WATER GLOBAL PRACTICE Wastewater: From Waste to Resource The Case of Santa Cruz de la Sierra, Bolivia Covered Anaerobic Ponds and Their PHOTO 1. SAGUAPAC WWTP’s Anaerobic Lagoons Potential for Energy Generation in Covered to Collect Biogas and Reduce Odors Generated During Anaerobic Metabolization Wastewater Treatment Plants Context The city of Santa Cruz de la Sierra is a fast-growing and economically dynamic city with a population of approximately 2 million (2012). Commonly known as Santa Cruz, the city is one of the world’s fastest grow- ing, home to one-fourth of Bolivia’s population, and responsible for 30 percent of Bolivia’s GDP (Camara de Industria y Comercio Santa Cruz, 2016). Population growth at an annual rate of 6 percent and a lack of infrastructure created challenges for the Santa Cruz sanitation sector. Up until 2007, sanitation ser- vices were provided by 10 cooperatives, the largest of which was Servicio de Agua Potable y Alcantarillado Sanitario (SAGUAPAC), serving 65 percent of the city’s geographic area. However, SAGUAPAC’s actual Source: SAGUAPAC. 1 coverage in the service area hovered around 50 per- lagoons—an inexpensive solution to treat wastewater—­ cent (World Bank 2007). The direct impact of the lack SAGUAPAC is able to capture and burn biogas of infrastructure combined with continuous popu­ (methane). The biogas could potentially be used to lation growth was an infiltration of raw sewage into generate electricity to cover part of SAGUAPAC’s underground aquifers from housing unconnected to energy needs. Additionally, SAGUAPAC participated in the sewage system. By installing covered anaerobic the Urban Wastewater Methane Gas Capture project, which was developed to reduce greenhouse gas (GHG) emissions by burning the methane produced, generat- CHALLENGE ing carbon credits, and leveraging additional financing Rapid population growth and lack of infrastructure have led to for sanitation infrastructure. increased wastewater flow, effluent aquifer infiltration, and high methane emissions OBJECTIVE Project • Increase wastewater treatment capacity cost-effectively As Santa Cruz struggled to increase its wastewater • Expand wastewater coverage and operational efficiency treatment capacity, covered anaerobic lagoons tech- • Generate cost savings through energy production nology was identified as a possible solution. Not only • Reduce GHG emissions from urban wastewater treatment are covered anaerobic lagoons cost-­ efficient and facilities in Santa Cruz low-energy intensive but they also offer financial • Use market-based instruments for financing benefits such as energy generation and the ability to sell carbon credits for low- ering GHG emissions. While Electricity Consumption per Population Served per Year for FIGURE 1. Different Wastewater Treatment Technologies lagoon wastewater treatment plants are demanding in terms 160 of land requirements, they are considerably less capital 140 intensive at US$50 per person 120 compared with US$120 for conventional activated sludge. kWh / PE120 / y 100 Similarly, operational expen- 80 ditures (opex) are consider- ably less for lagoons than for 60 other wastewater treatment 40 technologies. Figure 1 shows the electricity requirements 20 to operate different waste- 0 water treatment technologies Lagoon TF CAS EA MBR (electricity requirement is a Source: Crawford, Sandino, and CH2M Hill Canada Limited 2010. good proxy for operations and Note: Based on assumption of 500 mg of Chemical Oxigen Demad/Liter, Lagoon data include maintenance [O&M] costs). anaerobic lagoons. PE120 is the population equivalent at 120 g COD/person-day (number of people served assuming that each person discharges 120 g of chemical oxygen demand per day). CAS = Anaerobic lagoons have been conventional activated sludge; EA = extended aeration activated sludge; MBR = membrane bioreactors; TF = trickling filters. effective for the pretreatment 2 Wastewater: From Waste to Resource of high strength organic wastewaters and provide transforming methane into water and carbon dioxide advantages such as the rapid stabilization of strong (a less potent GHG). organic wastes. However, anaerobic lagoons produce An Emissions Reductions Purchase Agreement was high quantities of methane, a GHG with a global warm- signed in 2007. According to the agreement, the first ing potential much more powerful than carbon