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Got Organic Waste? You’ve got gas potential which can be beneficially used Speaker: Dennis Fenn, SVP CoAuthor: Mike Michels, VP Cornerstone Environmental Group LLC 2012 Works – Blazing New Trails in Sustainability Dodge City, Kansas March 28 2012

Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

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Page 1: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Got Organic Waste?You’ve got gas potential – which can be 

beneficially used 

Speaker:Dennis Fenn, SVPCo‐Author:Mike Michels, VPCornerstone Environmental Group LLC

2012 Works – Blazing New Trails in SustainabilityDodge City, KansasMarch 28 2012

Page 2: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

BioGas to Renewable EnergyOutline

• Biogas basics

• Common biogas‐to‐energy (BGTE) technologies

• BGTE project feasibility ─ key issues to consider

• Financial pro forma for two BGTE plants

Page 3: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

BioGas Basics

Page 4: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Sources of Biogas

• Agriculture waste digesters

• Landfill gas systems 

• Wastewater treatment plant digesters 

• Organic/food waste digesters

Page 5: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

The Anaerobic Decomposition Process

CH4 + CO2 + Heat

Organic Acids (Acetic Acid)

CH3COOH

Methane Forming Bacteria

Acid Forming Bacteria

Organic Matter

“Waste”

50 to 65%        35 to 50%

Page 6: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Benefits of BioGas

• 24 x7 availability• Reduces America’s dependency 

on foreign oil• Less expensive than natural gas• Reduces use of coal fired power 

plants and their emissions• Inexpensive greenhouse gas 

emission reductions• Promotes better long‐term care 

of our environment

Page 7: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Typical BioGas Properties

Methane

Carbon DioxideN2 & O2

VOCs

Page 8: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

LFG  Biogas from Dry FermentersCH4 50 to 60% CH4 56 to 60%CO2 40 to 50% CO2 40 to 44%O2 0 to 1.5% O2 0 to 1%N2 0.5 to 5% N2 0 to 2%H2S Up to 1,500 ppbv H2S 300 to 400 ppm

Siloxane Up to 1,500 ppbv Siloxane < 10 ppbTrace Others <1%

Water 0.40%

Product BioCNG FuelCH4 88 to 96%CO2 0.2 to 1.0 %O2 0.0 to 1.0%N2 0 to 10 %H2S Non DetectSiloxane     Non DetectH2O Per CNG Requirements

Biogas Constituents

Page 9: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

• All Biogas sources have similar constituents

• Biogas treatment technologies can be applied to biogas from different sources

Biogas Constituents, cont’d

Page 10: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Typical Anaerobic Digester

BioGas

Solid fertilizer and/or bedding

Figures per 1000 dairy cows

Anaerobic digester system

Farm manure management operations

Manure

CH4(60%)

Nutrient‐rich liquid spread on crops

Manure Spreader

CO2(35%)

75 ft3/minute

Effluent

Common BGTE conversions

Page 11: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Map of Operational Farm Digesters (176)

Source: U.S. Environmental Protection Agency's AgSTAR Program As of December 2011, AgSTAR estimates that there are 176 anaerobic digester systems operating at commercial livestock farms in the United States.

Page 12: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Typical Landfill

BioGas

Average figures for 500 tons/day of MSW for 1 year

Anaerobic Landfill

MSW collection 500 TPD

CH4(55%)

CO2(40%)

effluent

Common BGTE technology

70 ft3/minute

Page 13: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Landfill Gas Reserve Modeling

• Typically using EPA LandGEM Model• Must have understanding of

– Fundamental inputs– Underlying assumptions– Potential inaccuracies

• Used to predict the amount of landfill gas (both quantity and quality) produced and collected

Page 14: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Biogas Modeling Challenges

• Organic inflow rates vary

• Organic quantity and composition varies

• Ambient temperature varies

• Moisture content varies

• Many others

Page 15: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

EPA’s LandGEMModel

Page 16: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Potential Landfill Gas Reserve Modeling Pitfalls

• The landfill’s size and capacity• The landfill’s expansion potential• Types of waste received historically and in the future (i.e. degradable waste types versus non‐degradable)

• Historic and future waste receipts• Landfill gas collection system coverage and efficiency both in the present and future

• Landfill gas quality

Page 17: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Permit Capacity – Project Impact

4 CAT 3520 

Engines

Additional 5 CAT 3520 Engines

Potential Expansion

Permitted

Page 18: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

LFG System Construction

Page 19: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Operational LFG‐to‐Energy Plants (558)

