FEASIBILITY STUDY of the Material and Energy Utilization of Locally Available Alternative Fuels, Case of the Municipality of Ptuj

FEASIBILITY STUDY of the material and energy utilization of locally available alternative fuels, case of the Municipality of Ptuj

APRIL 2014

Author of the study:

Ul. 25. maja 3 2250 Ptuj ID za DDV: SI11060543 Matična številka: 6270832

TABLE OF CONTENTS

1. INTRODUCTION ...... 5 1.1 Short introduction ...... 5 1.2 Used abbreviations ...... 6 1.3 Definition of terms ...... 6 1.4 Technical basis for preparation of feasibility study...... 7 1.5 Splošni podatki o proučevanem območju General information about the studied area / Municipality of Ptuj...... 7 2. IDENTIFICATION OF PROJECT OF ENERGY AND MATERIAL USE OF LOCAL ALTERNATIVE SOURCES ...... 8 2.1 Aim of project ...... 8 2.2 Objectives of project ...... 8 2.3 Prenos študije v prakso (omejitve in predpostavke) Transfer of study into practice (limitations and assumptions) ...... 8 3. LOCATION OF PROJECT ...... 10 3.1 Macro location of project ...... 10 3.2 Micro location of project ...... 11 4. LOCAL SOURCES IN THE AREA ...... 13 4.1 Renewable and alternative fuels in the local area ...... 13 4.2 The use of sludge from wastewater treatment plants in combination as an alternative fuel . 13 4.3 Use of municipality waste as SRF/RDF fuel ...... 14 5. MASS AND ENERGY BALANCE ...... 17 5.2 Basic diagram of the collection system and mass flow ...... 17 5.3 Waste biomass ...... 18 5.4 Sewage sludge from sewage water cleaning process ...... 18 5.5 RDF/SRF fuel ...... 19 5.6 Total potential of the region for generating alternative fuels ...... 19 6. TECHNOLOGIES FOR THERMAL WASTE TREATMENT ...... 20 6.1 Overview of some thermal technologies ...... 21 6.2 Combustion technology ...... 25 7. ECOLOGICAL ASPECT ...... 30 7.1 Effects on the soil and water ...... 30 7.2 Noise ...... 31 7.3 Emissions of gases and dust ...... 31 7.4 IPPC Permit ...... 32 8. SOCIO-ECONOMIC AND A SOCIAL ASPECT ...... 33 8.1 Institutional, legal and political aspects in RS ...... 33 8.2 Implementation of the project to the environment ...... 34 8.3 Creation of new jobs ...... 34 9. FINANCIAL and ECONOMIC ANALYSIS ...... 35 9.1 Basic assumptions of financial analysis ...... 36 9.1.1 Maintenance and operating costs ...... 36 9.1.2 Projection of revenues ...... 38 9.1.3 Net present value and internal rate of return – financial analysis ...... 40 10. ECONOMIC COST-BENEFIT ANALYSIS ...... 41 10.1 Basic assumptions of financial analysis ...... 41 10.1.1 Maintainance and operating costs ...... 42 10.1.2 Incomes ...... 44 10.1.3 Net present value and internal rate of return – economical analysis ...... 47 10.2 Results of financial and economic analysis ...... 48 11. SENSITIVITY AND RISK ANALYSIS ...... 49 11.1 Sensitivity analysis (+/- 1%, +/-5%) ...... 49 11.2 Risk analysis ...... 49 12. COMPLETION ...... 51

1. INTRODUCTION

1.1 Short introduction

In the past, almost all residual municipal waste left after recycling and composting - has been landfilled untreated. The European Landfill Directive oblige now municipalities to reduce the biodegradable waste intended to be landfilled. Until recently, the main alternative to landfill which has been considered in the Europe is mass-burn incineration (WtE). Local authorities have started considering other options for dealing with residual waste, to produce alternative fuel RDF, to apply different kind of technology like fluidized bed combustion, pyrolysis and gasification technologies.

As the energy utilization of waste is not in the first priority in the pyramid of waste management basic attention has been put to the material use – recycling. Door-to-door waste collection system supports such a view in full scale. Energy utilization of waste remainings becomes an important part of whole waste management system. Locally available materials which can be used as a substitution for fossil fuels are on the other side also wery important. There is a possibility of producing larger amounts of standardized alternative fuel with a high calorific value, produced mainly from bulky waste as a result of sorting separated collection and adapted for the needs of a specific energy application. This can help saves on primary (fossil) fuels while disposing of a substantial part of waste with low expenses, positively influencing cost and volume of waste management.

Alternative fuels derived from waste (RDF or SRF) and novel thermal utilization processes like fluidized bed combustion, pyrolysis or gasification allow better and environment-friendly way of generating and utilization of waste energy. New technologies allow an efficient way of using waste and biomass energy for cogeneration to produce electricity and heat (CHP) especially for district heating. It enables using renewable energy sources and total utilization of waste material. New technologies enable an efficient protection of environment as it prevents harmful emissions with complex gas cleaning system. Final product like clean synthesis gas burns similarly to natural gas.

RDF/SRF consists largely of combustible components of municipal waste such as plastics and biodegradable waste. Use of RDF/SRF in industrial processes offers more flexibility than the simple direct incineration of waste. Its use permits to reduce the emission of CO2 since the plants can partially replace the use of fossil fuel. The communal value of the standardized fuel and its varieties is assured as well as their controlled chemical and physical characteristics (heating value 12-25 MJ/kg, moisture content <10%, ash residue <5%, appropriate physical characteristics, appropriate chemical characteristics, etc.).

1.2 Used abbreviations

MMW - mixed municipal waste SS - sewage sludge RDF - refused derived fuel MWh - extra light fuel oil LEA - local energy agency / Agency Service LEC - local energetic concept RES - renewed energy sources CHE - cogeneration of heat and electricity SORS - Statistical Office of the Republic of Slovenia

1.3 Definition of terms

Biomass: is biological material derived from living, or recently living organisms. It most often refers to plants or plant-based materials which are specifically called lignocellulosic biomass. As an energy source, biomass can either be used directly via combustion to produce heat, or indirectly after converting it to various forms of biofuel. Conversion of biomass to biofuel can be achieved by different methods which are broadly classified into: thermal, chemical, and biochemical methods. Wooden biomass: it includes forest residues (branches, canopy, trunk diameters of small and poor quality wood that is not suitable for industrial processing), residues in the industrial processing of wood (sawdust, slabs, bark, dust, etc.) and chemically untreated wood (products of agricultural activities in orchards and vineyards and already used wood and its products). Remote heating / cooling: the supply of heat / cold from the distribution networks which is used for heating / cooling spaces and preparation of warm sanitary water. Feasibility Study: is intended for examining the feasibility of energy supply projects or energy efficiency with technological, economic, environmental and financial point of view. We lower risk with high-quality investment documentation and enable investors and creditors to value different investment projects equally. RDF fuel: Through the process of mechanical biological treatment of waste, the waste can be treated in order to produce a high calorific fuel called RDF (refused derived fuel). RDF fuel is used in power stations, cement plants and other facilities, thermal treatment of waste and is today a substitute for traditional fossil fuels (coal, gas, fuel oil). RDF fuels are produced from plastics and biodegradable organic waste. Sludges: Treated sludge from wastewater treatment plants are solid waste (sewage sludge), as a result from the process of sewage treatment. Light fraction: is a part of mixed municipal waste that is larger than 80 mm. Heavy fraction: is a part of mixed municipal waste that is smaller than 80 mm. Separately collected fractions: is a part of mixed municipal waste that are collected separately on ecological islands in the sorting centres or before the "door" of households. 1.4 Technical basis for preparation of feasibility study

Technical basis for preparation of feasibility study is:

 THE LOCAL ENERGY CONCEPT OF THE MUNICIPALITY OF PTUJ, August 2012  PIZ UPGRADE REGIONAL CENTER FOR WASTE MANAGEMENT GAJKE, March 2010  JUNIPER REPORT, 2000. Pyrolysis˛Gasification of waste. Worldwide Technology˛ Business Review. Juniper Consultancy Services Ltd.

1.5 General information about the studied area / Municipality of Ptuj

General information about the Municipality of Ptuj:  23.693 inhabitants are living in Municipality of Ptuj.  9.987 households and 9.184 housings  Average number of household members is 2,3  Average size of housing is 75,78 m2  The municipality has 10 settlements, which are dispersed around the entire municipality  1437 housings are without central heating system

General information about the heating: Total energy consumption for the heating of users which are included in remote heating system in year 2010 for Municipality of Ptuj was:  Housing consumption - 10.652 MWh  Other consumption - 8396 MWh  Electric power consumption of power devices in heating stations was 291.345 kWh/a (1,5 % electric power of total heat consumption)  In year 2010 7.815 MWh of heat energy was produced from cogeneration device/plant.

General information about potential local energy sources for RDF:  5.000 tons of excess sludge from objects for wastewater treatment;  6.900 tons of light fraction  9300 tons of heavy fraction  6000 tons of separately collected fraction, which cannot be recycled or it cannot be sold on market.

2. IDENTIFICATION OF PROJECT OF ENERGY AND MATERIAL USE OF LOCAL ALTERNATIVE SOURCES

2.1 Aim of project

Project aim is to present the real mass and energy flow of local alternative energy sources as fundament for ensuring sustainable energy self-sufficiency of region and/or municipality.

2.2 Objectives of project

 To calculate based on real mass flows of local alternative fuel the total energy potential of alternative fuels that can replace fossil fuels for heating of households and industry.

 To show/present technologies and technology solutions, which with their reference facilities ensure obtaining of energy from alternative fuels for coproduction of heat and energy (SPTE).

 To show/present financial and economic efficiency of thermal processing of alternative fuels in region.

2.3 Transfer of study into practice (limitations and assumptions)

The study provides a basis for further study of possibility to use local alternative energy sources, based on data from Municipality of Ptuj and its surrounding area, which covers approximately 100.000 inhabitants Study assumes:

- that MBO waste processing unit operates in the region, - that the region collects waste separately, - that the region already has installed a heating system or wants to install one.

