Date: October 15 , 2014

To: Susan Fairchild

OAQPS/SPPD/NRG (D243

- 02) U.S. Environmental Protection Agency Research Triangle Park, NC 27711

From: Dave Reeves, RTI International

Subject: Control Cost Evaluation for Glass

- Melting Furnaces

Final Wool Fiberglass Manufacturing NESHAP

- Residual Risk and Technology Review (RTR) Amendments Wool Fiberglass Manufacturing RTR RTI Project No. 0213199.00 3 .0 09

The purpose of this memorandu m is to present the information used for the potential control cost evaluation for gas

- fired glass

- melting furnaces used in the wool fiberglass manufacturing industry to comply with the final RTR amendments.

I. OVERVIEW

In order to comply with the chromiu m compound emission limit proposed for gas

- fired glass

melting furnaces, several control options were evaluated for comparison purposes and included:

1) Caustic scrubber; 2) Venturi scrubber; 3) HEPA filter;

4 ) 3

- Stage filter;

5 ) 3

- Stage filter with water clean; 6) Membrane baghouse; 7) Reduced furnace life cycle (i.e., net present value approach); and 8) Replacing cullet.

Much of the following information related to options 2 through 5 listed above was provided by

NAIMA in the ir comments to the April 15, 2013 supplemental proposal (78 FR 22370). The NAIMA information and cost calculations were reviewed and is being included here for clarification and comparison. Table 1 provides a summary of potential control options and the

as sociated costs.2

Table 1. Cost Evaluation Summary

- Wool Fiberglass Glass

- Melting Furnace Control Options

Potential Control Option (in addition to current DEP or fabric filter)

Option 1 Option 2 Option 3 Option 4 Option 5 Option 6 Option 7 Option 8

Capital Costs Caustic

Scrubber Venturi

Scrubber HEPA

Filter 3

- Stage

Filter 3

- Stage

w/H2O Clean Membrane

Baghouse 1 Furnace Life

Cycle 2 Replace

Cullet 3

A = Total Eqmt 699K 699K 266K 354K 1,180K 262K

--- ---

B = Direct Install 391K 391K 149K 198K 188K

--- ---

C =Indirect Install 245K 245K 93K 124K 47K 112K

--- ---

TCI = A + B + C 1,335K 1,335K 507K 676K 1,227K 568K 10 ,000K

--- Operating Costs

Direct Annual 249K 449K 264K 264K 291K 264K

--- ---

Indirect Annual 247K 247K 139K 161K 233K 170K 2 12K

---

Total Annual Cost (per furnace) 496K 695K 403K 425K 524K 434K 2 12K 358K

Cost Effectiveness per lb Cr 4 1.1

– 55K

3.2K (avg) 1.6

– 77K

4.5K (avg) 0.9

– 45K

2.6K (avg) 1.0

– 47K

2.7K (avg) 1.2

– 58K

3

. 4K (avg) 1.0

– 48K

2.8K (avg) 0. 5

– 2 4K

1.4 K (avg) Unknown

1 Based on cost spreadsheet used for Portland Cement rule changes (2010) and amendments (2012) ; membrane bags added to existing baghouse

.

2 Based on “net present value” approach using the following assumptions: 1) furnace rebuild cost = $10M; 2) normal furnace lif e cycle = 10 years; 3) Cr complaint life cycle = 7 years; and 4) industry interest rate = 5%. Example

– the company initially con siders the cost of replacing the furnace lining (Cr refractories) in the 10th year (at a cost of $10 million). The present value (today) of the capital cost 10 years in the future is $10M / (1+r)^10 where r is the interest rat e. If the lining would instead be replaced in 7th year, the present value (today) of the same capital cost is $10M / (1+r)^7.

The incremental cost today would be computed as ($10M / (1+r)^7

- $10M] / [(1+r)^10]. This approximates the value to the company (today) of waiting to insta ll the lining additional 3 years. [$10M / (1.0 + 0.07)7

- $10M] / [(1.0 + 0.7)10] = [$10M / 1.6058

- $10M / 1.967151] = $1,144,005. Annualized cost = $1,144,005 x 0.1 8555 (OAQPS capital recovery factor) = $ 2 12K

3 Incremental cost based on a price dif ference of $6.81 per ton between batch raw materials with and without cullet; assumed 150 tons/day; 350 days/yr.