Page 20: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Common BGTE Technologies

Page 21: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Technologies Available to Beneficially Utilize BioGas

• Proven Technologies/ potentially economically feasibleo Engines and turbineso Boilerso Greenhouseso Soil remediationo Liquid evaporatorso Conversion to high BTU fuelo Vehicle fuel (CNG)

• Developing Technologies/ economically challenged

o Fuel cello LNGo CO2 purificationo Methanol production

Page 22: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Gas Cleanup Technologies• CO2 removal

– Water scrubbing– Solvent scrubbing– Carbon molecular sieves– Membranes/PSA– CO2 condensation (refrigeration)

• Hydrogen sulfide removal– Iron, carbon, biological, water scrubbing, NaOH scrubbing

• VOCs, Siloxanes and halogenated hydrocarbons– Carbon, chilling, CO2 condensation, polymers

Page 23: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

ENGINE GENSETS

Engine Gensets

Page 24: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Turbine Gensets

Page 25: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Biogas Heat RecoveryHospital Boiler 

Asphalt Plant 

Page 26: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Landfill Leachate Evaporator and Flare

Page 27: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Waste heat is also available

Engine GensetsExhaust Heat Recovery to Microturbines and Greenhouses

Page 28: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Vehicle Fuel From Biogas

Page 29: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

St Landry Parish, LA    BioCNG 50  February, 2012

BioCNG gas cleanup skid 

H2S removal unit

Fueling dispenser

Chiller and control panel

CNG storage vessels

Compressor to 4500 psig

Page 30: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Janesville, WI  ─ WWTP BioCNG 50 System, February , 2012

Fueling dispenser

Gas storage ‐ low pressure

WWTP digester

BioCNG equipment and microturbines in building

Gas storage ‐ high pressure

ANGI fueling compressor

Biogas chiller

Page 31: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case
Page 32: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

What Next?

Ford  2011 F350 CNG / Gasoline Pickup TruckDelivered to Dane County January, 2012 

Page 33: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Dane County Park Department NGV Vehicles, March 8, 2012

Page 34: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Example Companies Using Biogas

Page 35: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

BGTE Project Feasibility‐ Key Issues to Consider

Page 36: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Key Issues• Biogas availability/proximity to source• Biogas quantity/quality• Proximity to utilities

Power lines and inter‐connect issues/costsNG pipeline

• Local energy marketPower sales Power company Private energy user On‐site energy useNG sales to pipelineDirect sale of MBTU gasCNG vehicle fuel

Page 37: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Key Issues• Technology selection• Gas collection

Gas conditioning/cleanupEnergy conversionPower/reciprocal engines/turbines MBTU/direct use in boilersHBTU/pipeline qualityHBTU/CNG vehicle fuelOther

• Permitting – Local planning– Air– Solid waste– Wastewater– Fire Department

Page 38: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Key Issues• Agreements

– Biogas purchase,– power/gas/fuel sale

• Contracts– Equipment procurement,– construction/installation, – O&M, – ownership, – financing

• Location, Location, Location• Economics

– Capx, – O&M– financing– grants/incentives

Page 39: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

So Many Left to Develop

• ~510 landfills have a gas collection system but no energy project 

• Potential of 300,000 MMBtu/day or 1,070 MW 

• ~110 landfills have an energy project and excess LFG available 

• Potential of 78,000 MMBtu/day or 280 MW 

• ~950 landfills do not have a gas collection system • Potential of 220,000 MMBtu/day or 800 MW

Page 40: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case
Page 41: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Financial Pro Forma for TwoLandfill Gas to Energy Plants

• BioCNG• Electric Generation

Page 42: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

LFG Economics 101

• Capital cost

• O&M and interest

• Income/savings

• Tax credits or federal/state  subsidies

• Other opportunities: heat recovery, GHG, etc.

Page 43: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

System Sizing

System Size Biogas Inlet Flow (scfm)

Fuel Production(GGE/day)

Fuel Production(GGE/year)Approx.