Further steps in the realization of the use of local alternative fuels as a source for thermal processing of waste are: 1. preparation of the necessary investment documentation (pre -investment study), as a justification of investment 2. preparation of an idea solution (basic engineering) 3. review of environmental guidelines 4. the decision about own investment (WITH or WITHOUT subsidy for initial/start investment) 5. preparation of investment documentation (pre-investment study with options) and examination of several possible variants 6. creation of design concept 7. creation of project idea 8. preparation of PVO 9. preparation of investment documentation (investment program) of investment programme 10. preparation of feasibility study 11. Application for EU funds or choice for PPP 12. Public call for selection of contractor 13. Montage/installation, trial operation and start 14. Operating permit

3. LOCATION OF PROJECT

3.1 Macro location of project

On the Slovenian territory, the region of Spodnje Podravje represents an area with common developmental issues on one side, and a number of developmental opportunities on the other. The realisation of the later to the advantage of the entire population within the region can be achieved best by constituting the entire area as a region, acting on behalf its own developmental strategy and programmes aimed at independently directing future development in the fields of economy, social life, culture, spatial planning and environment.

The area of the Spodnje Podravje region for waste management treatment extends over 19 municipalities, and they are: Cirkulane, Destrnik, Dornava, Gorišnica, Hajdina, Juršinci, Kidričevo, Majšperk, Markovci, Podlehnik, Mestna občina Ptuj, Sveti Andraž v Slovenskih goricah, Trnovska vas, Videm, Zavrč, Žetale, Duplek, Hoče-Slivnica, Šentilj.

The number of inhabitants in the region: 95.000

The Spodnje Podravje region is a relatively densely populated area mainly consisting of agricultural land, and includes the Haloze hills and some parts of the Slovenske gorice hills as well as the flatland Ptujsko polje along the river Drava and its tributaries.

In the north, the Spodnje Podravje region also includes the central and western part of the Slovenske gorice hills, extending from Krčevina pri Vurbergu over the river Pesnica through the municipality Sveti Andraž v Slovenskih goricah.

Haloze is a hilly area extending from the stream Jelovški potok near Makole at its western end along the Croatian border as far as Zavrč in the east. The eastern part is a winegrowing area with vineyards covering approximately one tenth of the land, whereas almost one half of the western part is covered with forests. The border runs through the Peklača valley.

Geologically, a large part of the flatland Ptujsko polje consists of river gravel, covered by a layer of fertile humus which makes the land perfect for agriculture. Some of the names of nearby villages still remind us that the entire area was once covered with forests – Bukovci (from Slovenian bukev, meaning beech), Borovci (from bor, meaning pine), Gajevci (from gaj, meaning grove) and Zagojiči (coming from za gajem for »behind the grove«). The hills and flatland form a mixed sedimentary area, consisting of sand, clay, gravel, sandstone, marl and limestone, while various geomorphologic processes have created different facies like steep hills, ridges, valleys and terraces.

3.2 Micro location of project

Ptuj is the oldest documented town in Slovenia and is situated in North-Eastern Slovenia, in the centre of Lower Podravje region at the border with Prlekija region.

 Area of town is 66,7 km2.  Altitude is 232 m.  Municipality includes 5533 house numbers in ten settlements.  There are 24,708 inhabitants living in Ptuj Municipality.

Area of city Ptuj was settled already in Late Stone Age, in antiquity Romans established fortress/town Poetovio. Medieval part of city Ptuj was developed by Castle Hill. Ptuj has an area of 66,7 km² and altitude of town is 232 m. It is located in north-eastern Slovenia (in the Pannonia). It is surrounded with Slovenske gorice, Haloze, Dravsko Polje and Ptujsko Polje. Settlements in Municipality of Ptuj are Grajena, Grajenščak, Kicar, Krčevina pri Vurberku, Mestni Vrh, Pacinje, Podvinci, Ptuj, Spodnji Velovlek and Spuhlja. Municipality is divided into 8 district communities: DC Center, DC Breg-Turnišče, DC Ljudski Vrt, DC Jezero, DC Panorama, DC Rogoznica, DC Grajena and DC Spuhlja.

Municipality of Ptuj is located in north-eastern part of Slovenia. It borders with following municipalities: 1) on north: municipalities Duplek and Destrnik 2) on east: municipalities Juršinci and Dornava, 3) on south: municipalities Markovci and Videm 4) on west: municipalities Hajdina and Starše.

Picture 1: Municipality of Ptuj (Source: http://geoprostor.net, 2014).

According to recent statistics, the number of inhabitants in the first half of 2011 was 23.693. Based on this info we can conclude that the number has not changed much in the last 10 years (2000-11).

Waste For lower Podravje municipalities the construction of the regional waste management plant Gajke (CERO Gajke) represents complex solution of the municipal waste management, which completely meets the Slovenian and EU rules in force in the fields of environment protection and human health. Centre includes reception of waste, waste treatment and recovery, and disposal of waste residue.

Important information about CERO Gajke:

 includes 19 municipalities with 95,000 inhabitants,  centre capacity is foreseen for 100,000 inhabitants,  operational life of the landfill site is 15 years,  centre’s area extends over 18 ha, of which 12 ha is landfill area.

Water supply system Water supply system Ptuj, the second largest regional water distribution system in the Drava river basin, provides water supply for the territory of 21 municipalities. Quality of underground water in Dravsko and Ptujsko polje is threatened by unrefined wastewater discharges from settlements of Ptujsko and Dravsko polje, intensive farming and industry. Priority water management task is to supply population with quality drinking water.

Picture 2: Location for CHP plant (P11-P4/1). 4. LOCAL SOURCES IN THE AREA

4.1 Renewable and alternative fuels in the local area

Alternative and renewable fuels from local/regional sources consist mainly of waste derived fuels and virgin biomass. Waste derived fuels, in this study, are from door-to-door system where very high level of waste separation can be achieved. Waste is collected directly from households (biological fraction, plastics and package materials, residual waste and optionally paper in some cases), from street collection (glass and paper) and from collection in special centres (bulk waste materials, waste electronic equipment, dangerous waste, construction waste, special waste and other). With such a highly specialized system high level of separation and rather high level of purity of fractions can be achieved. Diagram of such a typical waste collection system is presented later in chapter of mass balance. In the preparation of alternative fuels like SRF/RDF some of the residual fractions from other streams are used. Another important part ow waste stream comes from cleaning of sewage water. Sewage sludge is here, in this study, used as an integral part of renewable (alternative, low calorific value) fuel locally available. Sewage sludge needs to be dewatered by centrifuging or filtration to reach at least 30% of dry solid matter in end product which is used as imput for the processing of the alternative fuel.

4.2 The use of sludge from wastewater treatment plants in combination as an alternative fuel

Removal of settle able solids from raw water in the primary treatment (primary sludge) and settle able substances that are produced with biological conversion of the dissolved substance in the bacterial cells in the secondary treatment (secondary sludge), constantly produce large quantities of concentrated sludge. While a liquid fraction of the waste water could be purified and safely discharged into the surface water, the accumulated sludge needs further processing before disposal.

The sludge contains various components, depending on the composition and the method of processing waste water. The composition of the sludge is presented in the following table.

Table: Type and composition of the sludge Type of sludge Characteristics Raw sludge rotting, contains 1-12% solids Primary sludge contains volatile suspended solids, from 8.2 to 10.7% undigested sludge Secondary sludge light fluffy material, consisting of bacteria, protozoa, and contains about 1% solids

One of the more expensive processes for the removal of sewage sludge / sludge from biological wastewater treatment plant is an incineration. Main problem at incineration of waste sludge presents mainly water so we have to prepare sludge for the incineration on the way that it contains at least 25 and 30% solids. This can be achieved by centrifuge or filter presses. Cake / sludge (partly dehydrated sludge) can already be used as a starting raw material for the production of alternative fuels. High water content (70% or more) reduces caloric value a lot so therefore it is appropriate to provide additional drying of the sludge (or composting) with waste heat. Thus prepared slurry can then be entered into a fluidised bed incinerator (fluidized) layer and burned at a temperature of at least 850 degrees Celsius. Silt/ mud cannot be incinerated itself because of low calorific value but only in combination with other fuels (co- incineration) for sufficiently large input of energy in the incinerator.

The main objective of the incineration of sewage sludge is reduction and removal of the available quantities of sludge. It is noted that this is a "last chance" right where the mud is contaminated with heavy metals and cannot be successfully processed by other methods (like composting or processing in construction materials).

The main advantage of the combustion is a total destruction of organic substances while ash is inert and can be disposed at landfills for non-hazardous waste.

There are two types of furnace (incinerator); multi-stage incinerator (incinerator) and incineration plants with floating (fluidized) layer. Each has its advantages and disadvantages, but for high combustion efficiency and the avoidance of unpleasant odours is the fluidized bed incinerator much more useful.

4.3 Use of municipality waste as SRF/RDF fuel

Refuse-derived fuel (RDF) or solid recovered fuel/ specified recovered fuel (SRF) is a fuel produced by processing of the municipality solid waste (MSW) or rest waste from door-to-door collection systems. RDF consists largely of combustible components of municipal waste such as pieces of plastics, pieces of papers and smaller part of other biodegradable waste. RDF processing facilities are normally located near a source of MSW and processing facility. The material is treated in respect of the European Law Regulation and Guidelines, but also to satisfy the end – user’s specific requirements.

SRF/RDF can be used in a variety of ways as a substitute for fuel. It can be used alongside traditional sources of fuel in coal power plants. In Europe RDF can be used in the cement kiln industry, where the strict standards of the Waste Incineration Directive are met. RDF can also be fed into plasma arc gasification modules, pyrolysis plants and where the RDF is capable of being combusted cleanly or in compliance with the Kyoto Protocol, RDF can provide a funding source where unused carbon credits are sold on the open market via a carbon exchange. RDF product can be used for energy recovery and it is generally used in different thermal conversion processes: - Co-combustion in coal fired boilers, - Co-incineration in cement kilns, - Co-incineration in special multifuel boilers with flue gas cleaning system, - Co-gasification with coal or biomass and other.

The use of RDF has the following advantages:

 A possibility to manage and valorize municipal waste is a valid alternative to dumping and landfill. Statistical data report that EU Countries still dump around 233Kg per person of municipal refusals.  Use of RDF in industrial processes offers more flexibility than the simple incineration of waste. Its use permits to reduce the emission of CO2 since the plants can partially replace the use of fossil fuel.  High Quality RDF has a content of around 50% of not “virgin” biomass.  According to the national environment policies, the use of RDF permits to obtain a tradable commodity as white and green certificates. These certificates respectively prove that a specified amount of energy saving has been achieved and that certain electricity is generated using renewable energy sources.

