How to develop a landfill gas-to-energy project.
With the growing emphasis on finding renewable sources of energy and decreasing the country's dependence on foreign sources of energy, interest in landfill gas-to-energy (LFGE) projects is at an all-time high.
The first LFGE facility opened in 1977. During the past couple of decades, most LFGE projects have had to rely on alternative fuel tax credits or some other form of economic support beyond energy sale revenues to succeed. Today, there are the federal Section 45 tax credits and Clean Renewable Energy Bonds (CREBs), as well as state renewable portfolio standards (RPS), which increase the demand for and price of renewable energy, and programs that reward the reduction of greenhouse gas (GHG) emissions. All of these programs can enhance the value of landfill gas and its potential energy products.
Couple these financing mechanisms with the increasing interest in going green, and you have a perfect storm for LFGE facilities.
An LFGE project consists basically of an extraction wellfield and collection system that takes gas from the landfill and delivers it to a processing/conversion facility, which converts the gas into a usable form of energy. Electricity generation is the most popular end-use — as well as one of the simplest — but landfill gas also is used as a lower-grade substitute for natural gas in boilers and furnaces at industrial facilities. The gas can be made suitable for injecting into a natural gas pipeline and can even be converted into compressed natural gas (CNG) or liquefied natural gas (LNG) for use as vehicle fuel. The complexity of the processing and conversion technologies can vary and will depend upon the selected end-use.
So, if you want to develop an LFGE project, how do you do it? Historically, most landfill owners have signed a gas utilization agreement with a third-party developer selected through a request for qualifications (RFQ) and/or a request for proposal (RFP) process. The developer then takes care of all aspects of project development and operation, and provides some sort of remuneration to the landfill owner. This remains the most common development path, but more and more projects are being developed by the landfill owner or the energy end-user.
Examples in which different parties invest in different components of the LFGE project also are cropping up with increasing frequency. For example, the landfill owner may invest in and operate the wellfield and collection system. He then might sell the raw gas to a developer or end-user, who then processes the gas and converts it to usable energy.
Though there are many ways to implement an LFGE project, there are some basic steps common to all projects. This article will outline the steps for developing an LFGE project and also evaluate the advantages and disadvantages of self-development versus using a third-party developer.