocrude or biogas). Facilities treating <3

156 Mgal/d were not upgraded because they are below the expected practical economic limit of biofuels

157 projects. For AD based scenarios, biological systems were upgraded to a smaller set of eleven possible

158 configurations according to the index available in supplemental Table S2. Already pioneering biological

159 systems were permitted to remain in use. For the HTL scenario, all sites were upgraded to use HTL.

160 Given current industry and regulatory trends, several processes were phased out in future biological

161 scenarios including aerobic digestion, lime stabilization for WWTPs >3 Mgal/d, trickling filtration,

162 primary-only systems, and multi-hearth incineration (MHI). Chemically enhanced primary treatment

163 (CEPT) was adopted whenever possible, which yields downstream aeration energy savings and redirects

164 carbon for energy recovery (WRF, 2010). Facilities exporting solids for treatment were each assigned a

165 code representing the ultimate solids process applied.

166 2.2. Scaled Energy and Solids Budgets

167 Site-specific annual estimates of total recoverable chemical energy and solids, and their disposition by

168 waste phase, were generated for each scenario as a basis for financial modeling.

169 Current and future liquid and solids treatment configuration identifiers were used as an index to retrieve

170 modeled chemical oxygen demand (COD) and dry weight total suspended solids values by waste phase.

171 Energy and solids values were then scaled based on influent flow from their model scale of 10 Mgal/d.

172 COD values are converted from a mass to energy basis assuming 13.9 kJ/g COD, the maximum heat energy

173 possible from methanogenic wastewater treatment, as reported by Heidrich et al. (2011). For example, Fig.

174 1 depicts the partitioning of embedded chemical energy by waste phase for the most common treatment

175 configuration, primary treatment with gravity thickening and activated sludge with mechanical thickening

176 followed by AD (identifier B1), at a scale of 10 Mgal/d (WRF, 2015). Influent energy is partially captured

177 in primary and secondary solids with some losses during treatment and to facility effluent. Total recoverable

178 energy, which is embedded in an untreated mix of primary and secondary sludge, is partitioned among three
179 waste phases after solids treatment. The energy content of the biogas represents recovered energy. The

180 dry cake phase represents disposable biosolids. Side-stream aqueous waste is recycled to the headworks.

181 Recoverable solids are modeled for the same waste phases.

182

183 Fig. 1. Percent chemical energy by waste phase for B1 at 10 Mgal/d (adapted from WRF, 2015).

184

185 To simply comparison of baseline and future scenarios, treatment performance data were not adjusted

186 for likely changes in influent waste quantity or quality. Therefore, influent energy and solids levels are the

187 same for all scenarios at a given WWTP. Total recoverable energy and solids could differ from the baseline

188 due to enhanced liquid treatment assumptions. But, all future scenarios for a given WWTP have equivalent

189 starting values for total recoverable energy and solids. Future AD and HTL scenarios differ in terms of

190 how recoverable energy and solids disposition is modeled. AD solids treatment performance is again based

191 on synthesized WRF model data.

192 HTL solids treatment performance is modeled after recent literature. Disposed and avoided HTL solids

193 are estimated by applying a mass reduction factor of 76.5% (Snowden-Swan et al., 2017) to future total

194 recoverable dry solids. Biocrude energy content is estimated as the product of previously modeled site-

195 specific estimates of biocrude (Skaggs et al., 2018) and a lower heating value (LHV) of 124,990 Btu/gal

196 (Snowden-Swan et al., 2017). Separated HTL solids are estimated to contain 4% of total biocrude energy,

197 which reflects expected improvements for liquid-solid separation (Snowden-Swan et al., 2017). The balance

198 of energy is contained in side-stream aqueous wastewater, which is assumed to be treated and recycled.
199 2.3. Scaled Financial Budgets

200 Site-specific financial budgets summarize process-upgrade capital expenses (CapEx); solids treatment

201 operating expenses, such as parts, labor, chemicals, and natural gas and electric utilities (excluding odor