Distinction between RDF and SFR fuel is mainly in its quality; SRF fuels need to be prepared according to standard CEN/343 ANAS and should meet their prescribed properties. OVERVIEW OF THE PRODUCTION PROCESS

In the first stage, non-combustible and heavy materials such as glass, metals, stones and other materials are removed with an air knife or other mechanical separation processing. In the next stage heavy and light fraction is separated by means of sieving process. Heavy fraction need to be first biologically stabilised, dried and separated from metallic and ather heavy materials prior entering the mill. Mill cut pieces of the plastics to the dimensions able for transport. Light fraction of the waste material is also separated from metallic and nonmetalic hevy materilas (stones, glass, etc.) by different type of separators, typically air separation is applied. Relative pure material is finally milled to proper size or dimensional specification according to the normative CEN/343 ANAS. The finality of the plant is to stabilize and hygiene the output and to eliminate the residual moisture < 25% or < 18% according to CEN/343 ANAS.

The material is added and mixed then (Blending process) with components with elevate calorific value with the purpose to reach the energetic level required by the end user. These refusals are industrial discards that have constant and precise energetic characteristics notes. Once the product is ready, the material is then packed in bales in order to optimize its handling and storage. Material need to be constantly analyzed by authorized laboratories that certify that the waste is a special and not dangerous or harmful waste. This is why the material is classified with the CER Code 19 12 10. To this class belong all the wastes that contain mixed material: this refusal is obtained from the mechanical treatment of wastes, not containing dangerous substances (like in CER Code: 19 12 11); The composition of RDF from MSW will vary according to the origin of waste material and the sorting/separation process. This will influence the properties of RDF such as its calorific value. Typical composition for RDF from MSW origin is presented in Table 1 following here below:

Table. Recovered from EUROPEAN COMMISSION – Report no. B4-3040/2000/306517/MAR/E3) Flemish Region Italy UK Mechanical Sorting Waste fraction biological % % Process treatment Plastic 31 9 23 11 Paper/cardboard 13 64 44 84 Wood 12 4,5 Textile 14 25 12 Others 30 14 5 Undesirable material 2 2,5 (glass, stone, metal) Dry-solid content 66 85

Overwiev of the different waste materials processed as alternative fuel – SRF. 5. MASS AND ENERGY BALANCE

General mass and energy balance of the materials has been prepared on a basis of door-to- door MSW collection system. A support to such a collection system is realized by some collection island and collection centre where member of the system can deliver any type of sorted waste or hazardious materials. This approach enables citizens and same companies to dispose all waste or unvanted materials. Concrete case is prepared as an example based on approx. 100.000 population in half urban (suburban) and urban area (in whole, not total urban area). Case express typical example and can be in any other feasibility study changed or expanded to any other real case. There are differencis, ofcourse in the structure and type of companies in the region. Many separately collected materials come directly to regional centre for waste processing and many fractions from huseholds and companies are prior to processing combined. From this point of view differencies in waste structure can be substantial. Energy balance at the end come form mass balance multiplied by calorific value (CV) of the each fraction separated and mainly from its water and ash content. Again, differencies can come also from calorific values of the components derived from waste and become at the end part of the SRF fuel.

5.2 Basic diagram of the collection system and mass flow

WASTE COLLECTION door-to-door SYSTEM 41.500 t / y SEVAGE SLUDGE 10.000 t / y

Collection of Residual waste Biological household Green cuttings separated waste MSW - rest waste and prunings fractions 21.500 t separately collected 6.000t 11.500 t 2.500t

Waste Waste Dangerous Waste Large bulk Kitchen Waste dehidration electronic plastics, Waste Waste Waste waste EQ. constr.mat. pieces emballage wood metalls glass waste paper

Aerobic stabilization Mechanical FROM SEPARATED COLL. FRACTIONS SCF : SRF: 6.000 t, TO MARKET: 4.600 t, to landfill: 950 t separation 5.500t

Heavy fraction Aerobic Rest of concession 12.500t stabilization stabilization Lihgt fraction 9.000t 6.000t Magnetic and Additional 6.900t non magnetic separation separation

Air Magnetic and non separation drying magnetic separation

SUM OF FRACTIONS SRF: - LF = 6.900 t MILL - HF= 9.300 t 950t 4.600t - SCF= 6.000 t TOTAL: 22.200 t MILL Secondary t

0 fuel LF+LZF 0 0 . 5 MARKET 9.300 t HF Secondary fuel To landfill For materials Thermal HF tretment 3.025 t and products Heat …. (thermal energy)

Rest electricity (ash and char)

Waste collection system is based on door-to-door system, collection islands and collection centres for special selected fractions in the region. Industrial waste is partly connected to the system where separated waste is delivered directly to the processing centre. Biological waste from industry is included only as »non industrial« household/office type of waste/biowaste. Industrial waste, like hazardious bio waste and animal residues (cadavers and like from farms and sloughter houses) are collected and processed in separate company. Mass flow of this part is not a part of waste mass flow presented in the model.

5.3 Waste biomass

In presented waste collection system biomass consists mainly of two sources. First one is bio waste separate fraction collected from household and companies. Second one is pure biomass collected at collection centre and consists of grass cutting and prunings. This part is weery seasonal dependent material regarding quantities and quality.

Bio waste from households Boiomas from households present a problematic part of biomass because need to be sanitized, stabilized and dried (high content of water). This process is conducted mainly by composting. Amount of this part of biomass is find out to be around 2.500 t/year with tendency of diminishing (because of home composting is rising) in presented model of collection.

Pure biomass As the material consists mostly of fresh (high water content) and large sizes (branches) material it is usually collected in piles. Material is unstable and biologically active and need to be milled and stabilized. Stabilization in almost all cases consists of composting process. Compost coming from the process of stabilization is finally separated and can be sold directly in the market as option. In presented case most of the material is after stabilising and drying used as a component of alternative fuel. Amount of this part of biomass is rather stable with even slight tendency of rising. In the presented model is assessed to be around 6.000 t/y.

5.4 Sewage sludge from sewage water cleaning process

As more and more households and all industry are connected with ordinary sewage water to central cleaning plant amount of waste sewage sludge (SS) is rising. In the region presented here the amount of sludge is assessed to be around 10.000 t /y with dry solid content of about 30% and ash content of 33%. Sludge is usually dehydrated to about 30 % of solid content (70% of water) and like this delivered to further application. Calorific value (LCV) of the final mixture is very sensitive to the water content as is presented in the diagram below. In the presented case is assumed that SS is dried to 5000 t/y of mixture with still 40% of water and LCV of about 7 MJ/kg. To reach such a number of calorific value will be quite beneficial for the thermal process applied.

5.5 RDF/SRF fuel

SRF fuel is prepared according to the presented diagram (ch. 5.1) from the light fraction (6,900 t/y) and from separately collected fraction (as a rest of reciclation 6,000 t/y) and from heavy fractions (9,300 t/y) all together 22,200 t/y of this fuel is available in presented regional system of municipality (and partly industrial) waste collection.

5.6 Total potential of the region for generating alternative fuels

Total potential of the region to generate sources of alternative fuel is assessed to be around 22,200 t/y and additional 5,000 t/y of (60% dried) sludge can be applied. Calculation of total energy available from 27,200 t/y, their calorific values (13MJ/kg in average) and time of operation (5000 h/y) give a total power of the plant needed. The thermal capacity of the plant should be 20MW exactly. Such a capacity is not small in terms of district heating and is small in term of waste thermal treating. From the local point of wiev such a capacity could provide heating to about 3000 households ( 4 people per household means 12,000 people) what is only a smaller fraction of citizens (assumed 100,000 people in the region) living in the region.

6. TECHNOLOGIES FOR THERMAL WASTE TREATMENT

There are basically available three types of thermal technologies: - combustion as classical technology, - gasification and - pyrolysis technology.

The capacity of thermal plants for municipal waste can range from 100,000 tonnes per annum (tpa or tonnes per year - t/y) to large scale facilities of 600,000 tpa.

Today, the most common and rather well developed technology, with a lot of references is combustion technology. Problem of such a technology is type of combustion equipment used. Most common is mowing grid technology where multifuel use is always in question. Next problems are the efficiency of the energy utilization and the maturity of the technology. Some newer concept of combustion like fluidized bed combustion (FB) and relative attractive prices can be also some advantages. With the combustion we could have a cogeneration (steam turbine – Rankine cycle) or ORC types or even both to get some electricity and heat as final products. Combustion processes with cogeneration are the most common in Europe. Gasification is rather old technology but enough not massive used. Commercial technologies are still in development and demonstration phase for some specific type of fuel. Prices and capacities are still developing but the perspective of the technology as a source of syngas is rather bright. Some new facilities are built around EU to utilize more biomass also together with alternative fuels. Process of gasification produces basically synthetic gas which can be burned in gas motor or gas turbine to produce electricity.

Some pyrolysis plants are operating around EU where fuel is thermically transformed to char (solid product), liquid and gaseous products. All products are used for cogeneration of electricity and heat. Pyrolysis plants are not so common in EU it is one option but the technology is not developing fast.

Picture 3:. Thermal conversion process and products

Picture 4:. Advanced Thermal Technologies

6.1 Overview of some thermal technologies

Fluidised bed gasification for thermal process of waste management

Fluidisation is the term applied to the process whereby a fixed bed of fine solids, typically silica sand, is transformed into a liquid-like state by contact with an upward flowing gas (gasification agent). Fluidised bed gasification was originally developed to solve the operational problems of fixed bed gasification related to feedstocks with a high ash content and, principally, to increase the capacity and efficiency of the thermal process.

Conventional updraft and downdraft gasifiers are able to produce syngas with calorific value up to 8 MJ/Nm3 (only with use of pure oxygen). Here we are presenting one of (only a few) available commercial technology as a possible case for thermal utilization of alternative fuels prepared from MSW.

The process occurs in fluid bed of hot catalytic material in presence of steam. Process has a few advantages of which the highest is catalytic fluidized bed gasification/combustion. Different fuels made of solid waste with moisture up to 30% and wide size distribution of particles can be energetically utilized.

Technical characteristics of possible plants: Thermal power: 0.7 – 25 MW Electricity production: 0.25 – 4 MWe Annual operation: > 8000 h Total efficiency: 75-80 % Boiler efficiency: up to 95% Fuel: Biomass, municipal solid waste (MSW), SRF Fuel size: Wide size distribution of particles Type: FICFB or CFBC Fuel moisture: < 30% Fuel calorific value: > 4.0 MJ/kg

Basic idea of catalytic steam gasifying process is to divide of gasifying and combustion zone. Between these two zones a circulation loop of bed material is created but the gases should remain separated. The circulating bed material has actually two main functions. It acts as heat carrier from the combustion to the gasification zone and it allows gasification process to take course at lower temperatures (amount of emissions is significantly lower than without of use of catalytic material).The fuel is fed into the gasification zone and gasified with superheated steam or air (min. 500°C) at temperature 700-800°C. The bed material, together with some charcoal, circulates to the combustion zone. This zone is fluidized with hot air (min. 500°C) and the charcoal is fully burned.