diox- of its kind in low-income countries under the Clean ide. (U.S. EPA 2014) In Santa Cruz, SAGUAPAC operates Development Mechanism (CDM), the Community four WWTPs with anaerobic lagoons, all consisting of Development Carbon Fund would buy emission screening and covers, followed by open air facultative reductions from four SAGUAPAC wastewater treat- and maturation ponds. The methane gas collected ment plants. Given that biogas (methane) is captured, from the covered anaerobic lagoons is sent to water the natural next stage in the project is to switch from traps, where water is removed. Following the water burning the gas to using it for electricity generation. traps, the biogas is sent to a station where it is mon- SAGUAPAC planned to produce electricity generated itored, pumped, and burned under controlled condi- from the gas captured from the covered lagoons, cre- tions. Burning the biogas reduces GHG emissions by ating an estimated savings of up to US$1 million per year and producing enough energy (1900 kilowatts) to supply over one-third of the electricity used by Water Traps at Biogas Line at PHOTO 2. the whole utility (water and wastewater). Payback of SAGUAPAC WWTP the system for the utility was estimated at two years (Nolasco 2014). Financial and Contractual Agreements With an urgent need in Bolivia to mobilize invest- ments for sanitation infrastructure, SAGUAPAC saw an opportunity to treat wastewater with the added benefit of financial gains through energy generation and the sale of carbon credits. Construction of the facilities was partially financed through the World Bank Bolivia Urban Infrastructure Project, which aimed at improving the access to basic services to the urban poor in Bolivia’s major cities through targeted infrastructure investments. A subsequent Urban Wastewater Methane Gas Capture project, framed as a carbon finance operation and financed through the Community Development Carbon Fund (CDCF), pro- vided a cost recovery mechanism for the gas collec- tion system through the sale and purchase of Certified Emissions Reductions (CERs) and Verified Emissions Reductions (VERs). Moreover, the future potential to generate electricity from biogas would also lower Source: Nolasco 2014. operational costs. Wastewater: From Waste to Resource 3 SAGUAPAC planned to use the national electric net- by the World Bank, Bolivia had ratified the Kyoto work to transport the electricity generated from Protocol and was in a position to participate in the its wastewater treatment plants to the various points CDM and receive revenues from the carbon market where SAGUAPAC needs energy. The electricity legis- included in the treaty. Since Bolivia had the ability to lation in Bolivia (Ley de electricidad) establishes that develop projects through the CDM, the World Bank electricity distribution agents must allow the use of could finance the purchase of CERs under the CDCF their networks to self-generating (“autoproductores”) project. As a result, the World Bank, as a trustee of and consuming entities within their concession area, the CDCF, entered into a CER purchase agreement provided that the self-generating entity pays for with SAGUAPAC for the four anaerobic lagoons. The the use of the network (transportation fee). The law investment needed to cover the lagoons and build applies to SAGUAPAC, since it is both producing and the system for gas flaring came from funds from consuming electricity within the distribution network the World Bank Bolivia Urban Infrastructure project in Santa Cruz de la Sierra. The legislation says that if for two WWTPs; SAGUAPAC used internal financing the  installed capacity is below 2000 kilowatts, pro- for the remaining two WWTPs. Finally, the Bolivian ducers have to register only with the electrical regula- CDM Designated National Authority approved the tor, which is a quick, inexpensive, and easy procedure. gas capture development, which made the project For capacity above 2000 kilowatts, producers would viable, given that the project was consistent with have to obtain a license as generators and become a the  country’s overall Sustainable Development market agent, which from an administrative and insti- Goals (SDGs).1 tutional standpoint is more complicated, as well as Initially, the World Bank committed US$3 million for more costly to SAGUAPAC. SAGUAPAC, as a regulated purchase of ERs (emission reductions) up to 2012. consumer, has requested the use of the network to However, by 2010 the World Bank had disbursed transport the energy generated at its wastewater treat- only US$190,000 and subsequently canceled the CER ment plants to various points where SAGUAPAC needs purchase agreement due to a change in legislation. that energy. Since there is no legal framework that In 2010, Bolivia’s legislative assembly passed the directly regulates the electricity transmission fee, the Law of the Rights of Mother Earth, granting rights service needs to be negotiated between SAGUAPAC to the natural world and life systems. Consequently, and the Bolivia power utility (Cooperativa Rural de the concept of selling and purchasing natural Electrificacion [CRE]). The lack of incentives for the resources, including carbon emissions, would no electricity distribution utility to promote this type of longer be consistent with the law. This resulted in use of its network and a lack of governmental policies a new government strategy for sustainable devel- that consider intersectoral partnerships (in this case opment: a strategy that did not include the Urban between the water and electricity utility) is delay- Wastewater Methane Gas Capture project and which ing negotiations, preventing the use of this valuable thereby rendered the project ineligible for the CDM. 2 resource and unnecessarily increasing the operation Although the CER purchase agreement was can- costs for the utility. celled, SAGUAPAC implemented the methane gas Regarding the sale of emissions reduction credits, capture systems at its lagoons in Santa Cruz and it the Urban Wastewater Methane Gas Capture proj- continues to maintain operations at its wastewater ect facilitated the issuance of carbon credits to raise treatment plants. Therefore, even if the project still revenue for further infrastructure and sanitation has environmental benefits, it is not achieving its full improvements. At the time of the project appraisal economic potential. 4 Wastewater: From Waste to Resource Benefits For SAGUAPAC Environmental • Covered anaerobic lagoons have lower O&M costs than other • Climate change mitigation: even if the sale of CER were not wastewater treatment technologies realized, the project stills reduces GHG emissions • Improved treatment capacity: heat from biogas combustion can be • The project aimed at displacing over 44,000 tons of CO2e per used to heat and mix the contents of the anaerobic lagoon, which year of operation improves its treatment performance, increasing the generation of biogas • Investment secured through World Bank project and private For the community of Santa Cruz funding meant financial risks were not directly associated with • Expansion of sanitary infrastructure and capacity the carbon finance operation • Reduction of odors to nearby residential areas: by keeping • Future potential: by installing generators with total power of the contents of the lagoon covered, undesirable odors are 1,900 kilowatts, SAGUAPAC could supply over one-third of the captured and burned, increasing the acceptance for wastewater electricity used by all the utility, generating savings of US$1 treatment plants million per year • Community benefit plan was developed to connect up to • Potential (unrealized due to the change of legislation): the 600 families in a low-income area of the city to a sewage sale of ERs could have represented a total income of around treatment system financed through a premium added to the US$ 2.79 million over 12 years. agreed ER price Lessons Learned PROFILE Ambiguous legal and regulatory framework. The full NAME potential of the project has not been realized due to Santa Cruz Anaerobic Ponds and Methane Gas Capture ambiguous or lack of regulatory frameworks. Both LOCATION the sale of carbon credits and the use of electricity Santa Cruz de La Sierra, Bolivia generated have been stalled. At the time of project SIZE preparation, the CDM rules and Bolivia’s definition of 118,000 m3/day (capacity) sustainable development were under development. Since the local regulation changed, the CDM was no MAIN INNOVATION longer the right mechanism to continue supporting Innovative contract agreement and finance this project. The lack of a regulatory framework to TECHNOLOGY integrate water and energy utilities in Bolivia was a Covered anaerobic ponds barrier