202 control, HVAC, and lighting); solids disposal costs; revenues from the sale of biomethane or biocrude; and

203 savings from avoided solids disposal. All financial data are adjusted to an annualized 2017 basis using

204 Chemical Engineering magazine’s Plant Cost Index (CEPCI, 2018).

205 2.3.1. Capital Expenses

206 CapEx estimates for process upgrades are based on literature values available in supplemental Table

207 S3. Capital costs are scaled based on facility influent flow using an engineering cost scaling method called

208 “six tenths rule” (Tribe and Alpine, 1986), and calibrated against facility documentation. CapEx costs for

209 AD, CEPT, and primary treatment were estimated by WRF (2014) for a modeled 10 Mgal/d facility.

210 Secondary treatment costs are assumed to be 75% more than primary.

211 HTL CapEx costs are adopted from the Snowden-Swan et al. (2017) HTL TEA, which based its costs

212 on 100 dry T/day of wastewater solids throughput, the equivalent of a 110 Mgal/d wastewater facility.

213 Because HTL is an emerging technology, no discounts were applied to capital costs, despite overlap

214 between some modeled HTL processes and existing WWTP process. CapEx for liquid process upgrades

215 (i.e., CEPT, primary, secondary) were applied to both HTL and AD future scenarios, because improving

216 liquid treatment and solids capture enhances biofuels production for both technologies.

217 This study recalls Equation 1 reported by AGF (2011) to estimate the capital costs for gas cleanup and

218 compression of pipeline-quality gas as a function of annual throughput of raw biogas:

908143
219 𝐺𝐶𝐶 = 4.72 + 𝑉𝑎
(1)

220 where GCC is the CapEx for gas cleanup in USD per MCF and Va is the annual volume of biogas in MCF.

221 Pipeline, fuel station, and interconnection expenses, which can add considerable expense to biomethane

222 projects, are unique to each facility and are not considered in this national-scale study.
223 2.3.2. Operating Expenses

224 Fixed and variable solids management related operating expenses (OpEx) are estimated based on

225 literature factors available in supplemental Table S4. The cost of labor, chemicals, and utilities are adapted

226 from WRF (2014) and WRF (2015). HTL-specific expenses are adapted from Snowden-Swan et al. (2017),

227 with discounts applied to avoid redundant dewatering and labor costs. CEPT chemical costs are applied to

228 both HTL and AD scenarios.

229 State-specific 10-year (2008–2017) average industrial electricity and 5-year (2013–2017) average

230 industrial natural gas real prices (2017 basis) are calculated based on historical prices published by the US

231 Energy Information Administration (EIA, 2019b; EIA 2019c). Natural gas prices are calculated for a

232 shorter historical period to exclude price disruptions from hurricanes that occurred from 2005 to 2008.

233 Annual biogas cleanup and compression operating costs are estimated as a function of annual raw

234 biogas throughput by recalling Equation 2 from AGF (2011):

93604
235 𝐺𝐶𝑂 = 1.91 + (2)
𝑉𝑎

236 where GCO is the OpEx for gas cleanup in USD per MCF, and Va is the annual volume of biogas in MCF.

237 The annual biogas throughput is derived from estimates of methane throughput, assuming a 65% methane

238 content. Methane throughput is estimated using a theoretical conversion factor of 0.40 m3 methane per kg

239 COD, when converted at 35°C (Metcalf & Eddy, 2014).

240 Because HTL effluent is a particle- and pathogen-free waste (Biller et al., 2018) similar in composition

241 and strength to dewatered digester centrate (Metcalf & Eddy, 2014), we adopt air stripping costs from

242 Snowden-Swan et al. (2017) as a proxy for any additional treatment costs related to ammonia removal from

243 recycled HTL aqueous side-stream effluent.

