This section describes the five scenarios explored in this study, using the systems model for the Hunter region described above. Each scenario is considered at the current situation (based on 2016 data as a baseline) as well as forecasts at 5-year intervals until 2036 following the timeline of the 20-year regional blueprint published by the NSW government. The FEW2 nexus has been built up via scenario analysis and each scenario presents the system from the perspective of either water and wastewater, energy, waste or system-wise performance.
3.1 Scenarios explored in this study
- Business-as-usual (BAU); a baseline scenario using the current infrastructure in the region for water and energy (electricity and gas),
- Water and wastewater scenario, which includes introduction of new technology, e.g. water reclamation, and constraints on the use of raw source water,
- Closure of the coal-fired Liddell and Bayswater power stations in the near future, following Hunter Regional Plan 2036,
- Waste to energy scenario (WtE), in which biosolids, municipal solid wastes, agricultural wastes and other organic wastes are considered as the (co-)feedstock of renewable energy generation using anaerobic digestion (with thermal hydrolysis), incineration, gasification and pyrolysis, and
- Economic/policy scenarios, including changes of feed-in-tariffs and carbon credit to study the sensitivities of waste-to-energy.
3.2 Business as usual (BAU) scenario
Business as usual (BAU) scenario serves as a basis to analyse the changes in other scenarios. The current network for potable water production and wastewater treatment is established in this scenario. Power stations inside Hunter Region (Eraring and Vales Point) are modelled to supply all the electricity demand in 2016 [54]. As Hunter Region is a net producer of electricity, the power stations are also responsible for other regions in Australia. The model limits 10% capacity of the local electricity generators to use for local consumption. The rest is modelled to leave the system to support regions outside the study area. This is based on the electricity demand (414 MW) [54] and total generator capacity (4200 MW) [55] of Hunter Region in 2016. The existing facilities will be carried out to other scenarios as necessary constituents of FEW2 nexus. Details of existing facilities can be found in Supporting Information Part E.
In terms of waste management, biosolids management cost is modelled by referencing BAU options provided by GHD Pty Ltd [56], where five aerobic digestors are scheduled in 2030 to accommodate the increase in wastewater generation. The input solid waste streams are assumed to leave the system through recycle/recovery and landfill at different prices. The biosolids disposal cost via land application program is included in the system, based on cost data provided by Hunter Water [57]. Other than biosolids, the landfill levy of MSW is $78.20 dollar per tonne [58]. For other organic feedstocks, depending on the feedstock types, waste processing facilities are available locally according to MRA Consulting Group [59]. Organic wastes are mostly processed to make compost or used as animal feed, either on site at waste production facility or nearby farms through local arrangements. A gate fee is often charged by waste processers from waste producers to offset the cost of operating the site. Similar to landfill levy, gate fees will be incurred for organic wastes if they are to leave the system without further processing. This is specified by the cost associated with material export in the optimisation model. The assumptions for gate fees of various feedstocks are listed in Table 1.
Table 1. Feedstock gate fee or landfill price (AUD) [58].
MSW - Landfill
|
$78.20
|
Forestry
|
$78.20
|
Commercial and Industrial
|
$135.70
|
Post-consumer food waste
|
$78.20
|
Manure
|
$25
|
Other organic wastes
|
$10
|
The results of business as usual scenario show that no additional investment is needed to supply various resource demand in the Hunter Region, except for potential pipeline network construction during certain time intervals. Current infrastructure planning is more than sufficient to satisfy 100% demand. However, since no WtE treatment facilities are present, disposal of waste incurs operating cost of the system.
GHG emission exhibits steady growth from 2016 to 2036, mainly because the demand profile increases across intervals. A higher capacity for various existing facilities is required to satisfy all the demand. Figure 6 displays the GHG emission for BAU. Note that the values include all the existing facilities of water and wastewater treatment, power stations, etc.
The capital expenditure (CAPEX) and operating expenditure (OPEX) are shown in Table 2. The CAPEX value includes the construction cost of additional water and wastewater network required, as well as the capital cost of five aerobic digestors evaluated by GHD Pty Ltd [56]. The present value of cost is extracted from the background facilities (including existing water treatment plants and power stations) to compare with WtE scenarios. The values are summarised in Table 2.
Table 2. BAU performance indicators in year 2036.