The exothermic reaction in the combustion zone provides the energy for the endothermic gasification with steam. Some portion of produced syngas is injected to the combustion zone to maintain constant temperature of max. 1100°C Therefore the bed material at the exit of the combustion zone has a higher temperature than at the entrance. The flue gas will be removed in cyclone without coming in contact with the product gas. With this concept it is possible to get a high-grade product gas without use of pure oxygen. This process can be realized with two fluidized beds connected with transport lines or with an internally circulating fluidized bed.

Gases are submitted to the cleaning processes which take place in cleaning lines behind the reactor and combustion zone. Selection of cleaning equipment highly depends of type of fuel used for energy utilization (amount of nitrogen, sulphur and chloride in fuel have high role in design of cleaning lines and catalyst selection).

The best and most reliable way to produce heat and power is with conventional steam process. Hot raw syngas combusts in steam boiler producing high pressure steam for its usage in steam turbines. We can also heat thermal oil for ORC process but since we can produce high temperature energy ORC is usually secondary solution.

The thermal gasification of biomass - especially with water vapor as gasification agent - is considered a key technology for future energy systems and biorefineries.

Heat exchanger Optional ORC

Optional Steam turbine Optional

Heat Generator exchanger ORC

Combustor/steam boiler Municipal Bag solid filter waste Hot Raw Auxiliary Granulator syngas burner ash Cyclone Auxiliary fuel CFB Gasifier Cyclone ash Screw conveyor

ash ash

Superheated steam/ air Heat exchanger Flue gas

Chimney

Flue gas

OptiGas® - air/steam blown gasifier with gas turbine

Only gasification allows converting solid biomass to reach high efficiency in combined heat and power generation in the decentralized sector. Due to this principle OptiGas® technology has been developed and tested to be ready for market entry.

Gasification features  Fluidized bed gasifier: The biomass to be gasified is brought into a bubbling fluidized bed with very homogenous reaction conditions.  Water vapour as gasification agent: Instead of air (auto thermal gasifier) a mixture of air and steam is used as gasification agent this provides an optimum quality of the produced gas.

OptiGas - efficient and flexible OptiGas is a water vapour gasifier with fluidized bed technology connected to a gas turbine to produce combined heat and power. It is charged with biomass (e.g. wood chips) or waste material (e.g. dried sewage sludge). This combination of gasifier with a gas turbine - i.e. "a solid fuel fired gas turbine" - enables electrical efficiencies of power generation with biomass up to now not realized.

Increase of Efficiency The direct coupling of the OptiGas gasifier with the gas turbine is increasing the overall efficiency (from the fuel to the generator) considerably. With this it is possible for the first time to convert biomass into electric power with efficiency up to now only achievable with natural gas.

OptiGas - applications and product strategy The thermal gasification of biomass - especially with water vapour as gasification agent - is considered a key technology for future energy systems and biorefineries. OptiGas enables the provision of popular products from biomass currently in demand, such as  power and heat production by means of cogeneration  provision of storable energy carriers, e.g. hydrogen  conversion of the gas to substitute natural gas (SNG) or synthetic fuels (BTL - biomass to liquid)

The wide range of feedstocks for gasification and the various possibilities for the transformation steps results in a multitude of applications and products.

6.2 Combustion technology

FLUIDISED BED COMBUSTORS Technology known for most of this century Rapid developments during 1970's Today well established and proven process for energy conversion Technology has been applied to:  coal (worldwide),  biomass (Scandinavia and Canada),  MSW/RDF (Japan, USA and Europe).

FLUIDISED BED COMBUSTORS around the world:

FLUIDISED BED COMBUSTORS Characteristics:

 Rapid mixing of solids creates isothermal conditions throughout the reactor.  Thermal flywheel effect limits temperature variations.  Minimisation of "hot spots" when combusting high CV materials.  Heat and mass transfer between gas and solids is very high.  Rate of heat transfer between a FB and an immersed object is high causing solid waste particles to combust and oxidise rapidly.  In-situ removal of acid gases by addition of limestone.  Reduced corrosion risk allows for higher steam temperatures giving increased thermal efficiency.  Typical operating temperature creates low level of NOx.

FLUIDISED BED COMBUSTORS ADVANTAGES

FB's are proven in applications of: - pure MSW streams and - variable mixtures of solid wastes and fuels (multifuel plant).

More than 150 bubbling FB's are operating on MSW worldwide. Flexibility of waste switching can handle low CV and high CV fuels. In-bed scrubbing reduces acid gas loading Can handle high moisture and high ash fuels, can respond very well to rapid load changes, can 'turndown' to 25% of normal capacity.

Fluidized bed combustion system A fluidized bed is an ideal method for the combustion of diverse and challenging solid fuels.

Steam generator is an important step towards the perfection of combustion technology for solid, wet and muddy biogenic waste. For heat ballance reasons the bubbling bed combustion chamber is integrated in a high pressure steam generator.

Features

 Fuels with an ample bandwidth: fragmented size, heating value, moisture and dust content  Suitable for fuels with low ash melting point  Resistant to clogging due to open nozzle grid; continuous cleaning during operation  High efficiency due to outstanding heat transfer in the freeboard and combustion control for low exess air  Automatic operation, even during fuel-change  Operating hours a year: >8000 h

Working areas • Fuel input: 2 - 100 MW • Heating value: 4 - 18 MJ / kg • Steam parameter: up to 120 bar, 520° C Operational areas Unique feature of the combustion chamber (sand bed with a high heat-capacity), together with a well-directed designed freeboard and an adequate management of the air for combustion, provides CHP plant the possibility of a wide range of operation.

OptiCOM fuel flexibility

WOOD DUST WASTE PLASTICS

WOOD BIOMASS WASTE WOOD chips Painted and chip-

bord particles

e u

l Animal

a dung v

SEWAGE SLUDGE

a C ASH melting point /corrosion

One of the advantages of the CHP fluidized bed combustion system is its vast combustion flexibility of multi fuels. The diagram shows the fuels which have been used until now and their calorific values. As the ash softening temperature decreases towards the right, there will be a greater risk of corrosion in the combustion chamber. Technology is capable of burning fuels with low calorific value and with low levels of ash softening.

Customer-specific plant design

a C

S W P S W F p a p a u e o p e s l c o e c t l ia d r i e p ra l i i a m r n i n n l o g n d d in a j e d u u d te . . s s . r tr tr ia y y ls

CHP plants allow a wide spectrum of fuels; the operational characteristic can be adopted to the customers needs.

Typical emissions CHP boilers fully comply with the emission standards of the European Union. The measured values are even undercut considerably (below alowable standards). Emissions (at 11%O2) - CO < 50 mg/Nm³ - NOx < 200 mg/Nm³ - TOC < 10 mg/Nm³

Combustion control

For industrial power plants, which burns production waste together with other fuels, the combustion zone has to be designed carefully regarding the bandwidth of the heating values of the combustible materials, to avoid restrictions in profitability in the future. The potential of the variability of the endzone of the freeboard in CHP Plants can only be used an air management control system.

Features • Optimized combustion management. • Control of freeboard temperatures (to avoid contamination by softening of the ashes). • Minimum losses by flue gas. • Good part load performance. • Dynamic combustion chamber adjustment.

CHP plant guarantees a totally automatic management of combustion, even during fuel changes. This enables: • Excellent emission levels due to complete burnout. • High efficiency of the boiler, due to the minimization of excess air. • Prevention of ash deposition on heat surfaces through temperature limitation in the freeboard.

Planning of some assitance for potential users, questions to think about: - Waste is generated during the production stage and should be used for energy production (steam for the process, electrical energy). - You would like to decrease production costs using less expensive energy costs. - The existing process steam production is not profitable because of the following reasons: - expensive fuel costs, - frequent shut down of the power plant for cleaning the heating surfaces, - high waste disposal costs for production residues - You intend to burn material, which you did not use as fuel up to now. - You have available waste (for example: used wood, municipal vegetation, substitution fuels, severage sludge) and you like to use it for energy production. - You want to increase the use of renewable energies. - You have to supply heat and electric power to an enclave-region. - The sewage sludge treatment costs are extremely high.

7. ECOLOGICAL ASPECT

Waste and handling is an important environmental issue. Thermal treatment of waste, is being watched as a response to environmental hazards caused by poorly regulated or unregulated waste streams. Waste in the recycling and recovery procedures are processed in alternative fuels (SRF) that can be safely used in devices for thermal processing- cogeneration, where it produces heat and electricity at the same time. It should be noted that the very principle of cogeneration produces fewer emissions, and has Mans carbon footprint. The aim of heat treatment is to reduce the overall impact on the environment which could otherwise cause waste. In the process of thermal processing of waste environmentally harmful compounds are generated, which are part of the process - gas cleaning completely decomposed or separated from the flue gas, in this way the emissions equipment for thermal processing are extremely low. Thermal plants are otherwise subject to stringent regulations on emissions that give rise to and usually publish information on emissions into the environment on the websites. This allows each resident for daily scans and follows the operation of the plant. Transparency of operation is a key requirement of credibility (people trust them) of the operation of such plant in a certain environment.

Possible effects of thermal processing equipment for the alternative fuels fall into the following main categories: • total emissions from the process in air and water (including odour), • formation of residues in the process (ash, slag, sludge), • noise and vibration, • consumption and production of energy, • consumption of raw materials, • fugitive emissions - mainly from waste storage, • reduction of the storage and processing of hazardous waste and handling.

Application and enforcement of modern emission standards and the use of modern technological processes for pollution control have reduced air emissions to a level at which the risk of pollution caused by plants for thermal processing alternative fuels are generally regarded as very low.

7.1 Effects on the soil and water

Implementation of the project may not cause deterioration in the quality of soil, groundwater and drinking water sources in this area. Clean rainwater is discharged into the ground via a large covered sink, rainwater from paved surfaces are deposited into the collection tank and through wastewater treatment plants discharging into the local sewer system.

Emissions of particulate matter in the air: Such emissions pose a major threat to the impact on soil pollution in the area. Permitted emission standards are very high and this allowed emissions are very low. Each unit is equipped with measuring instruments for the continuous monitoring of emissions in order to achieve a high level of control and transparency.