244 2.3.3. Revenue

245 In the absence of a set market price for renewable biocrude, HTL revenue is estimated based on a 10-

246 year annual average US Refiner Acquisition Cost of Composite Crude (2008–2017) of USD 1.82/gal (EIA,
247 2019a). The refiner acquisition cost of composite crude, which is the weighted average price refiners pay

248 to purchase and transport domestic or imported crude oil, provides a reasonable proxy for biocrude

249 acquisition price. Federal and State incentives such as biomass-based diesel D7 and D4 RIN credits (EPA,

250 2019b) and tax credits, which would likely improve HTL economics, are not considered for biocrude.

251 Because RIN credits already exist for RNG, two revenue scenarios are considered. Minimum

252 biomethane revenue is estimated based on a 5-year (2013–2017) annual average Henry Hub Natural Gas

253 spot price of USD 3.25/MMBtu (EIA, 2019e). Maximum biomethane revenue is estimated based on a RIN

254 adjusted price of USD 23.34/MMBtu, which is calculated by adding Cellulosic (D3) RIN credits to the

255 average Henry Hub price, then subtracting a 30% RIN brokerage fee for RIN verification, reporting,

256 bundling, and marketing. Qualified D3 RINs have a 3-year (2016–2018) annual average price of USD 2.21,

257 which is equivalent to USD 28.70/MMBtu (EPA, 2019a).

258 2.3.4. Biosolids Disposal Cost

259 The Clean Water Act regulates the final use and disposal of domestic wastewater sewage sludge (EPA,

260 1999). Each facility adopts a strategy that complies with its unique permit requirements, but ultimately,

261 treated sludge (biosolids) is either land applied, landfilled, or incinerated (NEBRA, 2007). Solids treatment

262 and disposal costs range from USD 300–800/T (Peccia and Westerhoff, 2015; Westerhoff et al., 2015). In

263 the absence of a comprehensive data set summarizing site-specific biosolids disposition practices and

264 expenses for WWTPs, we reviewed the Chicago Metropolitan Water Reclamation District (MWRD) 2018

265 Annual Budget (MWRD, 2018) and estimate average solids treatment and disposal costs to be USD 400/T;

266 that value is also used to estimate savings from avoided disposal costs. This average cost reflects any

267 thickening, stabilization, dewatering, drying, hauling, tipping, and indirect expenses associated with solids

268 handling and disposal. AD and HTL process operating costs are modeled separately.

269 2.4. Economic Analysis

270 Based on modeled annual expenses, income, savings, and factors in Table 1, a discounted cash flow

271 analysis is performed to calculate the NPV of each upgrade scenario at each of the WWTPs. Energy
272 projects with an NPV ≥ 0 are considered economically viable, and the local recoverable wastewater solids

273 are classified as an economically sustainable feedstock. A sensitivity analysis is performed to evaluate the

274 importance of key assumptions on project economics.

275 Because AD infrastructure is commonly owned and operated by WWTPs, in this study we assume the

276 same for HTL infrastructure, providing consistency between the two technologies in the regulatory risk and

277 financial assumptions. However, many different ownership models are possible for energy projects, which

278 may change financing assumptions (WRF, 2017b).

279 The wastewater solids feedstock price is set to zero, since WWTPs own the source material. The

280 income tax rate is also zero because municipalities are exempt from federal, state, and local income taxes.

281 For simplicity, we assume overnight construction and start-up. A 7-year Modified Accelerated Cost

282 Recovery System (MACRS) depreciation schedule is applied.

283 A recent financial survey of WWTPs indicates that revenue bonds, Clean Water State Revolving Fund

284 (SRF) loans, and general obligation bonds account for 71%, 15%, and 9% of WWTP capital debt financing,

285 respectively, with 90% of survey respondents reporting better than A+/A1 bond ratings (NACWA, 2018).

286 Municipal bonds typically have interest rates one to two percentage points below Treasury bills.

287 Subsequently, we assume 100% project financing using a 30-year revenue bond with an interest rate of 2%,

288 using the long-term average SRF loan interest rate (EPA, 2016) as a proxy for the mix of low interest

289 financing options available to municipalities.