CAPEX
|
OPEX
|
Present Value of Cost
(7% discount rate over 20 years)
|
GHG Emissions
|
228 million AUD
|
38 million AUD per annum
|
370 million AUD
|
145,400 tonnes per annum
|
3.3 Water and wastewater scenario
This scenario extends the BAU scenario and present the modelled FEW2 nexus from the perspective of water and wastewater. In BAU, the results show no investment is compulsory to satisfy regional water demand and wastewater treatment capacity from 2016 to 2036, which is based on an implicit assumption that raw source water resource can be extracted without a limit for drinking water production. The assumption is valid in most situations, considering the sub-tropical climate in Hunter, with annual rainfall at about 870 mm across the region [60]. Nonetheless, according to Hunter Water, the level of water storage dams responsible for the region decreases faster than usual during hot, dry season due to relatively high evaporation rates and shallow dam storages [61]. Figure 7 taken from Hunter Water shows the forecasting of storage levels under three scenarios, as well as the situations when water restrictions may apply.
The water storage outlook indicates that dam level will decrease to 60% of total storage and hit level 1 water restrictions under low rainfall scenario at July of 2019. Level 1 restrictions refers to forbidden sprinkler use for household and business users [62]. In this scenario, the critical water shortage level caused by unprecedented drought conditions is simulated in the model. Constraints are set to limit the extraction of raw water to ensure at least 60% of total dam storage. A set of options for water supply is included in this analysis such as water reclamation technology, desalination and water import.
NEWater, initiated by Singapore’s Public Utilities Board (PUB), is modelled as one of the water reclamation technologies in this study. Started in 1970s, the NEWater technology currently supplies up to 40% of Singapore water demand. NEWater plants collect treated wastewater from standard reclamation facilities and apply 3-step treatment to upgrade the water quality. This includes microfiltration to filter out microscopic particles, reverse osmosis to remove undesirable contaminants and ultraviolet disinfection to eradicate any residual organisms [63]. The produced water is sent for non-portable use (e.g. industrial use and air-con cooling) and non-direct portable use at dry seasons (i.e. blending with raw water in reservoir). Compared to other water reclamation designs, NEWater should thus be considered as a more reliable solution for drought conditions in Hunter Region for its wide applicability and proven reliability. It is thus configured in the model to produce both raw water and non-drinking water. Another option, desalination, is also included to produce drinking water directly. Together with water import, the optimisation model evaluates the economic and environmental performance of all options to provide the best combination.
The results indicate NEWater outperforms desalination and other options as it provides raw water to maximise the capacity of existing water treatment plant and delivers non-drinking water for industrial and agricultural use at the same time. Desalination and raw water import are not favoured by the model for their relatively high operating costs or prices. Figure 8 shows the production rate of NEWater and recycled water to wastewater ratio over 20 years. About 35% of wastewater need to be recycled in 2036 to prevent the dam level from falling below 60% at extremely drought periods in Hunter. To achieve this objective, three 15000 m3 per day NEWater plants need to be allocated in Port Stephens (2) and Dungog (1), amounting to a total CAPEX of 562 million AUD, which also includes the capital cost of additional wastewater pipeline connection. The proposed investment also incurs 11 million AUD annual operating costs and 54,000 tonnes of GHG emissions. The jobs created to operate such facilities are 78 Full Time Equivalent (FTE) positions. Under the constraint of raw source water extraction, residential water demands, and industrial water demands, including those from energy sector, are all met accordingly with drinking water or non-drinking water (drinking water can be converted to non-drinking water in the model, but the reverse is forbidden). The model signals the investment of NEWater, but the actual capacity and location of investment are still subject to the possibility of extremely droughts across the region, practicability of pipeline construction, etc.
3.4 Liddell and Bayswater power plant decommission scenario
The Hunter’s affluent coal storage and developed coal mining industry boost its economy and makes it the energy hub of the New South Wales (NSW) [64]. Four coal-fired power plants are located across the region, generating 8840 MW electricity and accounting for 44% power generation in NSW [42]. Nonetheless, Sustainable Development Goals (SDG) indicator 7.1 aims for sustainable energy security: “By 2036, ensure universal access to affordable, reliable and modern energy services” [65]. The NSW government has set an aspirational goal to achieve net-zero emissions by 2050 [66]. The local policies of the Hunter also echo this ambitious goal. The Hunter Regional Plan 2036 calls for the diversification of the energy sector to take advantage of “the region’s potential to be a major hub for next-generation power”. The regional government promises to promote initiatives that can combine economic and energy diversification, with two major coal-powered thermal power stations being scheduled to close in 2022 and 2035 (Liddell and Bayswater) [42]. The capacity of Liddell and Bayswater power plants is 2000 MW and 2640 MW respectively, amounting to 52% of the region’s total power generation. Based on the current electricity demand in Hunter Region, 200 MW and 264 MW vacancy of energy need to be filled in 2022 and 2035 respectively. Since the model uses 5 years as interval from 2016 to 2036, 2022 and 2035 are rounded to 2021 and 2036 respectively to simulate the plummet in electricity supply. With a total of 13 types of green technologies assessed in the resource-technology network, the resilience.io platform can provide a high-level optimisation of available options and signal the potential plan with minimised costs and GHG emissions.