4 Cr reduction based on 3 potentially impacted furnace s : 435 lbs (K2) + 9 lbs (K1) + 20 lbs (DM1) = 464 lbs total. Average = 464 / 3 = 155 lb C r/yr.3

II. BACKGROUND

Glass

- melting furnaces at wool fiberglass manufacturing facilities are equipped with add

- on control technologies, including, but not limited to, electrostatic precipitators (ESPs) and fabri c filters that effectively control PM and most metal hazardous air pollutant (HAP) emissions. However, chromium emissions can vary sign ificantly between furnace types, furnace designs and over time. All of the control options evaluated for this project wou ld be in addition to the

current ESP or fabric filter.

As was noted in the NAIMA comments, some of the control options that were evaluated may or may not be effective in achieving the chromium compound emission limit and would have to be optimized with spe cific furnace parameters and operating conditions. This is particularly true for those furnaces with chromium emissions that increase over time with the degradation of the chromium refractory materials above and/or below the glass melt line.

In setting sta ndards, EPA does not typically specify how sources will comply with the promulgated standard or in other words how the emission limit will be met. Consistent with that approach, the proposed rule does not specify or mention any specific control equipment f or glass

- melting furnaces to meet the chromium emission limit. The information being presented here is not meant to suggest that each of the control options evaluated would work on any given glass

- melting furnace but is intended to show several potential o ptions that can be considered when developing a compliance strategy to meet the chromium compound emission limit.

III. Control Option s 1 and 2

– Wet Scrubbers

Costs for installation and operation of the following wet scrubbing designs were developed:

 Caus tic scrubber train (Option 1)

 Venturi scrubber train (Option 2)

The total equipment cost was estimated to be $592,200 for both types of scrubbers. Using the EPA Cost Manual, the total equipment purchase cost = $592,200 x 1.18 = $698,800. Total direct

inst allation costs for both scrubbers were calculated to be $ 391,326 and the total indirect costs were $ 244,579 for both types of scrubbers. Therefore, the total capital investment (TCI) was calculated to be $1,344,700 for both types of scrubbers.

Operating c osts are similar for the scrubbers except for electricity costs: Venturri scrubber

- $245,400/yr versus caustic scrubbers

- $45,779/yr. The total annual costs (TAC) were $ 464,000

.

For the three furnace

- specific application s identified at proposal , the cost of controlling chromium with wet scrubbing is estimated at between $ 1,100

– $ 77

, 0 00 per pound of chromium removed, depending on the device selected. The average cost effectiveness for the caustic scrubber (Option 1) , was estimated to be in the range o f $ 3,2 00 per pound. The average cost
effectiveness for a Venturri scrubber application (Option 2) , was estimated to be in the range of $4, 5 00 per pound.

As noted by NAIMA, “t hese high costs are largely due to the initial capital cost of not only the

contr ol device but also the related infrastructure and installation cost. In addition to similar4

requirements as dry filtration, a new hazardous waste stream is generated that must be treated and disposed of (i.e., wastewater). Unlike particulate collected fro m the DEP, the wet material collected from this system will be treated with chemicals and will be unsuitable for reuse in the furnace. There would also be significantly higher energy and environmental impacts resultant from the use of these systems. The d etailed cost calculations are provided as Attachment 1 of this

document. ”

IV. Control Options 3, 4, and 5

- Dry/Physical Filtration

As noted in the NAIMA comments, dust collectors, baghouses, ESPs, and similar devices are a form of dry/physical filtration already used in th e wool fiberglass manufacturing industry extensively. Emissions from the existing furnaces are already being reduc ed using these proven

controls. Other potential controls that were analyzed are listed below :

 3

‐ Stage filter consisting of a quench tower, coalescing pad and fiber bed filters. This custom design has the option of utilizing a water system to clean the fil ter media; otherwise, the filter media would need replacement on a more frequent basis.

 Series of inline high efficiency particulate air (HEPA) filters with water quench. This custom design would require changeouts at an unknown frequency.

Costs for instal lation and operation of the following dry/physical filtration designs were developed:

 HEPA filters (Option 3)

 3

- Stage filter (Option 4)

 3

- Stage filter with water cleaning (Option 5)

For the three furnace

- specific applications identified at proposal, the c ost of controlling chromium with additional dry filtration is estimated at between $900

- $58,000 per pound of chromium removed, depending on the device selected. The average cost effectiveness for a

furnace using HEPA filters to meet the proposed chromium emission limit is estimated to be in the range of $ 2,600 per pound. The average cost effectiveness for a furnace using 3

- stage filter is estimated in the range of $2 ,700 per pound. Finally, the average cost effectiveness for a furnace using a 3

- stage filt er with water cleaning is estimated in the range of $ 3

, 400 per pound.