Surface water: Impact on surface water due to discharge purified water from the treatment plant is eliminated, since all streams of waste water (as in any industrial facility) have to clean up the local permissible limits for discharges into the city sewers. Municipal sewage system has a biological treatment plant, which ensures that the final releases to surface waters within the limits permitted.

Groundwater: Influence of thermal processing plants in the ground water (groundwater) shall not be void. So it shouldn’t show prejudice! Water from all surfaces must be covered, cleaned and discharged to the sewer system. Direct Infiltration systems are not allowed, so a direct impact on groundwater can not be detected. The only impact could be through the emission of particulate matter from the flue gas, which is strictly controlled by the release of smoke.

7.2 Noise

Loads of noise is prescribed by the Regulation on limit values of noise indicators in the environment (Official Gazette of RS, no. 105/2005). Operation of the facility for thermal processing shall be in accordance with this Regulation. Values of noise indicator are all the time, during the operation, below the limit values. Technology that enables operation of the plant has facilities that could cause pronounced noise. The greatest attention is on the fans that drive the cleaning and filtering devices that do not cause noise emissions.

7.3 Emissions of gases and dust

Device for thermally processing alternative fuel RDF / SRF is designed, equipped, built and operated so that emissions under normal operating conditions, can never exceed the maximum permissible levels (in the flue - gas discharge): • SO2 between 200 to 850 mg/m3. • NO2 between 200-400 mg/Nm3. • CO 50 mg/m3. • 30-50 mg/m3 total dust. • TOC 10 mg/m3. • HCl 10 mg/m3. • HF 1 mg/m3. • Cd + Tl 0.05 mg/m3. • Hg 0.05 mg/m3. • Sb, As, Pb, Cr, Co, Cu, Mn, Ni, V 0.5 mg/m3. • Dioxins and furans 0,1 ng/m3.

The project does not cause excessive environmental pollution emission of electromagnetic radiation because there won’t be significant sources of radiation at the site nor will it not be a major source of light pollution, vibration or thermal pollution.

The project will not have a significant effect on the landscape, but will have a little impact on the visual quality of the environment. Implementation of the project will have no impact on cultural heritage; without prejudice to the area of cultural heritage protection.

The project implementation will also not affect the plants and protected natural areas.

7.4 IPPC Permit

Industrial plants have to adjust their environmental functioning of the international and European guidelines and commitments. As part of the waste management area also includes:

• devices for thermal processing and incineration of alternative fuels from waste.

Environmental Protection Act and the IPPC regulation were introduced in the environmental or RS so called IPPC permit, which must now obtain the operators of installations that may cause pollution of a major from the following activities:

Type of activity The production capacity of the facility in a particular industry Co-incineration of municipal waste, as With a capacity exceeding 3 tonnes per hour. defined in the regulations governing the scope of incineration, incineration and co- incineration of waste and wastewater discharges and emissions from the incineration and co-incineration.

The proposed solution comprises a capacity of more than 5 tonnes per hour, which means obtaining an IPPC permit.

8. SOCIO-ECONOMIC AND A SOCIAL ASPECT

8.1 Institutional, legal and political aspects in RS

In the preparation of all necessary documentation to present the project and making further investment documentation project should be considered authoritative European legislation, Slovenian and EU legislation municipalities to be included in the project:  Environmental Protection Act (EPA-1) (Official Gazette of RS, no. 41/04, 17/06, 20/06, 39/06), changes in Ur. L. RS, no. 70/2008 - EPA - 1B;  The Local Government Act;  Law on Public Utilities;  Resolution on National Environmental Action Plan 2005-2012 (NEAP Re) (Official Gazette of RS, no. 2/06);  Decree on the landfill of waste (Official Gazette of RS, no. 32/06, 98/07, 62/08, 53/2009);  Ordinance on Waste Management (Official Gazette of RS, no. 34/08);  Regulation on Soil Pollution Caused by inputting waste (Official Gazette of RS, no. 34/08);  Rules on the incineration of waste (Official Gazette of RS, no. 32/00, 53/01, 81/02), changes in Official Gazette RS, no. 41/2009;  Decree on the provision of mandatory public service incineration of municipal waste (Official Gazette of RS No. 123/04, 106/05);  Regulation on the implementation of Regulation (EC) No. 1013/2006 on shipments of waste (Official Gazette of RS, no. 71/07);  Decree on environmental tax for pollution caused by the disposal of waste (Official Gazette of RS, no. 129/04, 68/05, 28/06, 132/06, 71/07, 36/2008 Skl.US: UI-28/08 -9, 85/2008);  Action Plan to reduce greenhouse gas emissions by 2012 (Government Decision no. 35405-3/2006/5 of 20.12.2006);  Decree on the landfill of waste (Official Gazette of RS, no. 32/06 and 98/07), changes in Official Gazette RS, no. 62/2008, 53/2009;  Decree on activities and devices that can cause large-scale environmental pollution (Official Gazette of RS, no. 97/04 of 3 9 2004);  Decree amending the Decree on activities and installations which may cause large- scale environmental pollution (Official Gazette of RS, no. 71/07 dated 7 8 2007);  Regulation amending Regulation on activities and devices that can cause large-scale environmental pollution (Official Gazette of RS, no. 122/07 dated 28 12 2007);  Decree on Amending the Decree on activities and devices that can cause large-scale environmental pollution (Official Gazette of RS, no. 68/12 of 7 9 2012);  Directive 96/61/EC (IPPC Directive -'' Integrated Pollution Prevention and Control'').

8.2 Implementation of the project to the environment

No:. Activity

1 Planning information 2 Requesting an opinion on the possibility of inclusion in the network 3 Location suitability analysis 4 Concept, preliminary design and feasibility study 5 Decision to construct 6 Energy permit 7 Specific permits »IPPC« 8 Building permit 9 Professional training for the operation 10 Execution project 11 Construction of the production unit 12 Construction of the el. connection 13 Construction of the heat connection 14 Project for implemented work and operating instructions 15 Technical examination/inspection 16 Operating permit

8.3 Creation of new jobs

In the thermal processing of waste sized of the total power of 20 MW 16 new jobs could be created. Table 7: Display of new possible jobs Cost center Job describtion No. of job positions General Leader of the entire 1 plant Technical part Operator 2 Maintainer 3 Employees 10

Total 16

9. FINANCIAL and ECONOMIC ANALYSIS

a. Indication of the basis for the evaluation

Basis for valuing the investment significance is estimated on similar implemented projects and on the average market price for this kind of participations. Investment costs are presented as expenditures and contributions in cash and in things that are directly related to the investment project. The investor all the aforesaid use for obtaining documentation, approvals and permits, for preparatory and earth- moving works, building works, craft trades, installations, the purchase and setting up of equipment and devices.

Exact outlays and official prices will be displayed in subsequent documents of investment documentation.

In the following is the total investment value for the implementation of the project, which is intended to build. The total investment value is estimated at EUR excluding VAT.

b. Rating investment costs by fix prices

Table: Investment value by fix price (in EUR)

TYPE OF WORK PROJECT COSTS Basic engineering and project 1 cost 800.000,00 2 Buildings 3.500.000,00 3 Equipment and installations 17.000.000,00 4 Contingencies 500.000,00 TOTAL excluding VAT 21.800.000,00 VAT 0,00

TOTAL 21.800.000,00

The total value of the investment at constant prices is 21.800.000, 00 EUR.

c. Rating investment costs by real prices

Given that the planned dynamic of investment exceeds one year, it is necessary to demonstrate the value of the investment at current prices. We consider increases with average inflation rates, which have been considered in the macroeconomic scenario and the starting point in the preparation of the budget of the Republic of Slovenia for the year 2014. At the recalculating/conversion the value of the investment at current prices, we considered the following assumptions: • Average inflation for 2014 of 1.0% on an annual basis.

Table: Investment value by real price (in EUR)

TYPE OF WORK PROJECT COSTS Basic engineering and project 1 cost 808.720,00 2 Buildings 3.534.880,00 3 Equipment and installations 17.170.040,00 4 Contingencies 504.360,00 TOTAL excluding VAT 22.018.000,00 VAT 0,00

TOTAL 22.018.000,00

The total value of the investment at constant prices with VAT is 22.018.000, 00 EUR.

9.1 Basic assumptions of financial analysis

Preliminary, we present assumptions for an analysis: o We used the constant prices, o Reference period is 30 years, o Financial discount rate is 7%, o The first full year of regular operation of entire center – year 2015, o The trial operation in the year 2014, o In the analysis we included operating costs, operating costs, capital costs, labour costs and costs of disposal.

9.1.1 Maintenance and operating costs

Table: Maintenance – investment part

MAINTAINANCE - investment part TOTAL

Hardware Electrical YEAR/COSTS Equipment installations installations Trial operation additional 1 2014 1.200.000 1.200.000 2 2015 457.800 70.000 35.000 43.600 606.400 3 2016 462.378 70.700 35.350 44.036 612.464 4 2017 467.002 71.407 35.704 44.476 618.589 5 2018 471.672 72.121 36.061 44.921 624.775 6 2019 476.389 72.842 36.421 45.370 631.022 7 2020 481.152 73.571 36.785 45.824 637.332 8 2021 485.964 74.306 37.153 46.282 643.706 9 2022 490.824 75.049 37.525 46.745 650.143 10 2023 495.732 75.800 37.900 47.213 656.644 11 2024 500.689 76.558 38.279 47.685 663.211 12 2025 505.696 77.324 38.662 48.162 669.843 13 2026 510.753 78.097 39.048 48.643 676.541 14 2027 515.860 78.878 39.439 49.130 683.307 15 2028 521.019 79.667 39.833 49.621 690.140 16 2029 526.229 80.463 40.232 50.117 697.041 17 2030 531.492 81.268 40.634 50.618 704.012 18 2031 536.807 82.081 41.040 51.124 711.052 19 2032 542.175 82.901 41.451 51.636 718.162 20 2033 547.596 83.730 41.865 52.152 725.344 21 2034 553.072 84.568 42.284 52.674 732.597 22 2035 558.603 85.413 42.707 53.200 739.923 23 2036 564.189 86.267 43.134 53.732 747.322 24 2037 569.831 87.130 43.565 54.270 754.796 25 2038 575.529 88.001 44.001 54.812 762.344 26 2039 581.285 88.881 44.441 55.360 769.967 27 2040 587.097 89.770 44.885 55.914 777.667 28 2041 592.968 90.668 45.334 56.473 785.443 29 2042 598.898 91.575 45.787 57.038 793.298 30 2043 604.887 92.490 46.245 57.608 801.231 Total 15.313.587 2.341.527 1.170.764 1.200.000 1.458.437 0 21.484.315

- the operating costs of buildings and equipment Investment maintenance on the experience of operational facilities takes into account the 1% -3% of the investment value of municipal infrastructure and equipment. We take into account the 2.5% of the investment value of municipal infrastructure.