With investment on the presented matrix of technologies, the electricity demand of all citizens can be met at both 2021 and 2036 across the region. The accumulated CAPEX to achieve the objective is 4.52 billion AUD at 2021 and 10.8 billion AUD at 2036. The associated annual OPEX is 91.2 million AUD at 2021 and 218 million AUD at 2036. With proposed clean energy scheme, the GHG reduction that can be achieved from 2016 level is 22.7% at 2021 and 53.3% at 2036. Figure 9 shows the optimal energy structures provided by the model in both 2021 and 2036. It is evident that solar panels, combined cycle gas turbine with carbon capture and storage (CCGT-CCS) and onshore wind energy conversion systems are most recommended by the model, due to their relatively low GHG emissions or low costs. Small-scaled biofuel and hydro power plants accounts for 11.6% and 10.6% of total clean energy facilities, suggesting the feasibility of decentralised distribution for such technologies in various regions. In addition, a total of 784 FTE jobs are created to support the operation of invested facilities.
3.5 Waste-to-Energy (WtE) scenario
In this scenario, a high-level optimisation of WtE technologies in 2036 is provided. The optimal strategies are evaluated in the context of business as usual scenario. Biosolid, municipal solid waste, agricultural waste and other organic waste within the study area are considered as (co-)feedstocks of renewable energy generation. Their spatial distribution lays the foundation of quantifying energy potential to be recovered from several WtE pathways [3]. A total of 19 combinations of technologies and feedstocks, including biochemical and thermochemical technologies (anaerobic digestion with thermal options and gasification) are modelled in the resource-technology network of resilience.io. Compared with traditional landfills, they are viewed as ‘green’ candidates to complete the WtE pathway. Table 3 also shows the details of evaluated technologies in terms of modelling inputs.
Table 3. Waste treatment and recovery technologies in modelling.
Technology Category
|
Waste Streams (Input)
|
Large AD with THP
|
Biosolids, MSW, Agricultural and other waste
|
Large AD
|
Biosolids, MSW, Agricultural and other waste
|
Farm AD
|
Biosolids, MSW, Agricultural and other waste
|
Large AD co-digestion
|
Biosolids, MSW
|
Plasma gasification
|
Biosolids, MSW, Agricultural and other waste
|
Fluid-bed gasification
|
Biosolids, MSW, Agricultural and other waste
|
Incineration
|
Biosolids, MSW, Agricultural and other waste
|
Pyrolysis
|
Biosolids, MSW, Agricultural and other waste
|
Both biogas and electricity are generated as the output resources of various anaerobic digestion (AD) technologies. Within the context of this study, the (co-)digestion of various feedstocks is evaluated. Thermal hydrolysis option (AD-THP) is also included in the model as promising extension of AD [44]. Both syngas and electricity can be generated as the output of fluid-bed or plasma gasification technologies, which operates at high temperature above 750 to convert organic waste into syngas, comprising hydrogen, carbon monoxide and usually carbon dioxide. Syngas can be further upgraded through methanation process, where hydrogen reacts with carbon oxides to form methane and water [50]. Biogas and syngas can then undergo pressure adsorption swing purification for upgrading to natural gas quality [49]. Electricity and biogas/syngas generated are used to support energy network by feeding into either electricity or gas grid to fulfil corresponding demand (if any). In addition to the common centralised facilities, technologies with decentralised features are also incorporated in the model to evaluate the feasibility of both options in a systematic approach. Solid organic wastes are also allowed to be transported by truck from region to region, which opens up flexibility for centralised waste treatment by considering feedstocks as well as demands in a holistic way. The model simulation and optimisation start from year 2016 where no WtE facility is installed. With 5-year intervals, the model progressively suggests optimal WtE strategies up to 2036 based on both economic incentives and spatial-temporal constraints (land use, labour hour, etc). The results are presented for biosolids, municipal solid waste, agricultural waste and other organic waste.