290 Table 1

291 Key financial assumptions used in cost model.

Description Value
Project term 30 years
Internal rate of return 10%
Income tax rate 0%
Debt financing 100%
Loan term 10 years
Interest rate 2%
 Depreciation schedule 7-year MACRS
Feedstock cost USD 0/T
Residual disposal cost USD 400/T

292 3. Results

293 3.1. Existing Fleet Characterization

294 A baseline energy and solids budget for existing wastewater infrastructure is presented in

295 Table 2. Facility level baseline estimates of scaled energy and solids are also available as supplemental

296 data. As modeled, influent US domestic wastewater contains approximately 236 PJ/y (224 TBtu/y) of

297 embedded chemical energy and 10 Tg/y (11 T/y) of dry solids. Total recoverable energy and solids,

298 represented as the sum of primary and secondary sludge, contains 167 PJ/y (158 TBtu/y) of chemical energy

299 and 11 Tg/y (12 T/y) of dry solids. Recoverable energy magnitudes decrease with treatment as organic

300 material is degraded and volatilized. Recoverable solids exceed influent levels as a result of new

301 microorganism cell growth during the secondary treatment.

302 Table 2

303 Baseline chemical energy and solids by waste phase and flow range.

≥1 ≥5 ≥10
All Mgal/d Mgal/d Mgal/d
No. 15008 3740 1132 576
Flow (Bgal/y) 34.37 32.11 26.32 22.54
Energy (PJ/y)
Facility Influent 236.30 220.76 180.96 154.94
Facility Effluent 28.32 26.88 21.65 18.23
Recoverable 166.63 157.08 128.56 109.90
Disposed 104.37 95.94 72.66 59.96
Recovered (Biogas) 43.18 43.18 41.54 37.80
Solids (dry Tg/y)
Facility Influent 9.97 9.31 7.64 6.54
Facility Effluent 0.74 0.72 0.56 0.45
Recoverable 11.07 10.42 8.60 7.40
Disposed 7.60 7.02 5.52 4.65
 Avoided 3.47 3.39 3.08 2.75
304

305 The modeled influent chemical energy potential for facilities ≥5 Mgal/d of 180.96 PJ/y (171.39 TBtu/y)

306 is only 8% higher than the WRF (2014) estimate of 167.88 PJ/y (159 TBtu/y) for facilities >5 Mgal/d.

307 Energy disposition by waste phase also aligns with the WRF (2014) study, with approximately 44% of

308 influent chemical energy residing in biosolids, 12% discharged with effluent, 18% captured as biogas, and

309 the remainder recycled or lost during treatment. Total recoverable solids of 11.07 Tg/y (12.20 T/y) is within

310 12% of previous estimates of total untreated sludge of 12.56 Tg/y (13.84 T/y) by Seiple et al. (2017), which

311 assumed a uniform water treatment process rather than site-specific treatment configurations modeled in

312 this study. Estimated total modeled biosolids of 7.60 Tg/y (8.38 T/y) dry weight is about 17% higher than

313 the most recent national biosolids inventory of 6.51 Tg/y (7.18 T/y), which was published more than 10

314 years ago (NEBRA, 2007).

315 Table 3 summarizes key financial aspects of solids management for the baseline scenario of existing

316 WWTPs under currently implemented technologies. Nationally, wastewater solids treatment consumes

317 1.51 TWh/y of grid electricity and 13.63 GJ/y (12.91 TBtu/y) of natural gas, excluding any energy used for

318 chemical production. Biosolids disposal costs are approximately USD 3.35 B/y, not accounting for any

319 revenues from product sales which account for ≤1% of total utility revenues (NACWA, 2015). Existing

320 sludge reduction practices, such as AD, avoid approximately USD 1.53 B/y in disposal costs. Total biogas

321 energy potential of 43.18 PJ/y is equivalent to approximately 1.24 Gm3/y of methane and is potentially

322 worth USD 0.13–0.96 B/y, depending on end use (RNG or process NG) and possible inclusion of RIN

323 credits. Total national methane potential is likely higher than reported, given the lack of comprehensive

324 contemporary data on the existence, capacity, and performance of AD systems nationwide.