Table: Maintanance and operating costs

MAINTAINANCE AND OPERATING COSTS Other Disposal of non- Disposal of Environmental unspecified YEAR/COSTS Labour Electricity Mat.+ fuel Maintenance hazardus mat. hazardus mat. Insurance tax costs 1 2014 75.600 37.800 45.375 327.000 52.800 54.450 52.320 28.875 65.400 2 2015 252.000 126.000 151.250 1.090.000 176.000 181.500 174.400 96.250 218.000 3 2016 254.520 127.260 152.763 1.100.900 177.760 183.315 176.144 97.213 220.180 4 2017 257.065 128.533 154.290 1.111.909 179.538 185.148 177.905 98.185 222.382 5 2018 259.636 129.818 155.833 1.123.028 181.333 187.000 179.684 99.166 224.606 6 2019 262.232 131.116 157.391 1.134.258 183.146 188.870 181.481 100.158 226.852 7 2020 264.855 132.427 158.965 1.145.601 184.978 190.758 183.296 101.160 229.120 8 2021 267.503 133.752 160.555 1.157.057 186.828 192.666 185.129 102.171 231.411 9 2022 270.178 135.089 162.160 1.168.628 188.696 194.593 186.980 103.193 233.726 10 2023 272.880 136.440 163.782 1.180.314 190.583 196.538 188.850 104.225 236.063 11 2024 275.609 137.804 165.420 1.192.117 192.489 198.504 190.739 105.267 238.423 12 2025 278.365 139.182 167.074 1.204.038 194.413 200.489 192.646 106.320 240.808 13 2026 281.148 140.574 168.745 1.216.078 196.358 202.494 194.573 107.383 243.216 14 2027 283.960 141.980 170.432 1.228.239 198.321 204.519 196.518 108.457 245.648 15 2028 286.800 143.400 172.137 1.240.522 200.304 206.564 198.483 109.541 248.104 16 2029 289.668 144.834 173.858 1.252.927 202.307 208.630 200.468 110.637 250.585 17 2030 292.564 146.282 175.597 1.265.456 204.331 210.716 202.473 111.743 253.091 18 2031 295.490 147.745 177.353 1.278.111 206.374 212.823 204.498 112.861 255.622 19 2032 298.445 149.222 179.126 1.290.892 208.438 214.951 206.543 113.989 258.178 20 2033 301.429 150.715 180.917 1.303.801 210.522 217.101 208.608 115.129 260.760 21 2034 304.443 152.222 182.726 1.316.839 212.627 219.272 210.694 116.280 263.368 22 2035 307.488 153.744 184.554 1.330.007 214.753 221.464 212.801 117.443 266.001 23 2036 310.563 155.281 186.399 1.343.307 216.901 223.679 214.929 118.618 268.661 24 2037 313.668 156.834 188.263 1.356.740 219.070 225.916 217.078 119.804 271.348 25 2038 316.805 158.403 190.146 1.370.308 221.261 228.175 219.249 121.002 274.062 26 2039 319.973 159.987 192.047 1.384.011 223.473 230.457 221.442 122.212 276.802 27 2040 323.173 161.586 193.968 1.397.851 225.708 232.761 223.656 123.434 279.570 28 2041 326.405 163.202 195.908 1.411.829 227.965 235.089 225.893 124.668 282.366 29 2042 329.669 164.834 197.867 1.425.948 230.245 237.440 228.152 125.915 285.190 30 2043 332.965 166.483 199.845 1.440.207 232.547 239.814 230.433 127.174 288.041 Total 8.505.098 4.252.549 5.104.746 36.787.923 5.940.068 6.125.695 5.886.068 3.248.475 7.357.585 -

o costs of energy, materials, services, o general costs and overheads, o costs of waste treatment, o costs of waste disposal, o costs of insurance, o ecological tax.

9.1.2 Projection of revenues

Table: Incomes

INCOMES

Incomes Incomes Incomes input- Incomes output- output- Total YEAR YEAR Slugde input-RDF Warm Electricity incomes 2014 1 0 0 1.147.500 202.500 1.350.000 2015 2 0 0 3.825.000 675.000 4.500.000 2016 3 0 0 3.863.250 681.750 4.545.000 2017 4 0 0 3.901.883 688.568 4.590.450 2018 5 0 0 3.940.901 695.453 4.636.355 2019 6 0 0 3.980.310 702.408 4.682.718 2020 7 0 0 4.020.113 709.432 4.729.545 2021 8 0 0 4.060.315 716.526 4.776.841 2022 9 0 0 4.100.918 723.691 4.824.609 2023 10 0 0 4.141.927 730.928 4.872.855 2024 11 0 0 4.183.346 738.238 4.921.584 2025 12 0 0 4.225.180 745.620 4.970.800 2026 13 0 0 4.267.431 753.076 5.020.508 2027 14 0 0 4.310.106 760.607 5.070.713 2028 15 0 0 4.353.207 768.213 5.121.420 2029 16 0 0 4.396.739 775.895 5.172.634 2030 17 0 0 4.440.706 783.654 5.224.360 2031 18 0 0 4.485.113 791.491 5.276.604 2032 19 0 0 4.529.964 799.405 5.329.370 2033 20 0 0 4.575.264 807.400 5.382.664 2034 21 0 0 4.621.017 815.474 5.436.490 2035 22 0 0 4.667.227 823.628 5.490.855 2036 23 0 0 4.713.899 831.865 5.545.764 2037 24 0 0 4.761.038 840.183 5.601.221 2038 25 0 0 4.808.649 848.585 5.657.234 2039 26 0 0 4.856.735 857.071 5.713.806 2040 27 0 0 4.905.302 865.642 5.770.944 2041 28 0 0 4.954.355 874.298 5.828.653 2042 29 0 0 5.003.899 883.041 5.886.940 2043 30 0 0 5.053.938 891.871 5.945.809 Total 0 0 129.095.233 22.781.512 151.876.744

Revenues have been demonstrated on the basis of input the material - the sludge from wastewater treatment plants and RDF material derived from MBO facility. Input material is thermally processed and the result of the processing is - electrical and heat energy. This represents a billing amount by the operator, who will charge it to the waste producer.

Table: Cost and income overview – financial analysis

COST AND INCOMES OVERVIEW - FINANCIAL ANALYSIS Discounted % rate Year Discounted % rate

cumulative cash

ref. Year flow

NETTO NETTO flow (€) costs (€) costs

costs (€) costs investment NETO NETTO cash

prices (€) prices

cost in fix cost

Investment Investment Operatonal Operatonal

Incomes (€) Incomes (€) incomes cask NETTO

Rest value (€) value Rest cost incomes flow A B C D C-B+D C-B+D-A A C-B+D C-B+D-A B 2014 1 21.800.000 1.939.620 1.350.000 -589.620 -22.389.620 20.373.832 -551.047 -20.924.879 -22.389.620 1.812.729 2015 2 0 3.071.800 4.500.000 1.428.200 1.428.200 0 1.247.445 1.247.445 -20.961.420 2.683.029 2016 3 0 3.102.518 4.545.000 1.442.482 1.442.482 0 1.177.495 1.177.495 -19.518.938 2.532.579 2017 4 0 3.133.543 4.590.450 1.456.907 1.456.907 0 1.111.467 1.111.467 -18.062.031 2.390.565 2018 5 0 3.164.879 4.636.355 1.471.476 1.471.476 0 1.049.142 1.049.142 -16.590.555 2.256.515 2019 6 0 3.196.527 4.682.718 1.486.191 1.486.191 0 990.312 990.312 -15.104.365 2.129.981 2020 7 0 3.228.493 4.729.545 1.501.053 1.501.053 0 934.780 934.780 -13.603.312 2.010.543 2021 8 0 3.260.778 4.776.841 1.516.063 1.516.063 0 882.363 882.363 -12.087.249 1.897.802 2022 9 0 3.293.385 4.824.609 1.531.224 1.531.224 0 832.884 832.884 -10.556.025 1.791.383 2023 10 0 3.326.319 4.872.855 1.546.536 1.546.536 0 786.180 786.180 -9.009.489 1.690.932 2024 11 0 3.359.582 4.921.584 1.562.001 1.562.001 0 742.096 742.096 -7.447.488 1.596.113 2025 12 0 3.393.178 4.970.800 1.577.621 1.577.621 0 700.483 700.483 -5.869.867 1.506.612 2026 13 0 3.427.110 5.020.508 1.593.398 1.593.398 0 661.203 661.203 -4.276.469 1.422.129 2027 14 0 3.461.381 5.070.713 1.609.332 1.609.332 0 624.127 624.127 -2.667.138 1.342.383 2028 15 0 3.495.995 5.121.420 1.625.425 1.625.425 0 589.129 589.129 -1.041.713 1.267.109 2029 16 0 3.530.955 5.172.634 1.641.679 1.641.679 0 556.093 556.093 599.966 1.196.057 2030 17 0 3.566.264 5.224.360 1.658.096 1.658.096 0 524.911 524.911 2.258.062 1.128.988 2031 18 0 3.601.927 5.276.604 1.674.677 1.674.677 0 495.476 495.476 3.932.739 1.065.680 2032 19 0 3.637.946 5.329.370 1.691.424 1.691.424 0 467.693 467.693 5.624.162 1.005.922 2033 20 0 3.674.326 5.382.664 1.708.338 1.708.338 0 441.467 441.467 7.332.500 949.516 2034 21 0 3.711.069 5.436.490 1.725.421 1.725.421 0 416.712 416.712 9.057.922 896.272 2035 22 0 3.748.180 5.490.855 1.742.675 1.742.675 0 393.345 393.345 10.800.597 846.014 2036 23 0 3.785.662 5.545.764 1.760.102 1.760.102 0 371.288 371.288 12.560.699 798.574 2037 24 0 3.823.518 5.601.221 1.777.703 1.777.703 0 350.468 350.468 14.338.402 753.794 2038 25 0 3.861.753 5.657.234 1.795.480 1.795.480 0 330.816 330.816 16.133.883 711.525 2039 26 0 3.900.371 5.713.806 1.813.435 1.813.435 0 312.265 312.265 17.947.318 671.626 2040 27 0 3.939.375 5.770.944 1.831.569 1.831.569 0 294.755 294.755 19.778.887 633.965 2041 28 0 3.978.768 5.828.653 1.849.885 1.849.885 0 278.227 278.227 21.628.772 598.416 2042 29 0 4.018.556 5.886.940 1.868.384 1.868.384 0 262.625 262.625 23.497.156 564.860 2043 30 0 4.058.742 5.945.809 0 1.887.068 1.887.068 0 247.899 247.899 25.384.224 533.185 Total 21.800.000 104.692.521 151.876.744 0 47.184.224 25.384.224 20.373.832 17.522.099 -2.851.733 11.689.609 40.684.797 Total discounted 20.373.832 40.684.797 58.206.896 0 17.522.099 -2.851.733

Explaining:  Depending on the type of investment, we take into account the 7% rate for discounting.  Revenues cover operating costs and investment maintenance.