BioCNG 50 50 200‐275 80,000

BioCNG 100 100 375‐550 160,000

BioCNG 200 200 775‐1100 320,000

Page 44: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

System Sizing

System SizeBiogas Inlet Flow (scfm)

Fuel Production (GGE/day)

Fleet Size Per Unit

Small Trucks

Large Trucks

BioCNG 50 50 200 ‐ 275 20 – 27 2 ‐ 4

BioCNG 100 100 375 ‐ 550 38 – 55 5 – 8

BioCNG 200 200 775 ‐ 1100 77 – 110 11 ‐ 17

Page 45: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Economic Considerations

• Biogas quality (>52% CH4 and < 5% N2 desired)

• Local demand for CNG fuel – your vehicles or others

• Alternative fuel tax credits, incentives, and grants

Page 46: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Example CapX for BioCNG 200

Cap X $ NotesBioCNG 200 $792,000  Gas compression, gas cleanup, etc.Winterization of the BioCNGsystem $105,000 

Fast filling station $364,000 

Includes compressor, dehy, 2 fuel dispensers, and 100 GGE of usable storage tanks. Note: 40% KS tax creditup to $100K may be available on total cost of fueling station. http://www.afdc.energy.gov/afdc/laws/law/KS/5171

Site design, installation, permitting, startup, training $182,000 

Total = $1.4 Million

Page 47: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

O&M for BioCNG 200

Cost Item GGE Operating Costs

Media and equipment replacements $0.32

Parasitic electric load for both the gas cleanup and the fueling station $0.25 

O&M Total (per GGE) $0.57

Assumes electric power purchased at $7 cents/kWh from the grid.

Page 48: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

BioCNG 200 Financial ProformaSummaryCost to Operate and Maintain BioCNG and Fueling Station = $ 0.57  per GGE

Cost to Finance = $0.60  per GGE (includes, finance charge, cap X, and services)

Subtotal $1.17  per GGE (during the finance period)

Federal Excise Tax $ 0.18  per GGE

State Road/Excise Tax $0.23  per GGE

Cost to Purchase Raw Biogas $    ‐ per GGE

Value of RIN's $(0.69) per GGE

Total $0.88  per GGE (during the finance period)

Page 49: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

• BioCNG can be cost competitive with other vehicle fuels (gasoline, diesel and CNG)

• BioCNG production $0.60 to $0.98 / GGE depending on biogas quality and quantity– Financing charges and RINs not included

• Potential for vehicle fuel credits– RIN (Renewable Identification Number) 

• Renewable fuel credit• Created by the EPA as part of the Renewable Fuel Standard (RFS) to track progress toward reaching the energy independence goals established by the U.S. Congress 

• Currency used by obligated parties to certify compliance they are meeting mandated renewable fuel volumes

– RINs ‐ The exact amount will depend on the project specific operating scenario and can be up to $1/GGE.

BioCNG Economics Lessons Learned

Page 50: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Electric Generation Financials

• Assumptions – base case• 2 CAT 3516A+ engines generating 925 kW each for 11 years

• Muni LF owner self‐develops with 10 year,5% bond financing

• $3.0 million capital cost• Section 45 tax credit not available• Online 95% of time• O&M 1.8 cents/kWh

Page 51: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Electric Generation Financials

• Assumptions – Base case (continued)• O&M escalates at 2% per year• PPA escalates at 2% per year• 7% of all electricity generated is used for plant parasitic load

• Enough LFG exists (at least 620 scfm ) to operate engines at capacity for 10 years

Page 52: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Electric Generation Financials• PPA of 4.2 cents/kWh in year 1 results in:

– Breakeven in 11 years with:• $7.2 million revenue• $3.4 million in O&M• $3.8 million in principal and interest

• PPA of 7.2 cents/kWh in year 1 results in:– $5.3 million profit in 11 years with:

• $12.5 million revenue• $3.4 million in O&M• $3.8 million in principal and interest

Page 53: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Electric Generation Financials

Sensitivity analysis

Scenario 1 2 3Sensitivity Analysis Best Case Base Case Worst Case

Capital Cost ($ MILLIONS) 2.8 3.0 3.41st year electric purchase price (cents per kWh) 7.20 4.20 4.20

Online time 98.0% 95.0% 95.0%1st year O&M cost (cents per gross kWh) 1.70 1.80 2.00

RESULTSProfit after 11 operating years $6 million Break even ($700,000)

Page 54: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Steps to Biogas To Energy Projects

• Determine LFG quantity• Conduct financial modeling• Obtain energy/fuel purchase agreements• Obtain permits• Design/construct• Operate

Page 55: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

• Feasibility studies• Permitting• Engineering and design• Air quality• Biogas systems• Construction management• Operations and maintenance

Key Services

Page 56: Got Organic Waste? - Cornerstone Environmental Group€¦ · O Per CNG Requirements ... Fast filling station $364,000 ... Electric Generation Financials • Assumptions –base case

Thank You!

• Contacts for more informationDennis Fenn630‐633‐5800 (office)312‐925‐8961 (cell)