325 Table 3

326 Baseline annual solids management revenue and expenses for existing WWTP.

Item Units Value

 Electricity Usage TWh/y 1.51
Electricity Cost USD B/y 0.12
Natural Gas Usage GJ/y 13.63
Natural Gas Cost USD B/y 0.08
Solids Disposal USD B/y 3.35
Avoided Disposal USD B/y 1.53
Methane Yield Gm3/y 1.24
Value as RNG USD B/y 0.13
Value as process NG USD B/y 0.27
Value as RNG+RINs USD B/y 0.96

327 3.2. Potential Future Sustainable Feedstock

328 Under assumed future treatment configurations, influent energy and solids values remain unchanged.

329 Improvements to liquid treatment decrease facility effluent energy and solids to 24.78 PJ/y (23.47 TBtu/y)

330 and 0.47 Tg/y (0.52 T/y), respectively. Conversely, potential recoverable chemical energy and solids

331 increase by 18% to 196.39 PJ/y (185.99 TBtu/y) and 12% to 12.37 Tg/y (13.63 T/y), respectively.

332 Table 4 presents the results of the 30-year cost analysis for each upgrade scenario. Minimum and

333 average deployment scale, economic project count, total utilized feedstock, total biofuels output and value,

334 total capital costs, disposal savings, and energy and solids disposition are summarized for sites where

335 project NPV ≥0.

336 Table 4

337 Results for economically sustainable projects (NPV ≥ 0) by scenario.

Units HTL AD-Fill AD-Fill AD- AD-New

Max + RINs New + RINs
Min / Mean Scale1 Mgal/d 5/25 59/205 5/34 - 36/135
Economic Projects count 1061 6 551 84
Feedstock Utilized Tg/y (%) 9.57 (77) 0.44 (4) 6.90 (56) - 4.11 (33)
Biocrude GL/y 3.52 - - - -
Biomethane Gm3/y - 0.11 1.69 - 1.02
Product Value USD B/y 1.69 0.01 1.30 - 0.78
Energy Recovered PJ/y 122.56 3.81 58.72 - 35.31
Energy Disposed PJ/y 4.90 2.35 37.07 - 22.09
Solids Recovered Tg/y 7.32 0.27 3.86 - 2.32
Solids Disposed Tg/y 2.25 0.17 3.04 - 1.79
Disposal Costs USD B/y 0.99 0.08 1.34 - 0.79
 Disposal Savings USD B/y 3.23 0.12 1.70 - 1.02
Total CapEx USD B 14.53 0.06 2.80 - 4.24
1
Not all facilities above min scale have an NPV ≥ 0
338

339 According to the HTL Max scenario, the US fleet of WWTPs could economically support stand-alone

340 HTL integration to a minimum flow scale of 5.0 Mgal/d, utilizing 9.57 Tg/y (10.55 MT/y), or 77% of total

341 recoverable dry wastewater solids, as a sustainable feedstock to produce 3.52 GL/y (0.93 Bgal/y) of

342 biocrude, which represents 0.3% and 0.7% of total crude and motor gasoline consumed in the US in 2018

343 (EIA, 2019d).

344 In contrast, the AD-Fill scenarios indicate adding AD systems where they do not currently exist is only

345 cost-effective at larger facilities, unless biogas is fully utilized as a RIN-subsidized transportation fuel. The

346 AD-New scenarios indicate replacing aging AD systems fleet-wide will be fiscally challenging when

347 considering residual disposal costs in the payback period, even under full biogas utilization conditions. The

348 AD scenarios highlight the value of the sunk costs of existing AD systems, which explains why many

349 systems are used and maintained well beyond their planned lifecycle.