As noted by NAIMA, “t hese high costs are largely due to the initial capital cost of not only the control device but also the related infrastructure and installation cost. The ongoing cos t of cleaning the filters and the cost to dispose of a new hazardous waste stream are significant. There would also be associated energy and environmental impacts resultant from use of the electricity to operate the system, as well as the transfer of this compound into either a wastewater stream or

a solid waste stream. ”

V. Control Option 6

– Membrane Baghouse

On the recent Portland cement project, the EPA evaluated the performance of fabric filters using membrane bag technology, generally considered the most efficient type of fabric filter.5

Membrane bags have superior performance to the cloth bags that are part of the standard fabric filter design. Cloth bags capture PM in the interstices of the woven fabric and form a primary dust cake. Until the primary dust cake forms

, cloth bags are inefficient as filters. Therefore, each time the bag is cleaned emissions increase until the primary dust cake reforms. Emissions also occur when the pressure drop becomes so high that the PM migrates through the fabric.

Me mbrane bags operate differently under the principle of surface filtration, i.e., the PM is captured on the bag surface. This results in more consistent performance (no need to build up a primary dust cake). In addition, at a constant airflow membrane bags reduce the average pressure drop across the fabric filter. However, membrane bags are more expensive than cloth bags. 1

, 2

The total equipment cost was estimated to be $262,000 for purchasing the membrane filters bags.

Total direct installation costs for t he membrane filers was calculated to be $188,000 and the total indirect costs were $112

, 000. Therefore, the total capital investment (TCI) was calculated to be $568,000 for membrane filters installed in an existing baghouse.

Operating costs are $264,000 ( direct) and $170,000 (indirect) . The total annual costs (TAC) were $ 434,000 (per furnace)

.

For the three furnace

- specific applications identified at proposal, the cost of controlling chromium with membrane filters is estimated at between $1, 0 00

– $ 48 ,000 p er pound of chromium removed. The average cost effectiveness for the membrane filters (Option 6), was estimated to be in the range of $ 2

, 8 00 per pound of chromium removed

.

VI. Control Option 7

– Reduced Furnace Life Cycle

Costs were estimated for facilit ies based on the assumption that those furnaces will have a shortened operational life cycle and be rebuilt (or replaced) earlier than they might have been otherwise. The associated costing of this reduced furnace life cycle scenario is referred to as the net present value (NPV) approach which is described in the EPA Air Pollution Control Cost Manual (EPA/452/B

- 02

- 001), January 2002.

For this cost analyses, the NPV approach us es the following assumptions:

1) furnace rebuild cost = $10 million ($10M) ; 2) normal furnace life cycle = 10 years;
3) Cr compliant furnace life cycle = 7 years; and
4) industry interest rate = 7 %. 3

The following example is provided to illustrate the net present value approach. A company
expects a furnace to last at least 10 years and they consider the cost of replacing the furnace
lining (Cr refractories) in the 10 th year (at a cost of $10 million). The present value (today) of the capital cost 10 years in the future is $10M / (1+r)^10 w here r is the interest rate. If the lining

1 Cement Americas ‘‘Optimizing Kiln Operations by Improving Baghouse Performance’’ November 2001, pp. 1

– 5.

2 Summary of Environmental and Cost Impacts for Final Portland Cement NESHAP and NSPS, August 2010

, Docket item EPA

- HQ

- OAR

- 2007

- 0877

- 0113.

3 7% interest rate is in accordance with OMB guidance under Circular A

- 4.6

would instead be replaced in 7 th year, the present value (today) of the same capital cost is $10M /
(1+r)^7

T he incremental cost today would be computed as :

NPV Incremental Cost = [ $ 10 M
( 1 + r ) 7 ]

− [ $ 1 0 M

( 1 + r ) 10 ]

Assuming an annual interest rate of 7%, the approximate value to the company (today) of
waiting to install the lining additional 3 years yields the following calculation:

NPV = [$10M / (1.0 + 0.07) 7 ]

– [ $10M / (1.0 + 0.07) 10 ] = [$10M / 1.6058 ]

– [ $10M / 1.967151]

NPV = $1

. 144 M

.