3.5.1 Biosolids
Four biosolids WtE options have been selected by the model at the timestamp of 2036. Plasma gasification with MSW as co-feedstocks (plasma), AD with thermal hydrolysis (AD-THP) and AD with MSW and wastewater as co-feedstocks (AD-co) are favoured by the model based on the objective function and defined economic and environmental performance indicators (see Supporting Information Part A Table A3). Pyrolysis and incineration of biosolids are eliminated by the model. The reason is presumed to be their inefficient conversion in generating renewable energy. 16.5 GWh per annum of energy can be generated from biosolids mainly in the form of biogas or syngas, which amounts to 5.1 GWh of electricity. This can be used to reduce Hunter Water’s wastewater treatment energy consumption by ~16%. Two centralised AD-THP are suggested by the model in Central Coast and Lake Macquarie respectively to treat biosolids only, accounting for ~70% of total biosolids in the study area. They are selected due to their relatively low costs. Plasma gasification are proposed to treat 8.6 tonnes per day biosolids together with municipal waste generated in or transported to Newcastle. The plasma plant is mainly used for municipal waste treatment, but the remaining capacity of the facility is further utilised for biosolids WtE processing. AD co-digestion of MSW with biosolids are also proposed in Port Stephens, Maitland and Cessnock. The plants treat most of the MSW in the corresponding region and handle a smaller portion of local biosolids. The remaining biosolids will be transported to Newcastle for centralised plasma gasification treatment. A farm AD plant is also allocated in Central Coast to recover energy from the remaining biosolids that will not be treated by the centralised AD-THP. This shows that the model only selects decentralised facilities when centralised plants cannot treat all the waste in a region.
3.5.2 Municipal solid waste
The results for MSW treatment planning are summarised in Figure 11. Similar to the biosolids results, pyrolysis and incineration are not selected by the model. Between two gasification options, plasma technology outperforms fluid-bed gasification for its lower cost per unit energy generation. As illustrated in Figure 11d, the geographic centrality of Newcastle in the study area is recognised by the model. Two centralised gasification plants are planned in Newcastle, which treat most municipal waste from Newcastle, Maitland, Port Stephens and Lake Macquarie, accounting about 50% of MSW generated in the study area. Investing the high capacity facilities in Newcastle minimises the transport costs of MSW from other regions. AD with municipal waste and liquid waste as co-feedstock (AD-co) is planned in Port Stephens, Maitland and Cessnock. No WtE facility is allocated for both Dungog and Branxton, whose MSW will be transported to Maitland or Port Stephens for treatment. Central Coast will be able to digest 124 tonnes per day of its own municipal waste in 2036 with AD-THP for MSW and decentralised farm AD. A small amount of waste is transported to Lake Macquarie to fill the remaining capacity. By processing biosolids and MSW, 178 GWh of biogas/electricity is produced, amounting to 55.2 GWh electricity. This can support about 60% of total electricity consumption by Hunter Water.
3.5.3 Agricultural and other organic waste
Agricultural and other organic waste feedstocks can contribute up to 80% of total WtE energy generated, as they are the largest source of feedstocks in the studied area. The results are summarised in Figure 12. Decentralised digestion plant is most favoured by the model with no transportation across the regions (Figure 12d). This is mainly due to the large quantity of agricultural available feedstocks, as well as the decentralised nature of agricultural waste distribution. Transportation becomes less cost-effective for large organic mass. A combined approximately 854 GWh energy can be generated and used by injecting into grid. 94% of the energy is in gas form and the rest is electricity.
In 2036, zones cannot reach 100% of WtE conversion due to excessive amount of organic feedstock identified in the region (Figure 13). Due to its relatively high waste generation, Central Coast treats only 28% under the spatial-temporal constraints included the model (land use, labour hour, etc). Newcastle and Cessnock are well above average due to the installed gasification and AD-THP facilities. The remaining regions recover about half amount of identified waste. The rest of the waste can only be landfilled or recycled by existing waste processors in the model, incurring potential energy debit and certain gate fees.
3.5.5 WtE performance indicators
This section presents various performance indicators for the model suggested WtE strategy at 2036, including CAPEX, OPEX, present values (PV), GHG emissions, etc (Table 4). The last column in the table compares WtE scenario with BAU from each type of feedstock. The WtE technologies manage to reduce waste management cost, avoid landfill levy and reduce gate fees. The electricity and gas produced by WtE facilities are used to supply energy demand, but the equivalent earnings of energy should be calculated to show the economic benefits. In the last column of Table 4, the potential landfill levy and gate fee savings for waste disposal are displayed in totality of present values from 2016 to 2036. Similarly, the equivalent revenue of energy generated is also calculated in present value to show the financial drivers behind the model results. The assumptions for present value analysis are included in SI part G.