350 Our analysis suggests HTL could be a more cost-effective, environmentally sustainable treatment

351 strategy for municipal wastewater solids and energy recovery pathway compared to AD. This is primarily

352 due to higher average on-site energy recovery efficiency of HTL (80%), compared to 40–50% for AD.

353 Furthermore, substantial savings are achieved by reducing wastewater solids mass by 75% with HTL,

354 compared to an average of 45% with AD. HTL is more cost-effective even when considering an

355 unsubsidized biocrude price of USD 14.56/MMBtu (based on biocrude lower heating value of 124,990

356 Btu/gal), compared to a RIN adjusted biomethane price of USD 23.34/MMBtu. HTL could also offer less

357 operational complexity without the need to carefully manage a biological treatment process.

358 Fig. 2 presents the results of the sensitivity analysis to measure the impact of key economic and

359 performance assumptions on total economically sustainable feedstock supply in the HTL Max scenario,

360 which utilized 9.57 Tg/y (10.55 MT/y), or 77% of total feedstock. Disposal costs ranged from USD 300–
361 500/T. Decreasing disposal costs, which also decreases savings from avoided disposal costs, reduces

362 economic feedstock utilization by 1.12 Tg/y (1.23 MT/y) to 68% of total available feedstock. Increasing

363 disposal costs increases feedstock utilization by 0.74 Tg/y (0.82 MT/y) to 83% of total feedstock.

364 Increasing HTL capital costs by 25% decreases feedstock utilization by 1.01 Tg/y (1.11 MT/y), to 69% of

365 total feedstock. Decreasing capital costs by 25% increases feedstock utilization by 0.97 Tg/y (1.07 MT/y)

366 to 85% of total feedstock. Lower HTL capital expense could result from improved cost efficiencies from

367 modularization, oil filter performance improvements, or reduced HTL effluent treatment costs. Higher

368 costs could result from uncertainty related to deploying emerging technology like HTL or differences in

369 waste composition compared to experimental results. Actual biocrude prices could also differ from the

370 proxy price we chose for this analysis, especially if federal and state financial incentives are considered.

371 Decreasing biocrude acquisition price to USD 1.50/gal would reduce feedstock utilization by 0.55 Tg/y

372 (0.61 MT/y) to 73% of available feedstock, while increasing the price to USD 2.50 would increase feedstock

373 utilization by 0.77 Tg/y (0.85 MT/y) to 84% of total feedstock. Adjusting the biocrude conversion

374 efficiency from a conservative rate of 37% to 48%, the rate used in the HTL TEA (Snowden-Swan et al.,

375 2017), increases feedstock utilization by 0.65 Tg/y (0.72 MT/y) to 83% of total feedstock. Increasing the

376 interest rate to 5%, the 10-year average for AAA rated 30-year revenue municipal bond yield, decreases

377 feedstock utilization by 0.61 Tg/y (0.67 MT/y) to 72% of total available feedstock. Finally, increasing the

378 income tax rate to the current corporate rate of 21% decreases feedstock utilization by 0.40 Tg/y (0.44

379 MT/y) to 74% of total feedstock.

380

381 Fig. 2. Sensitivity of “HTL Max” economic supply of 9.57 Tg/y to key assumptions.

382

383 Direct comparison of the potential effects of various energy investments to baseline conditions is more

384 easily achieved within the context of the overall fleet of WWTPs. Table 5 summarizes the performance of

385 a composite fleet consisting of economically upgraded (NPV ≥ 0) and non-upgraded (existing) WWTP

386 configurations. While influent energy and solids magnitude do not change, total recoverable and facility

387 effluent values must be adjusted for each scenario to reflect the mix of upgraded and non-upgraded

388 configurations. Since there were no economic projects in the “AD-New” scenario, it is excluded.

