At the intersection of renewable energy mandates, carbon regulation, economic growth and legacy infrastructure lies a potential boom for producers of bio natural gas (BNG).

It’s known by names like bioSNG, renewable natural gas and biomethane, but as a biologically-created renewable compound chemically similar to commercial fossil-based

natural gas, BNG is poised to make an impact on the energy market.

As a drop-in replacement for natural gas, the biggest impact of BNG could be on its green energy brethren—traditional intermittent renewables like wind and solar. For if renewable energy can be bought and piped from the gas company, why build expensive solar and wind farms?

This report examines BNG’s addressable market, applications, advantages and drawbacks and identifies emerging BNG companies worldwide.

It also makes specific recommendations for utilities and large corporations, investors, entrepreneurs, natural gas companies, feedstock suppliers and others.

REPORT INCLUDES

• The important distinction between bio natural gas and gas from anaerobic digestion and landfill gas

• Market opportunity sizing

• Advantages

• Challenges

• Competition

• Profiles of leading players

• Recommendations

ALSO FEATURES

• Economic analysis of bio natural gas vs. other energy sources

• Identification of 16 leading companies

• Analysis of feedstocks,

including agricultural waste, municipal wastewater, municipal solid waste and forestry biomass

ESSENTIAL FOR

• Utilities and large corporations pursuing renewable baseload power

• Investors

• Anaerobic digester and landfill gas equipment vendors

• Entrepreneurs

• Service providers

• Industry associations

May, 2011

53 pages

25 tables, charts & figures

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The Bio Natural Gas Opportunity How a new bio-based natural gas could help utilities develop baseload renewable power

“Its positioning could be dead-center of the energy world’s sweet spot: a fungible, renewable fuel that moves and burns like natural gas.”

-From the report

KACHAN & Co.

TABLE OF CONTENTS

cleantech analysis and consulting

INTERVIEWS & SOURCES

• 16 emerging BNG technology vendors

• 12 utilities, incl. PG&E, Sempra, Emera Energy Services, National Grid, all within RPS compliant regions

• Regulators CAISO, California Public Utilities

Commission, Nova Scotia Department of Energy, other federal, state, provincial and sub-state regional regulators and program managers

• 6 financial services firms & portfolio managers,

ABOUT THE AUTHOR »

Trevor Curwin is a frequent cleantech contributor for CNBC.com and other NBC Universal outlets, and environmental reporter for tech blog DVICE.com. He also writes for other media outlets, including The Examiner newspapers, Earth2Tech.com, Environmental Finance, and Sustainable Industries. As a consultant, Trevor has helped several cleantech startups with market research and positioning, focused especially on utility-scale renewables. Prior, he worked on strategic marketing and capital formation in alternative

assets for Bank of America.

“BNG, as used throughout this document, must be of a high enough quality to be combusted in any system that would use fossil fuel natural gas (including utility-scale power plants), injected into natural gas pipelines for transportation, and compressed in LNG/CNG forms for transportation fuels.”

- From the report

incl. Deutsche Bank’s Climate Change Advisors group

• Research entities EPRI, the Gas Technology Institute, plus 5 universities/centers of excellence

• 62 interviews total

Executive summary ............................................................................................................................... 5

What bio natural gas is and isn't ........................................................................................................... 6

Markets and total addressable market size ......................................................................................... 12

Anaerobic digestion ........................................................................................................................... 12

Biomass gasification .......................................................................................................................... 14

Policy support .................................................................................................................................... 19

Supply side analysis ........................................................................................................................... 21

Demand side analysis ....................................................................................................................... 25

Comparative analysis versus other energy sources ............................................................................ 28

On-site electricity generation versus pipeline injection .................................................................. 29

Feedstock transportation costs ........................................................................................................ 30

Impact of carbon policy ..................................................................................................................... 31

Advantages of bio natural gas ............................................................................................................. 32

Potential challenges of bio natural gas ............................................................................................... 34

Competition ......................................................................................................................................... 36

Intermittent renewables (wind & solar) ........................................................................................... 36

Existing biomass power generation technologies ............................................................................ 36

Leading player profiles ........................................................................................................................ 38

Renewable natural gas from biomass .............................................................................................. 38

Biogas upgrading (landfill gas, anaerobic digester gas) ................................................................... 41

Recommendations ............................................................................................................................... 43

Utilities & large corporations ........................................................................................................... 43

Investors ........................................................................................................................................... 44

Entrepreneurs ................................................................................................................................... 44

Natural gas companies ..................................................................................................................... 45

Regulators and government agencies .............................................................................................. 45

Feedstock suppliers .......................................................................................................................... 46

Conclusions ......................................................................................................................................... 46

Methodology & bibliography ............................................................................................................... 47

Appendix 1: Types of gasification technologies .................................................................................. 49

Appendix 2: Types of AD designs ....................................................................................................... 50

Appendix 3: Analysis assumptions ..................................................................................................... 52

Abbreviations and Conversions ........................................................................................................... 55

Executive summary ............................................................................................................................... 4  The basics: How it works ...................................................................................................................... 5  

Pressure-Retarded Osmosis (PRO) ................................................................................................. 5  Reverse Electrodialysis (RED) ......................................................................................................... 6  

Advantages: Why it appears worth pursuing ........................................................................................ 6  Potential challenges ............................................................................................................................... 8  

Membrane ........................................................................................................................................ 8  Cost ................................................................................................................................................. 10  Environment .................................................................................................................................. 10  Commercial risks ............................................................................................................................. 11  

Player profiles ....................................................................................................................................... 12  Recommendations ................................................................................................................................ 15  

Investors .......................................................................................................................................... 15  Entrepreneurs ................................................................................................................................. 15  Utilities and large corporations ...................................................................................................... 15  

KACHAN & Co.

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