9.1.3 Net present value and internal rate of return – financial analysis

Table: Net present value and internal rate of return

Net present value Approx. Calculation of NPV can be: · investment costs - (fix prices incl. VAT) I = €, 21.800.00€ · economic life of project (years) i= 30 · Discount rate p = %. p= 7%

n i I  i i  1 1  p  FNPV = FNPV= -2.851.733

Financial Internal rate of return

FIRR= -1,262%

Financial relative net present value

FRNPV= -0,140

Explanation:  The financial net present worth, label FNPV.  In the baseline calculation is FNPV negative and amounted to 2.851.733,00 EUR  Is one of the most commonly used criteria for judging the reasonableness of the investment project, its net present worth or clear present value. The amount of the net current value directly depends on the interest rate such as the cost of capital and the discount rate, using the corresponding 1 + i, by which are reduced future financial flows at the initial moment. In our specific case, we take the interest rate of 7% per annum (the discount rate is the annual percentage rate at which the current value of the monetary unit in the coming years with time decreases).  The financial internal profitability rate, label FIRR.  Taking into account the investment value, revenue and operating costs, FIRR is negative.  In the case we use discount rate, which is at constant prices 7%, we are looking for the continuation of the project a positive net present value and internal rate of return higher than an individual discount rate of 7%, making the investment in this case justified and economically reasonable.

10. ECONOMIC COST-BENEFIT ANALYSIS

10.1 Basic assumptions of financial analysis

Preliminary, we present assumptions for an analysis: o We used the constant prices, o Reference period is 30 years, o Financial discount rate is 5%, o The first full year of regular operation of entire center – year 2015, o The trial operation in the year 2014, o In the analysis we included operating costs, operating costs, capital costs, labour costs and costs of disposal, o We take into account the public good, o On the basis of the economic analysis, we show the sensitivity analysis and risk analysis.

10.1.1 Maintainance and operating costs

Table: Maintanace – investment part

MAINTAINANCE - investment part TOTAL

o The operating costs of facilities and equipment.

Investment maintenance on the experience of operational facilities takes into account the 1% -3% of the investment value of municipal infrastructure and equipment. We take into account the 2.5% of the investment value of municipal infrastructure.

Table: Maintanance and operating costs

o the cost of energy, materials, services, o general cost and overheads, o the costs of waste treatment, disposal costs, o Cost of insurance and ecological tax.

10.1.2 Incomes

Table: Incomes and public benefits

INCOMES PUBLIC BENEFITS TOTAL

Incomes Incomes Municipalties total public- Incomes input- Incomes output- output- Total Sludge Reducing CO2 benefit - external YEAR YEAR Slugde input-RDF Warm Electricity incomes disposal emisions electricity incomes 2014 1 0 0 1.147.500 202.500 1.350.000 150.000 150.000 202.500 502.500 1.852.500 2015 2 0 0 3.825.000 675.000 4.500.000 500.000 500.000 675.000 1.675.000 6.175.000 2016 3 0 0 3.863.250 681.750 4.545.000 505.000 505.000 681.750 1.691.750 6.236.750 2017 4 0 0 3.901.883 688.568 4.590.450 510.050 510.050 688.568 1.708.668 6.299.118 2018 5 0 0 3.940.901 695.453 4.636.355 515.151 515.151 695.453 1.725.754 6.362.109 2019 6 0 0 3.980.310 702.408 4.682.718 520.302 520.302 702.408 1.743.012 6.425.730 2020 7 0 0 4.020.113 709.432 4.729.545 525.505 525.505 709.432 1.760.442 6.489.987 2021 8 0 0 4.060.315 716.526 4.776.841 530.760 530.760 716.526 1.778.046 6.554.887 2022 9 0 0 4.100.918 723.691 4.824.609 536.068 536.068 723.691 1.795.827 6.620.436 2023 10 0 0 4.141.927 730.928 4.872.855 541.428 541.428 730.928 1.813.785 6.686.640 2024 11 0 0 4.183.346 738.238 4.921.584 546.843 546.843 738.238 1.831.923 6.753.507 2025 12 0 0 4.225.180 745.620 4.970.800 552.311 552.311 745.620 1.850.242 6.821.042 2026 13 0 0 4.267.431 753.076 5.020.508 557.834 557.834 753.076 1.868.744 6.889.252 2027 14 0 0 4.310.106 760.607 5.070.713 563.413 563.413 760.607 1.887.432 6.958.145 2028 15 0 0 4.353.207 768.213 5.121.420 569.047 569.047 768.213 1.906.306 7.027.726 2029 16 0 0 4.396.739 775.895 5.172.634 574.737 574.737 775.895 1.925.369 7.098.003 2030 17 0 0 4.440.706 783.654 5.224.360 580.484 580.484 783.654 1.944.623 7.168.983 2031 18 0 0 4.485.113 791.491 5.276.604 586.289 586.289 791.491 1.964.069 7.240.673 2032 19 0 0 4.529.964 799.405 5.329.370 592.152 592.152 799.405 1.983.710 7.313.080 2033 20 0 0 4.575.264 807.400 5.382.664 598.074 598.074 807.400 2.003.547 7.386.211 2034 21 0 0 4.621.017 815.474 5.436.490 604.054 604.054 815.474 2.023.582 7.460.073 2035 22 0 0 4.667.227 823.628 5.490.855 610.095 610.095 823.628 2.043.818 7.534.673 2036 23 0 0 4.713.899 831.865 5.545.764 616.196 616.196 831.865 2.064.257 7.610.020 2037 24 0 0 4.761.038 840.183 5.601.221 622.358 622.358 840.183 2.084.899 7.686.120 2038 25 0 0 4.808.649 848.585 5.657.234 628.582 628.582 848.585 2.105.748 7.762.982 2039 26 0 0 4.856.735 857.071 5.713.806 634.867 634.867 857.071 2.126.806 7.840.611 2040 27 0 0 4.905.302 865.642 5.770.944 641.216 641.216 865.642 2.148.074 7.919.018 2041 28 0 0 4.954.355 874.298 5.828.653 647.628 647.628 874.298 2.169.554 7.998.208 2042 29 0 0 5.003.899 883.041 5.886.940 654.104 654.104 883.041 2.191.250 8.078.190 2043 30 0 0 5.053.938 891.871 5.945.809 660.645 660.645 891.871 2.213.162 8.158.972 Total 0 0 129.095.233 22.781.512 151.876.744 16.875.194 16.875.194 22.781.512 56.531.899 208.408.644

In the economic analysis are the extra revenues - a public good are considered as savings or added value for the environment and the population.

For the sake of the public good/interest we considered savings in disposal of sludge from wastewater treatment plants, reducing emissions and indirect impact on human health and the direct benefit for the municipalities and people through the sale of electrical energy.

10.1.2.1 Public benefits calculation

Non-disposal sludge from wastewater treatment plants

By choosing the thermal processing of sludge from wastewater treatment plants we are no longer obliged to the stabilization and disposal of sludge to disposal area. Instead of drying process and deposition, we hand over the sludge to the thermal treatment, which produces electricity and heat, while we no longer have any costs of drying and disposal.

Calculation: 10,000 tons x 50EUR / t = € 500,000 / year

Emission reduction - a medical condition The object of the investment will reduce greenhouse gases in the environment, improve the cleanliness of the air and the environment and reduce the bacteria spreading. We assume that in a cleaner and more organized environment, interest in the sport, and thus the proportion of persons, will increase. On this account it will be reduced the number of illnesses and the cost of purchasing medicines and hospital care, which means a saving to the Exchequer. Public institution – Health Center will also save money, because there will no longer be so many visits by nursing staff. With the increasing concern for the health of individuals it can be expected reduced visits to the emergency clinics, saving at ambulance, etc. One hospital day averages approximately 130EUR per day. Here we need to take into account saving the medicines, because in the future there will be less colds, headaches, pain, etc. … for example. Cost of aspirin: 3, 9EUR, Angal S: 6.72EUR, Persen: 6.86EUR ... etc. We calculated that the savings at the expense of the new investments will be 5€ per year per capita (treatment costs will be reduced, the health status of the population will be improved).

Calculation: 100.000 x 5, 0 EUR = 500.000 EUR/year

Benefit of the Municipalities - electricity By taking a raw materials - sludge from wastewater treatment facilities and RDF from MBO infrastructure - municipalities will completed the entire process of handling waste from collection to final treatment. Municipalities have their own thermal treatment because of the economic advantage - production and sale of the electricity.