389 Compared to the baseline (existing conditions), integrating economically sustainable HTL projects into

390 the overall fleet of WWTPs could potentially recover 189% more energy and decrease solids disposal by

391 42%, thereby reducing residual disposal costs by USD 1.4 B/y from current practice. In contrast, the most

392 cost-effective AD scenario (AD-Fill + RINs), which supplements existing AD with additional biomethane

393 projects, could potentially increase energy recovery by 42% and decrease overall solids disposal by 6%,

394 thereby reducing residual disposal costs by USD 0.21 B/y. HTL requires more natural gas than AD, though

395 both processes use about the same amount of electricity. Natural gas consumption in future AD scenarios

396 decreases due to the retirement of multi-hearth incinerators. Increases in post-AD solids disposal costs, as

397 a result of improved solids capture in liquid treatment, are offset by additional biogas output.
398 Table 5

399 Composite fleet performance with economically upgraded (NPV ≥ 0) and non-upgraded WWTPs.

AD-Fill AD-New
Baseline HTL Max AD-Fill + RINs + RINs
Energy (PJ/y)
Facility Influent 236.30 236.30 236.30 236.30 236.30
Facility Effluent 28.32 25.48 27.83 26.62 27.26
Recoverable 166.63 192.89 167.91 184.36 177.12
Disposed 104.37 37.85 104.63 98.98 98.80
Recovered 43.18 124.57 43.90 61.47 56.66
Solids (dry Tg/y)
Facility Influent 9.97 9.97 9.97 9.97 9.97
Facility Effluent 0.74 0.52 0.71 0.60 0.65
Recoverable 11.07 12.16 11.14 11.74 11.47
Disposed 7.60 4.42 7.61 7.12 7.19
Avoided 3.47 7.74 3.54 4.62 4.28
Cost (USD B/y)
Solids Disposal 3.35 1.95 3.35 3.14 3.17
Avoided 1.53 3.41 1.56 2.04 1.89
Disposal
Electricity 0.12 0.14 0.12 0.13 0.13
Natural Gas 0.08 0.17 0.08 0.06 0.06

400 4. Conclusions

401 U.S. publicly owned wastewater treatment plants are highly engineered, spatially distributed facilities

402 that offer feedstock collection, storage, formatting, and effluent treatment processes to support biofuels

403 production using HTL. Aging infrastructure offers opportunities for massive investment in next generation

404 treatment technologies to achieve economic and environmentally sustainable energy production while

405 reducing disposal costs and environmental risk. Stand-alone HTL integration is possible at wastewater

406 treatment plants with a minimum influent flow ≥5 Mgal/d, thereby utilizing 9.57 Tg/y (10.55 MT/y), or

407 77% of total recoverable dry wastewater solids, as a sustainable feedstock to produce 3.52 GL/y (0.93

408 Bgal/y) of biocrude. Integrating economic HTL projects into the overall fleet could reduce biosolids

409 disposal costs by USD 1.4 B/y from current practice by avoiding USD 3.41 B/y in total disposal liability.

410 As modeled, HTL outperforms AD even without price incentives due to a higher energy recovery efficiency
411 and substantial savings from avoided biosolids treatment and disposal costs. Substantial additional

412 economic benefits could be possible by taking advantage of economies of scale from feedstock blending or

413 biocrude aggregation, increasing biocrude price through federal and state financial incentives, reducing

414 HTL effluent treatment costs, and eventual improvements in HTL commercialization and modularization.

415 Future work will consider the impact of regional feedstock blending and centralized conversion on

416 economically sustainable feedstock supply and HTL and biorefinery scale and siting.