The capital recovery cost (CRC) is calculated by multiplying the NPV incremental cost by the
capital recovery factor (CRF):

CRC = NPV x CRF

Where CRF is defined according to the formula:

Using the 7

- year furnace life and a 7% interest (discount) rate, CRF = 0.18555 4 ; therefore, the

a nnualized capital recovery cost was calculated to be:

Annualized CRC = $1,144,005 x 0.1 8555 = $ 2 12K (per furnace)

It should be noted that the calculation using the NPV approach does not include any
improvements in productivity and energy efficiency, among other factors, resulting from
rebuilding a furnace, factors that would typically come into play when a wool fiberglass
company assesses the need for a furnace rebuild using this approach.

IV. Control Option 8

– Eliminate Cullet as Raw Material

The use of cullet as part of the raw materials going into the glass

- melting furnaces may (or may not) contribute to the chromium emissions coming out of the furnaces. Industry stakeholders stated that they would likely evaluate this as a possible control option because it would not

4 Table A

- 2: Capital Recovery Factors (from EPA Air Pollution Cost Manual, EPA/452/B

- 02

- 001, January 2002).7

involve any capital equipment costs or significant process changes. To avoid confidentiality

concerns, NAIMA provided generalized information for the overall industry regarding the cost of batch raw materials with and without cullet being included. The i ncremental cost difference

was $6.81 per ton between batch raw materials with and without cullet . For this analysis, we

assumed the furnace capacity to be 1 50 tons/day and operating 350 days per year

.

The total annual cost (per furnace) was calculated to be:

$6.81/ton x 150 tons/day x 350 days/ yr = $357,525.8



## A ttachment 1

Table A

- 1 shows the OAQPS multipliers to use in estimating the total cap ital investment (TCI)

for a scrubber installation.

Table A

- 1 . OAQPS Capital Cost Multipliers for Scrubbers 1

Capital Cost OAQPS Notation

Purchased Equipment Costs

Total Equipment Cost A

Instrumentation (e.g., PLC) 0.10 x A

Taxes/Tariffs 0.03 x A

Freight 0.05 x A

Total Purchased Equipment Costs B = 1.18 x A

Direct Installation Costs

Foundations and Supports 0.06 x B

Handling and Erection/Interconnection 0.40 x B

Electrical 0.01 x B

Piping/Ductwork 0.05 x B

Insulation 0.03 x B

Painting 0.01 x B

Total Direct Installation Costs C = 0.56 x B

Indirect Installation Costs

Engineering 0.10 X B

Construction and Field Expense 0.10 x B

Contractor Fees 0.10 x B

Start

- up 0.01 X B

Performance Test 0.01 x B

Continegencies 0.03 x B

Tota l Indirect Installation Costs D = 0.35 x B

Total Capital Investment $ TCI = B + C + D

1 U.S. EPA OAQPS, EPA Air Pollution Control Cost Manual ( 6th Edition)

, January 2002, Section 6, Chapter 2, page 2

- 48 (Table 2.8: Direct and Indirect Installation Costs for Venturi Scrubbers).9

Table A

- 2 shows the OAQPS multipliers to use in estimating annual operating costs.

Table A

- 2 . OAQPS Operating Cost Multipliers for Scrubbers 1

Operating Cost OAQPS Notation

Direct Annual Costs

Operating Labor (2 hr, per 8

- hr shift) E

Supervisory Labor F = 0.15 x E

Maintenance Labor (1 hr, per 8

- hr shift) G

Maintenance Materials H = 1.00 x G

Water Quench & Other Consumption I

Filter Media Replacement J

Solid Waste Disposal K

Electricity L

Total Direct Annual Costs DAC = E + F + G + H + I + J + K + L

Indirect Annual Costs

Overhead M = 0.60 x (E + F + G + H)

Administrative Charges N = 0.02 x TCI

Property Tax O = 0.01 x TCI

Insurance P = 0.01 x TCI

Capital Recovery Q

Total Indirect Annual Costs IDAC = M + N + O + P + Q

Total Annual Cost $ T A C = (DAC + IDAC)

1 U.S. EPA OAQPS, EPA Air Pollution Control Cost Manual ( 6th Edition)

, January 2002, Section 6, Chapter 2,

page 2

- 51 (Table 2.9: Annual Cost Factors for Scrubbers).