Calculation: 15.000 Mwh x 45EUR/Mwh = 675.000 EUR/year

Table: Cost and incomes overview – economical analysis COST AND INCOMES OVERVIEW - ECONOMICAL ANALYSIS

Discounted % rate Year Discounted % rate

investment NETO NETTO cumulative ref. Year

cost incomes cash flow cash flow

NETTO NETTO

flow flow (€)

costs (€) costs (€) costs

prices (€) prices

cost in fix cost

Investment Investment

Operatonal Operatonal Operatonal

Incomes (€) Incomes (€) incomes (€) Incomes

NETTO cask cask NETTO Rest value (€) value Rest A B C E C-B+E C-A-B+E A C-B+E C-B+E-A B C 2014 1 21.800.000 1.939.620 1.852.500 0 -87.120 -21.887.120 20.761.905 -82.971 -20.844.876 -21.887.120 1.847.257 1.764.286 2015 2 0 3.071.800 6.175.000 0 3.103.200 3.103.200 0 2.814.694 2.814.694 -18.783.920 2.786.213 5.600.907 2016 3 0 3.102.518 6.236.750 0 3.134.232 3.134.232 0 2.707.467 2.707.467 -15.649.688 2.680.072 5.387.539 2017 4 0 3.133.543 6.299.118 0 3.165.574 3.165.574 0 2.604.326 2.604.326 -12.484.114 2.577.974 5.182.300 2018 5 0 3.164.879 6.362.109 0 3.197.230 3.197.230 0 2.505.113 2.505.113 -9.286.884 2.479.765 4.984.879 2019 6 0 3.196.527 6.425.730 0 3.229.202 3.229.202 0 2.409.681 2.409.681 -6.057.681 2.385.298 4.794.978 2020 7 0 3.228.493 6.489.987 0 3.261.494 3.261.494 0 2.317.883 2.317.883 -2.796.187 2.294.429 4.612.313 2021 8 0 3.260.778 6.554.887 0 3.294.109 3.294.109 0 2.229.583 2.229.583 497.922 2.207.023 4.436.605 2022 9 0 3.293.385 6.620.436 0 3.327.050 3.327.050 0 2.144.646 2.144.646 3.824.973 2.122.946 4.267.592 2023 10 0 3.326.319 6.686.640 0 3.360.321 3.360.321 0 2.062.946 2.062.946 7.185.294 2.042.071 4.105.017 2024 11 0 3.359.582 6.753.507 0 3.393.924 3.393.924 0 1.984.357 1.984.357 10.579.218 1.964.278 3.948.635 2025 12 0 3.393.178 6.821.042 0 3.427.863 3.427.863 0 1.908.763 1.908.763 14.007.081 1.889.449 3.798.211 2026 13 0 3.427.110 6.889.252 0 3.462.142 3.462.142 0 1.836.048 1.836.048 17.469.223 1.817.470 3.653.517 2027 14 0 3.461.381 6.958.145 0 3.496.763 3.496.763 0 1.766.103 1.766.103 20.965.987 1.748.233 3.514.336 2028 15 0 3.495.995 7.027.726 0 3.531.731 3.531.731 0 1.698.823 1.698.823 24.497.718 1.681.633 3.380.456 2029 16 0 3.530.955 7.098.003 0 3.567.048 3.567.048 0 1.634.106 1.634.106 28.064.766 1.617.571 3.251.677 2030 17 0 3.566.264 7.168.983 0 3.602.719 3.602.719 0 1.571.854 1.571.854 31.667.485 1.555.949 3.127.804 2031 18 0 3.601.927 7.240.673 0 3.638.746 3.638.746 0 1.511.974 1.511.974 35.306.231 1.496.675 3.008.649 2032 19 0 3.637.946 7.313.080 0 3.675.134 3.675.134 0 1.454.375 1.454.375 38.981.365 1.439.659 2.894.034 2033 20 0 3.674.326 7.386.211 0 3.711.885 3.711.885 0 1.398.970 1.398.970 42.693.250 1.384.815 2.783.785 2034 21 0 3.711.069 7.460.073 0 3.749.004 3.749.004 0 1.345.676 1.345.676 46.442.253 1.332.060 2.677.736 2035 22 0 3.748.180 7.534.673 0 3.786.494 3.786.494 0 1.294.412 1.294.412 50.228.747 1.281.315 2.575.727 2036 23 0 3.785.662 7.610.020 0 3.824.359 3.824.359 0 1.245.101 1.245.101 54.053.106 1.232.503 2.477.604 2037 24 0 3.823.518 7.686.120 0 3.862.602 3.862.602 0 1.197.669 1.197.669 57.915.708 1.185.550 2.383.219 2038 25 0 3.861.753 7.762.982 0 3.901.228 3.901.228 0 1.152.044 1.152.044 61.816.936 1.140.386 2.292.430 2039 26 0 3.900.371 7.840.611 0 3.940.241 3.940.241 0 1.108.156 1.108.156 65.757.177 1.096.943 2.205.099 2040 27 0 3.939.375 7.919.018 0 3.979.643 3.979.643 0 1.065.941 1.065.941 69.736.820 1.055.155 2.121.096 2041 28 0 3.978.768 7.998.208 0 4.019.439 4.019.439 0 1.025.333 1.025.333 73.756.259 1.014.958 2.040.292 2042 29 0 4.018.556 8.078.190 0 4.059.634 4.059.634 0 986.273 986.273 77.815.893 976.293 1.962.566 2043 30 0 4.058.742 8.158.972 0 4.100.230 4.100.230 0 948.701 948.701 81.916.123 939.101 1.887.802 Total 21.800.000 104.692.521 208.408.644 0 103.716.123 81.916.123 20.761.905 49.848.048 29.086.143 828.233.941 51.273.045 101.121.093

Total discounted 20.761.905 51.273.045 101.121.093 0 49.848.048 29.086.143

Explaining:  Depending on the type of investment, we take into account the 5% rate for discounting.  To the incomes from financial analysis, we added benefits from the list "public good". 10.1.3 Net present value and internal rate of return – economical analysis

Tabela: Net present value and internal rate of return

Economical Net present value Approx.. Calculation of ENPV can be: · investment costs - (fix prices incl. VAT) I = €, 21.800.000 € · economic life of project (years) i= 30 · discount rate p = %. p= 5%

n i I  i i  1 1  p  ENPV = ENPV= 29.086.143

Economical Internal rate of return

EIRR= 9,367%

Economical relative net present value

ERNPV= 1,401

Discounted period of return

DPR= 8,2

 Project duration has been done for 30 years.  Net current value, used at 5% annual interest rate (discount rate), is positive.  Internal rate of yield at the discount rate was positive and amounted to 9.367%.  This indicates that the internal rate of profitability is higher than an individual discount rate, by which the investment is economically viable in this case and expressing that each unit of invested capital increase 0.093670 units.  Economic relative net current value is positive and amounts to 1.401.  The economic payback of the investment is in 8.2 years.

10.2 Results of financial and economic analysis

Financial Economical analysis analysis Investment costs at the constant prices EUR 21.800.000 21.800.000 Investment costs at the current prices EUR 22.018.000 22.018.000 Reference period years 30 30 Payback period of investment from financial years 16,9 analysis Payback period of investment from 8,2 economic analysis Financial discount rate % 7 Economic discount rate % 5 Financial NSV of the project EUR -2.851.733 Financial IRR - Internal yield rate % -1,262 Financial RNSV -0,140 Economic IRR - Internal yield rate % 9,367 Economic net current value EUR 29.086.143 Economic RNSV 1,401

11. SENSITIVITY AND RISK ANALYSIS

11.1 Sensitivity analysis (+/- 1%, +/-5%)

In the context of sensitivity analysis conclude possible changes in key variables that affect the implementation of the project. In this project, we assume:  rise of investment costs by 10%,  diminishing incomes by 10%,  rise of investment by 10% and at the same time diminishing incomes by 10%.

Results for economic sensitivity analysis are given in the following table:

Table: NSV and EIRR by varying the key variables

Change ENPV (€) EIRR (%) ERNPV DPR Rise of investment costs by 10% 27.009.953 8,0% 1,2 9,8 Diminishing incomes by 10% 18.974.034 6,3% 0,9 10,9 Rise of investment costs by 10% and at the same time diminishing incomes by 10% 16.897.843 5,2% 0,7 11,6 Basic data parameters 29.086.143 9,4% 1,4 8,2

Explanation: In the case of increasing investment by 10%, the internal profitability rate decreases. The net current value is positive. Revenues decrease by 10% means that the internal profitability rate decreases. The net current value is positive. Simultaneous investment increasing by 10% and revenue decreasing by 10% means that the internal profitability rate decreases. The net current value remains positive.

According to the indicative benchmark about the long-term outcomes of economic growth and the current time preferences rates, the project is in municipal infrastructure with an internal rate of return of 5.5% economically viable in justified.

11.2 Risk analysis

Exposure to various types of risk, such as business, financial risk as well as ecological risk is a constant in the management of municipalities. Therefore, a special attention is given to the risk managing. We estimate that the probability of risk exists, but does not compromise the decision- making process for the project. We predicted potential areas of risks and indicated hove to solve them.

1. Business risks In the field of business risks, the public enterprise is exposed to the sales risk, working risk, investment risk and other various external risks. Investment risk is certainly the bigger, because it is necessary to select technologies that enable a closed circle of energy and maximum material utilization of waste for energy purposes, the minimum quantity of remaining waste for disposal – all of this in the continuation of the project. It has to be done a specific comparison of different technologies for provided input materials for thermal treatment of the economic, technical and environmental point of view.

2. Financial risks Cover investments and closed financial structure imply a major risk for the municipalities, because without municipalities they will not be able to close the financial construction. Solvency risk (liquidity risk) will be dominated by the planning of the cash flows. Specific risks during the operation in the achievement of financial results are the formulation of waste management tariffs as public utilities. Running costs will be completely recovered; the percentage of coverage depends on option pricing and other costs of waste management in the region.

3. Ecological risks Ecological risk has to be in the future restricted by the optimal technology choice. We have to choose the appropriate technology, which is the most optimal in terms of noise, landfill leachate and air emissions.

4. Public interest risks The public interest for the project definitely exists - because it will improve the quality of the environment; on the other hand, the project will improve the prosperity and welfare of the population, but also it will conclude the waste treatment circle.

12. COMPLETION

The processing of municipal waste into SRF fuel and its use is almost twice less pollution with CO2, depending on the energy produced than coal or lignite and thus significantly contribute reducing dependence on fossil fuels. Fuel from waste is comparable according to emission factor for natural gas. The recovery of waste into fuel limiting landfill and consequently reduce environmental pollution by greenhouse gases methane, but also reduces the possibility of groundwater contamination.

Making SRF fuels from waste and their use for cogeneration of heat and power allows the realization of the following objectives:

 Reduction of waste that are disposed of in a landfill,  Solution to the problem of the final deposit of sewage sludge,  Provision of missing facilities production of hot water and the associated reliable operation of district heat supply,  Reduce the burden on users by creating additional revenue in the market (sale of heat and electricity production),  Cheaper heat for domestic heating and industry,  Development of new industries, due to cheaper heat.

The economic aspect of the decision of system thermal processing SRF fuel into heat and electricity achieves the following goals:  The employment of 16 new employees,  Payback period of investment from financial analysis in 16,9 years,  Payback period of investment from economical analysis in 8,2 years,  Economical internal rate of return is 9.37%, which is higher than the discount rate, which is in such projects 5,5%.

Local energy independence can be encouraged by technological solutions and projects that make use of local alternative fuel sources and are not dependent on fossil fuels. A feasibility study has demonstrated the basic premises for: 1. Production of RDF / SRF fuel from alternative sources of energy, 2. Establishment of thermal processing RDF / SRF fuels and combined heat, power and features for its economic viability.