417 5. Acknowledgements

418 The authors gratefully acknowledge the support for this research provided by the U.S. Department of

419 Energy through the Bioenergy Technologies Office (BETO). We also thank the reviewers for their

420 valuable feedback and comments on this report. Pacific Northwest National Laboratory is operated for the

421 U.S. Department of Energy by Battelle under Contract DE-AC06-76RL01830.

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Supplemental Tables
Click here to download Table: Seiple_etal_Supplemental_Tables.docx

Supplemental Table S1
Liquid and solid treatment process codes.
Liquid Processes
A Basic secondary activated sludge with primary treatment; co-thickening
(gravity) of primary sludge and waste activated sludge (WAS)
B Same as A, but separate primary (gravity) and WAS (mechanical) thickening
C Basic secondary without primary treatment; WAS mechanical thickening
D Trickling filter with primary; co-thickening (gravity) of primary sludge and
WAS
E Activated sludge nitrification without primary; WAS mechanical thickening
F Activated sludge nitrification with primary; separate primary (gravity) and
WAS (mechanical) thickening
G Activated sludge biological nutrient removal (BNR) with primary; separate
primary (gravity) and WAS (mechanical) thickening
H Activated sludge BNR with primary and chemical phosphorus (P) removal;
separate primary (gravity) and WAS (mechanical) thickening
I Activated sludge BNR without primary; WAS mechanical thickening
L Activated sludge enhanced nutrient removal (ENR) with primary; separate
primary (gravity) and WAS (mechanical) thickening
M Activated sludge ENR with primary and chemical P removal; separate
primary (gravity) and WAS (mechanical) thickening
N Aerobic membrane bioreactor (MBR) for BNR with primary; co-thickening
(gravity) of primary and WAS
O Pure-oxygen activated sludge
P Mainstream two-sludge (A/B) activated sludge w/ primary; co-thickening
(gravity) of primary and WAS
Primary-only Primary-only treatment
sSRT SF Short solids-retention-time (SRT) Step Feed
+CEPT Chemically enhanced primary treatment
CEPT-OPT Optimized treatment used as surrogate for future ENR/BNR performance
Solids Processes
1 AD, dewatering
2 Aerobic digestion, dewatering
3 Dewatering, lime stabilization
4 AD, dewatering, thermal drying
5 Dewatering, multiple-hearth incineration (MHI)
6 Dewatering, fluidized bed incineration (FBI)
7 Dewatering only
8 Lagoon/constructed wetland

1
Supplemental Table S2
Crosswalk of current-to-future biological treatment configurations.
Current Future Remarks
A/ 1, 3 B+CEPT/1 Add primary if required; Add
B/ 1, 2, 3, 5, 7 CEPT; Replace aeration, lime
C/ 1, 3 stabilization, MHI, and dewater-
D/ 1, 7 only with AD
B/ 4 B+CEPT/4 Add CEPT; Keep thermal dryer
A/ 6 B+CEPT/6 Add CEPT; Keep FBI
B/ 6
E/ 1, 3, 7 CEPT-OPT/1 Add CEPT; Add AD if required
F/ 1
G/ 1, 2, 5, 7
H/ 1
L/ 1, 5, 7
M/ 1, 3, 5, 7
G/ 6 CEPT-OPT/6 Add CEPT; Keep FBI
L/ 6
N/ 1, 7 N1 Add CEPT; Add AD if required
O/ 1, 5, 7 O+CEPT/1 Add CEPT; Add AD if required
P/ 1, 5, 7 P1 Add AD if required
Primary/ 1, 5, 7, 8 CEPT/1 Add CEPT; Add AD if required
sSRT SF/ 1, 6 No Change

2
Supplemental Table S3
Baseline liquid and solids process-upgrade CapEx costs.
Unit Modeled
Process Scale CapEx (2017)
(Mgal/d) USD M
AD 10 9.35
CEPT 10 0.92
Primary 10 2.00
Secondary 10 3.50
HTL 110 35.66

3
Supplemental Table S4
Fixed and variable operating expenses for solids management.
Parts (% of CapEx) 2%
FTE Hours per Year 2080
# FTE Scaled on
1.5 @10 Mgal/d
Flow
Labor Rate USD 50/hour
CEPT Chemicals USD 12,140/Mgal
HTL Electricity Use 35.13 kWh/Mgal
HTL Natural Gas Use 1.90 MMBtu/Mgal
Capacity Factor 90%