For biosolids treatments, slight reduction of GHG emissions is observed when compared with BAU scenarios. This is contributed by the reduced electricity consumption for background facilities (wastewater and water treatment, etc). Besides the economic and environmental indicators stated above, a total of 72 FTE jobs are required to operate the allocated biosolids WtE units. This reveals that WtE installations also support economic activity in the region by creating new jobs. Compared to business as usual scenario, a present value saving in the order of $91m over 20 years can be achieved, which is the main driver of biosolids WtE optimisation. The transportation and reuse of biosolids can also be avoided in a scale of present value $33.2m, as biosolids are consumed in WtE facilities. Municipal solid waste present value figures reveal that the high landfill levy rate and high efficiency of renewable energy generation drive the model to optimise the MSW treatment as much as possible. For agricultural and other organic wastes, the generated energy, mainly presented in the form of upgraded biogas or syngas, can be very competitive to imported natural gas or electricity, which is the main driver of optimisation.
Table 4. Summary and comparison of the BAU scenario with other scenarios in Section 3.5
|
CAPEX (million AUD)
|
OPEX (million AUD per annum)
|
*Cost PV (million AUD)
|
Compared to BAU
|
PV of avoided costs from BAU (million AUD)
|
PV of equivalent revenue of generated energy (million AUD)
|
BAU
|
228
|
38
|
370
|
-
|
-
|
Biosolids
|
150
|
6.6
|
279
|
33.2 (management cost)
|
9.22
|
MSW
|
136
|
5.6
|
98.3
|
28.3
(landfill levy)
|
89.8
|
Agricultural & other organic Waste
|
258
|
10.7
|
173
|
44.4
(landfill or gate fee)
|
146
|
*CAPEX and OPEX over 20 years are included in cost PV.
3.6 Policy intervention scenarios
Decision makers face political challenges or encounter other key considerations that encourage or penalise certain technologies or resources. The economic and environmental sensitivity of WtE modelling should be evaluated. Carbon pricing scheme was introduced to Australian industrial sector from 2012 with a cost of $23 per tonne of emitted carbon dioxide, which was abolished later in 2014 [67]. The World Bank also proposed that price levels of US$30-100 per tonne to decarbonise the energy sectors [68]. In this scenario, the carbon credit prices are set as alternatively $0, $25, $75 or $125 (AUD) per tonne to study its effects on the three key indicators: CAPEX, OPEX and GHG emissions (Figure 14). The increase in carbon price is achieved by increasing the weighting of GHG emission in the overall RTN optimisation. The levels of prices are referred to as low, medium and high price respectively. The below CAPEX and OPEX figures only consider WtE technologies. GHG emissions include WtE, landfill and other energy generation sectors to demonstrate the impact of carbon price in the entire energy sector.
Based on the model, a higher carbon price can effectively accelerate the transition of energy structure towards a low-carbon direction. More WtE productions are favoured by the model considering that less electricity demand from power station reduces carbon emissions significantly. This results in different levels of increases in both CAPEX and OPEX under various carbon prices. Besides WtE technologies, higher carbon price also boosts the installation of renewable energy technologies such as solar panel, wind farm, hydroelectricity plant, etc. They substitute part of coal-fired power stations, but with much lower emissions. Under this scenario, a high carbon credit price (125 dollar) can thus reduce the carbon emission by about 21% in the entire system with 8.1% of increased capital cost.
Feed-in tariff (FIT) is another common policy intervention in energy sector. Similar to carbon price, FIT was once introduced by New South Wales government in 2009 at $0.60 per kWh and revoked in 2011 [69]. In this scenario, FIT of 60 cents per kWh for electricity and $0.20 per kWh for gas are applied. The different tariffs for electricity and gas are designed to account for the conversion efficiency from electricity to gas as well as the cost of upgrading biogas.
Figure 15 shows that CAPEX of WtE will increase by 16.3% due to the increased installation. Operating cost of WtE will be significantly reduced after accounting for the FIT. The carbon emission in the entire system will also decrease by about 20% due to the larger role played by both renewable energy and WtE facilities. Overall, the adoption of both carbon credit price and FIT are indicated as effective means to accelerate the transition of energy structure for reducing GHG emissions. Other considerations, such as public support, should also be accounted for decision makers to decide to implement interventions with encouragement or penalisation.