What’s trending in landfill gas utilization?
In November 2014, I had the honor of sharing the podium with 140 of the country’s leading experts on LFG and leachate at the Environmental Research & Education Foundation (EREF) summit, called Leachate & Gas Management – Regulatory & Operational Perspectives. It was easily the best technical exchange combining LFG and leachate information I have attended in years.
My particular interest is in landfill gas utilization, especially electric power production, as well as high- and medium-BTU projects at landfills. Here’s my take on the challenges the landfill gas industry is facing, the effects of market drivers, and finally, my predictions on where landfill gas-to-energy (LFGTE) is headed. Keep in mind that this blog post focuses specifically about landfill gas and NOT biogas. The challenges and opportunities are not necessarily the same for biogas (for example, gas from wastewater treatment, gas from digesters (food waste, animal manures, organic wastes, etc.) I’ll cover the challenges and opportunities with biogas to energy in a future blog..
Landfill gas industry faces challenges
When it comes to trends in landfill gas utilization, the industry is up against some severe challenges. First of all, more recycling of paper and food waste means there is overall much less LFG generation nationwide than in years past.
Also, LFGTE projects are getting smaller because energy projects on the largest landfills have already been developed. Finally, landfilling rates have declined since the recession. This has reduced LFG generation below projections and raised doubts with some in the industry about the long term viability of LFGTE projects.
Market drivers in the last five years
In the last five years market drivers in the LFGTE industry have been changing, especially in the areas of “zero waste,” federal tax credits, renewable portfolio standards, renewable fuel standards, natural gas pricing, gasoline and diesel pricing, and low carbon fuel standards. Here’s a list of some specific challenges and market drivers we all face:
- Low carbon prices everywhere except California
- Renewable portfolio standard (RPS) overcapacity in most states
- No more American Recovery and Reinvestment Act (ARRA) funds
- Investment tax credit (ITC) and production tax credit (PTC) only for projects that started construction before 12/31/14
- Organics diversion from landfills
- Low natural gas prices at $3- 5/MMBTU
- Abundant natural gas
- Zero waste initiatives = less need for landfills
Where do we go from here?
First of all, I believe that the newer Renewable Fuel Standards (RFS2) will create more development of landfill gas-to-BioCNG fueling.
The likely effects of the growing movement towards banning food/organic waste in landfills is also going to increase biogas-to-energy via digesters (not landfills) and lower landfill gas generation over the long-term.
Finally, the California market conditions, i.e., high price of carbon, high price of gasoline and diesel, poor air quality, and other market drivers, will bring more gas from landfills located outside California into the California market borders via injection into natural gas transmission lines. Did you know that clean landfill gas injected into a natural gas transmission line in Illinois, or any state, can be used in California? Yes, if cleaned gas injected into the grid in a non-California location can be removed from the grid in CA, with the associated green gas benefits.
Here are my specific predictions of landfill gas-to-energy and other emerging biogas trends.
- Increasing # of high BTU (HBTU) projects starting up every year – RFS2 is really driving this opportunity as it is allowing some LFG owners to collect more than $25/MMBTU for their gas!
- Fewer # of medium BTU (MBTU) projects starting up per year – These types of projects are few and far between, requiring a 24/7 user located within a reasonable distance from the landfill – let’s face it, there are just not that many of these opportunities. Also, considering the low cost of natural gas (landfill gases’ competitor), it is difficult to make the economics work for most of these types of projects.
- Declining # of electric generation projects – While a few states and islands have terrific power buyback arrangements, this is certainly limited. As such, I believe we will see fewer LFG to electricity project startups going forward. Unless power utility specific renewable portfolio requirements get increased, most utilities have met their quota and will continue to offer very low rates for power purchase.
- More food/organic waste diversion and gas from anaerobic digesters. This opportunity is happening today in California, Connecticut, and a few other locations. I believe this trend is just starting and will continue to grow and grow as more cities, counties, and states jump on the food/organic diversion movement.
On a final note, the EREF conference got me thinking about two areas of focus in the coming months and years. First of all, the need for leachate pretreatment is growing quickly, and secondly, LFG/air regulations are getting much stricter. More on those two topics in a future blog.
Do you have any other thoughts on where landfill gas utilization is headed?
Mike Michels, PE, is a co-founder of Cornerstone Environmental Group, LLC and BioCNG, LLC, and has 35 years of experience focused on solid waste systems.
Categories: Alternative Energy, Biogas and Landfill Gas, Organics, Solid Waste
Posted By Michael Michels, PE at 8:00 AM | 2 Comments on What’s trending in landfill gas utilization?
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