To gain perspective on the ways to build a landfill gas-to-energy (LFGE) facility, this article examines a landfill owner who self-developed a project, an end-user who is self-developing a project, and two landfill owners who implemented projects with third-party developers.
A brief summary of each of these four facilities is presented below:
DeKalb County Sanitation District, DeKalb County, Ga.
The DeKalb County (Ga.) Sanitation Division (DCSD), which provides comprehensive integrated waste management services, self-developed a 3.2-megawatt (MW) LFGE facility at its Seminole Road Landfill in Ellenwood, Ga. The project was spearheaded by Billy Malone, assistant director of DCSD.
Malone initially tried to develop this project in conjunction with a third-party developer, but they were unable to make the project economics work at the sales price that Georgia Power would pay. A landfill gas expert, Malone, with the support of the DCSD, developed the project. In doing so, he and the DCSD performed all of the project development steps outlined in [insert final article title] and then selected SCS Energy as the engineering, procurement and construction contractor for the project. The facility began operating in October 2006.
When asked about why he chose to develop the project himself, Mr. Malone cited four primary driving factors: the project would not work economically with a developer needing their return on investment; DCSD would receive greater financial benefit through self-development; DCSD's primary concern at the landfill is maintaining compliance, and the division was reluctant to concede control over any aspect of the site's operation to a third party; and DCSD saw a great value in doing this project. The county believed in its environmental benefit and has generated lots of positive publicity with it.
Flathead Electric Cooperative, Kalispell, Mont.
Flathead Electric Cooperative (FEC) provides electric service to Flathead County, Mont., and Libby, Mont. The state recently enacted a renewable portfolio standard (RPS) that requires investor-owned utilities to produce 15 percent of their energy from renewable resources by 2015.
As an electric cooperative, FEC is not required to meet the RPS standard. However, the cooperative's board and management decided to look at options to increase their portfolio of renewable power anyway. After looking at numerous options, they realized they had an abundant source of renewable energy at the Flathead County Solid Waste District's Flathead County Sanitary Landfill.
FEC won the utilization rights to the landfill gas through a competitive procurement process, and is developing a 1.6-MW LFGE facility at the landfill. The project uses Clean Renewable Energy Bonds (CREBs) for funding and currently is being constructed through an EPC contract with SCS Energy. "After looking at all of the options, it just made sense for the FEC to own and operate the LFGE facility ourselves," says Ross Holter, FEC's director of energy services. Operations are slated to begin in spring 2009.
Cumberland County Improvement Authority, Millville, N.J.
The Cumberland County Improvement Authority (CCIA), Millville, N.J., owns the Cumberland County Landfill. CCIA decided to implement an LFGE project through a third-party developer, and after issuing a request for qualifications (RFQ), it retained SCS Engineers to help select a developer.
Developers who responded to the RFQ were ranked, and several of the firms were then sent a request for proposal (RFP). As is typical in an RFP process for an LFGE project, the proposals received outlined various structures for revenues and other benefits to be conveyed to the authority. To assist in the overall evaluation, an economic model was developed to compare cash flows and net present value of the potential benefits to the authority. Ultimately, CCIA selected PPL Distributed Generation, which developed a 6.4-MW LFGE facility that began commercial operation in November 2008.
"It was a good process," says Jim Rocco, assistant engineer at CCIA. "We feel that with the help of our consultant in negotiations that we got a good deal and a partner in PPL that brought great expertise to the project."
Republic Services, Scottsdale, Ariz.
Republic Services recently merged with Allied Waste Industries to form a Phoenix-based company that has more than 200 landfills nationwide. Republic has nearly 70 LFGE facilities operating on its landfills with another 20 in the permitting phase or under construction. To date, most of these projects have been implemented with third-party developers, but Tim Ralston, senior manager of renewable energy development for Republic, says the company does see value in self-development if the return is there.
Ralston has significant experience dealing with third-party developers at many of these sites and offers the following thoughts:
- It is very important to select a developer that is very experienced and financially secure. "Are they financially strong and diversified?" he asks. "Do they develop the projects they sign up for and commit to, or do they have a history of flipping them to others after the contracts are signed?"
- The landfill owner should not relinquish ownership of the gas extraction wellfield and collection system. This will help maintain better compliance control and reduce conflict.
- The landfill owner should make sure the ownership and deal structure of all of the value streams (energy value, carbon reduction value, etc.) of the landfill gas are clearly and thoroughly defined.
- The contract should clearly define milestones and deadlines that the developer will be required to adhere to.
- The landfill owner should make the contract easily terminable for any breach of contract; and
- Contract assignment should be a major concern. "The landfill owner should make sure that the contract is not assignable without their permission, and they also should have first right of refusal to purchase it themselves," he says.
Return to the main story, "Light It Up: How to develop a landfill gas-to-energy project".
Steven M. Hamilton is a vice president of SCS Engineers. He is based in the firm's Santa Rosa, Calif., office.