new environmental market revenue opportunities for biogas
TRANSCRIPT
New Environmental Market Revenue
Opportunities for Biogas Projects
Peter Weisberg
Biocycle Portland OR
April 18, 2012
Renewable Energy Certi!cates
Renewable Identi!cation Number
Nutrient Management Carbon Credits
Methane Avoidance Carbon Credits
Avoided Methane Carbon Credit Projects that digest eligible feedstocks and combust biogas can
earn carbon credits for avoided methane. Eligible feedstocks:
1) Livestock manure, 2)Post-consumer food waste, 3)Agro-Industrial waste previously managed in an anaerobic lagoon.
Avoided Methane Carbon Credit 2,500 cow digester
generates ~3.5 credits per cow per year or 8,750 credits per year
Carbon price Voluntary $4.00
Pre-Compliance$8.50
Compliance $15.00
Average Annual Net Revenue
$25,000 $64,000 $120,000
Net Present Value (10 years, 7%)
$163,000 $440,000 $840,000
% of Capital Cost (~ $2.1 million)
8% 20% 40%
$5
$6
$7
$8
$9
$10
$11
$12
$13
$14
$15
Oct 1, 2011 Nov 1, 2011 Dec 2, 2011 Jan 2, 2012 Feb 2, 2012 Mar 4, 2012
Livestock Digester Carbon Credit Prices California Compliance Offset Climate Action Reserve Livestock Credit
Renewable Energy Certi!cates (RECs)
Renewable Energy Certi!cates
Projects that generate electricity can sell RECs.
Barrier: Washington Renewable Portfolio Standard does not allow RECs from projects that also sell
carbon credits.
$ Renewable
Identi!cation Number
$ Nutrient
Management Carbon Credits
Trends Rapid increase in natural gas supply is causing natural gas
and therefore electricity prices to fall.
Biogas = Advanced Biofuel (50% fewer GHGs, no corn)
Renewable Fuel Standard 2
Biogas to Transportation Fuel
Renewable Identi!cation
Number
Projects that clean and compress biogas into transportation fuel can earn Renewable Identi"cation
Numbers.
RIN Ownership
Renewable Identi!cation
Number
Gas Price +
Green Premium?
RINs are owned and sold by the entity that compresses the gas and fuels the vehicles.
Biogas RINs
• 77,000 BTUs = 1 Advanced Biofuel RIN • Advanced Biofuel RIN prices: – Current: $0.74/RIN (equivalent to $9.61/MMBTU) – Projection:
• Tillamook County mortality study: $0.50/RIN • Oregon Waste Water Treatment Plants study: $0.20/RIN • ~$0.25/RIN (equivalent to $3.25/MMBTU)
Biogas RINs 5,000 cow digester with signi"cant co-digestion à 158,341 MMBTU of biogas fuel/year
RIN Price Worst Case $0.02/RIN
$0.26/MMBTU
Projection $0.25/RIN
$3.25/MMBTU
Current Price $0.74/RIN
$9.61/MMBTU
2014 Net Revenue
$(10,282)
$460,000
$1.47 million
$-
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
$5.0
2014 2019 2024 2029
Mill
ions
Net Cash Flow
(Revenue - Operating Cost – Debt Service)
Retail Gas Price- $0.74/RIN
Retail Gas Price ($16.23/MMBTU)- $0.25/RIN
Commodity Gas Price- $0.74/RIN
Commodity Gas Price- $0.25/RIN
Electricity
Commodity Gas Price ($3.87/MMBTU)- No RIN
Nutrient Management
• 1% of applied nitrogen is released as N2O • N2O is a potent greenhouse gas – 298 times the global warming potential of CO2
• Removing nitrogen can earn carbon credits
$ Nutrient
Management Carbon Credits
N to N2O Emissions Factors: Regional non-linear
Domestic linear
Nutrient Management • Nutrient recovery that includes ammonia stripping
can capture half of the nitrogen in manure before it is applied to "elds – Before recovery: 8 lbs N/1,000 lbs of manure – With recovery: 4 lbs N/1,000 lbs of manure
• 5,000 cow dry lotà 1,280 metric tons of nitrogen not applied to nearby "elds – Simpli"ed Tier 1 Linear Emissions Factor à – 8,800 metric tons carbon dioxide equivalent reduction
Nutrient Management • 5,000 cow dry lot, • 1,280 metric tons of N reduction, • 8,800 mt CO2e carbon credits
Carbon Price Voluntary
$3/credit
Pre-Compliance $8.50/credit
Compliance
$15/credit
Net revenue in 2014
$16,500 $65,000 $120,000
