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January 1, 1998
The ground rules are changing. Federal tax credits are ending, the electricity market changes are pending and new regulations all are sending landfill owners and developers a new message: creativity is now required for structuring landfill gas-to-energy (LFGTE) projects.
Three main trends are evolving: * Communities are becoming more directly involved in driving LFGTE project development, forging innovative partnerships, locating new revenue sources and promoting their projects to the public.
* Project developers and financiers are discovering new revenue sources to assist them in financing projects.
* Exciting new LFGTE technologies, such as leachate treatment using LFG, pipeline-quality gas upgrades and more efficient electricity generation, are becoming more cost-effective and thus, more profitable.
How are new projects being creativity created? Ask Saratoga Springs, N.Y. and Tucson, Ariz., two communities that have taken matters into their own hands to drive LFGTE project development.
A Cool New York Story When the city of Saratoga Springs, N.Y., began closing its 44-acre landfill in 1993, it discovered that it was generating a significant amount of LFG, which was beginning to migrate underground to adjacent properties.
Unusually large LFG amounts were being generated from a particular 24-acre section that had accepted municipal solid waste, along with a significant amount of stable wastes from nearby horse racing tracks.
What were the city's options? Its department of public works (DPW) hired Clough & Associates, a local environmental engineering company, who sought a partner that would underwrite the capital costs of the gas collection system in return for a share of the profits from the energy recovery.
The idea was to sell the LFG to a utility to generate electricity. Unfortunately, this idea was grounded when it was discovered that, as a result of recent payment structure changes, the local utility could not pay more than 2.5 cents per kilowatt-hour of electricity generated by the project. (Typically, LFGTE projects which generate electricity need to receive at least 4 cents per kilowatt-hour to be profitable.)
Meanwhile, the city, needing to control LFG migration, implemented the approved closure plan. The gas wells acted as a passive venting system, which allowed LFG to escape easily rather than travel underground.
A deep LFG well system was selected because it could easily be converted to an active gas collection system which uses a vacuum to draw on the wells in the event that passive venting proved to be ineffective, says Clough Project Manager Frank La-Vardera.
Following the vents' installation, however, LFG bubbles began appearing under the landfill's final cap and thus, active collection was needed.
While DPW and Clough were struggling with these issues, the city announced plans to relocate the municipal ice skating rink to an area directly across the street from the landfill. The DPW seized this opportunity, and asked Clough to perform a feasibility study on installing a pipeline to transport LFG to the ice rink for thermal use.
Using demand meters, the rink was monitored over a period of several months to gauge its energy needs. Then, using computer modeling and data from LFG monitoring, Clough predicted that the landfill could supply enough energy to meet 85 percent of the rink's electrical needs as well as all of its thermal energy needs for the next 15 years.
Clough estimated that the project would cost approximately $1.1 million, but would provide an annual savings of approximately $50,000. Given the city's need to control LFG and this opportunity to save money through LFGTE, the DPW decided to build the "LFG-to-ice" system, which has been operating since the fall of 1997.
The project already has proved to be a success beyond expectations. The landfill currently supplies almost all of the energy needed by the rink. LaVardera believes that this is due, in part, because the landfill had not yet reached its peak LFG generation at the time of the original feasibility study.
It is encouraging to see the city's landfill "serve as a benefit to the community, rather than being viewed in a negative light," says DPW Director Joseph O'Neil.
The system is expected to remain operational for at least the next 15 years. And as LFG generation declines, the rink will switch gradually to natural gas as its primary fuel.
Striking Gold in the Desert Similar to Saratoga Springs, the city of Tucson, Ariz., faced the problem of controlling LFG migration at its municipal landfill. And like Saratoga Springs, the city sought a LFGTE project developer that would pay the capital costs for the project's construction and share the royalties.
However, according to Chris Leverenz, the city's landfill administrator, "given that rainfall plays an important part in the decomposition process, there was some doubt that a landfill in the desert would be able to produce enough methane for such a venture to be profitable."
A number of small-scale feasibility studies were performed over selected portions of the landfill, using data collected from the LFG migration control system that was already installed.
These studies produced a wide range of estimates for the amount of gas the landfill could produce: "Most private-sector project developers were simply not interested in taking a risk [in developing the project] where estimated methane production from our landfill was so uncertain," Leverenz says.
Refusing to be deterred by these early disappointments, the city continued its investigations. It reached an agreement with Connecticut-based Zahren Alternative Power Co., (ZAPCO) who will build a LFGTE project at no cost to the city on the condition that if the landfill fails to produce enough methane for the project to be profitable, the city will buy the project back.
Currently, ZAPCO is working on an energy purchase agreement with Tucson Electric Power (TEP), a local utility company which operates a power plant about three miles from the landfill. ZAPCO's job will be to pipe landfill's LFG to the power plant for use as a supplemental fuel in the coal-fired boilers that TEP uses to generate electricity.
This teaming arrangement appears to be a win-win-win situation for ZAPCO, TEP and the city of Tucson.
ZAPCO's risks for developing the project have been shared with the city; TEP can reduce the amount of coal it burns at the power plant (and its emissions) and the city has found a low-cost (possibly no-cost) means to control LFG migration.
"Even if the landfill fails to produce enough gas for the gas-to-energy project to be profitable, the total cost to the city [for reimbursing ZAPCO] will still be less than if we had to install the gas collection system ourselves," Leverenz notes.
Although the project is still in its early stages, the system will be constructed and operational by June 1998.
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