to exploit the value added from biogas and con- Methane gas capture and controlled burning vert it into electricity. Potential for electricity generation Benefits of methane gas capture facilities. By the end operational costs and could engage with the CDM if the of the project, three functioning methane gas capture legislation changes. facilities were realized. SAGUAPAC benefited from the investment in terms of commitment to global envi- Strong and proven implementation capacity. The imple- ronmental issues and improving wastewater treat- mentation success of the infrastructure part of the proj- ment operational and safety measures even without ect can be attributed to the competence and interest of the financial revenues of the CDM. In the future, with the SAGUAPAC to carry out the project. The choice of the right regulation framework in place, SAGUAPAC implementing agency was thus of key importance in could generate electricity from biogas and decrease the methane gas capture project design. Wastewater: From Waste to Resource 5 Integrated approach. The existing Bolivia Urban 2. The rules for eligibility for the CDM incorporate a mechanism for country approval, which ensures the project contributes to local Infrastructure Project helped leverage funds and pro- sustainable development. vide investment where it was needed. This allowed the Urban Wastewater Methane Gas Capture project to generate benefits through market instruments such as References the CDM. Bachmann, N. 2015. “Sustainable Biogas Production in Municipal Wastewater Treatment Plants.” IEA Bioenergy. http://task37.ieabioenergy​ .com/files/daten-redaktion/download/TechnicalBrochures/Wastewater​ _­biogas_grey_web-1.pdf. Conclusion Camara de Industria y Comercio Santa Cruz. 2016. “Bolivia y Santa Cruz Integrating innovative financing mechanisms such en Cifras.” Santa Cruz de la Sierra. http://www.cainco.org.bo/uploads​ as CDM and ER sales with concessional financing for /­item/240/240_item.pdf. infrastructure can add tremendous value and leverage Crawford, G., and J. Sandino. 2010. Energy Efficiency in Wastewater further improvements where sanitation infrastruc- Treatment in North America: A Compendium of Best Practices and Case ture is sorely needed. However, legal and regulatory Studies of Novel Approaches. Alexandria, VA: Water Environment Research Foundation. changes—though unlikely to be as sweeping as the Law Nolasco, D. 2014. “Electricity Use and Potential Generation at Wastewater of the Rights of Mother Nature—can derail or delay suc- Treatment Utilities—The Case of Santa Cruz de la Sierra, Bolivia.” cessful project implementation. Furthermore, this case Presented at the Energy for Water Workshop organized by the King demonstrates that similar projects in the future should Abdullah Petroleum Studies and Research Center (KAPSARC), Paris, September 15. consider early in project preparation the potential for regulatory challenges, such as the lack of a legal frame- UNFCCC (United Nations Framework Convention on Climate Change). 1997. “Designated National Authorities.” CDM (Clean Development work establishing the cost to transmit self-­ produced Mechanism), UNFCCC. https://cdm.unfccc.int/DNA/index.html. electricity. U.S. EPA (United States Environmental Protection Agency). 2014. “Wastewater Technology Fact Sheet: Anaerobic Lagoons.” U.S. EPA. https://www3.epa.gov/npdes/pubs/alagoons.pdf. Notes World Bank. 2007. “Bolivia—Urban Wastewater Methane Gas Capture 1. “A Designated National Authority (DNA) is the organization granted Project.” Project Appraisal Document, World Bank, Washington, DC. responsibility by a Party (Bolivia) to authorize and approve participa- tion in CDM projects. Establishment of a DNA is one of the require- ———. 2014. “Note on Cancelled Operation (P104092).” Report 93337, ments for participation by a Party in the CDM” (UNFCCC 1997). World Bank, Washington, DC. ­ ank. Some rights ­ © 2018 International Bank for Reconstruction and Development / The World B reserved. The find- ings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, represent. The World Bank does not guarantee the accuracy its Board of Executive Directors, or the governments they ­ work. This work is subject to a CC BY ­ of the data included in this ­ (https://creativecommons.org/licenses​ 3.0 IGO license ­ by/3.0/igo). 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