DTE Vantage Has Standout Year for RNGDTE Vantage Has Standout Year for RNG

DTE Vantage, a subsidiary of natural gas and electric utility DTE Energy, is closing on one of its busiest years in the renewable natural gas (RNG) space. In the past several months the company landed a wastewater biogas project in Dayton, Ohio and inked a dairy contract in Upstate New York.

These two agreements bring the Michigan-based operation’s portfolio to 15 RNG projects across eight states.

The addition of the Dayton venture—the latest deal and first wastewater biogas project—has been a unique opportunity. It happens that one of Vantage’s landfill-based RNG facilities is just two miles from Dayton’s Water Reclamation facility. So, bringing this new feedstock over was relatively simple and cheap, done by laying a two-mile pipeline between the two operations.

While Dayton gets revenue from gas sales, Vantage feeds its plant, which had plenty of excess capacity. The gas supply was falling as one of the two landfills the operation pulled from for years had shuttered.

The RNG processing facility can make up to 3,125 standard cubic feet per minute (scfm) of gas, which can produce 700,000 to 800,000 MBtus (British thermal units) of RNG.

“But we were only collecting half of that from the active landfill,” says Kevin Dobson, vice president of biomass, DTE Vantage.

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“The excess capacity has enabled us to bring in Dayton’s wastewater biogas –400 scfm or 100,000 MBtus. We will be able to increase the RNG we produce by about 30 percent. So, it was a nice opportunity to take advantage of [feedstock] from a nearby operation to maximize production of a 20-year project with another 20 years of life ahead of it,” he says.

What made the partnership attractive to the city of Dayton was the environmental benefits—reduced emissions— and the financial piece—the digester gas it sells is worth more than the natural gas it purchases, says Patrick Ludwig, senior engineer, City of Dayton, Department of Water Division of Water Reclamation.

Dayton estimates its net revenues from the RNG project at about $800,000 annually.  The monies will be used for continued improvements at the Water Reclamation Facility.

With a few plant modifications the biogases can be blended, which comes with more benefits to the project.

Wastewater-derived gas is cleaner and it’s richer, with a methane content of about 60 percent compared to landfill gas’ roughly 50 percent. An added plus is the new feedstock is a steady, incoming stream, able to compensate for fluctuations that may happen on the landfill side.

“If there is a problem with the gas collection system that could impact the quality or quantity of landfill gas, or if there is downtime for maintenance, this helps us ride through it. And a cleaner gas with higher methane content means less processing to get to 99 percent methane to meet third-party pipeline specs,” Dobson says.

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It’s not every day a chance comes by to meaningfully pump business without having to invest in much more than a short pipeline connecting nearby operators. The location advantage was a windfall.

Location is a key driver in most of the project developer’s investment decisions, which explains a market presence from New York to Texas and a few spots in between. These may seem like randomly scattered dots on the map, but there was nothing random about the decision to move into these geographical markets.

The company landed in Wisconsin and now in Upstate New York to tap into the large inventories of dairy farms, a growing sector in the RNG space.

Expanding to the Houston Texas area, now home to two of its landfill RNG projects, made a good business case as it is one of the country’s largest metropolises. The thinking was there will be plenty of biogas to clean up over the next 20 or 30 years. And 20-plus years has been a sweet spot for these projects.

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Like most businesses, Vantage goes where it finds economy of scale. 

Do sites have the capacity to produce enough biogas volumes for the project to work economically over the long haul?  Otherwise, are they close to other existing projects to enable resource sharing?”

Vantage’s start was in gas-to-energy projects decades ago, producing power to fuel operations at a landfill. Over the next 20 years more electric generation projects came online, along with the first landfill gas-to-RNG work. 

An emerging vehicle fuel market sparked a growth spurt around 2017. RNG demand was gaining momentum to support the Renewable Fuel Standard program, a national policy that requires parties to replace a certain volume of fossil-derived fuels with renewables.

Vantage figured the timing was right to take another leap; that’s about when the Houston landfill gas-to RNG projects launched, along with the first dairy manure projects.

“Over the past five or six years we have really accelerated development to get to where we are today. We continue to have an aggressive growth strategy,” Dobson says of the company that is among only a few to take on both landfill and dairy RNG projects rather than one or the other.

Diversifying has required adaptability on multiple fronts, with the most significant from Dobson’s observations being around economics and relationship-building.

Dairy projects generate substantially less biogas so making it work economically can be tricky.

“It’s harder, but we do it. Sometimes it means scaling down technologies. Or consolidating operations of nearby farms and piping their gas to one processing facility,” he says.

The human side—dealing with stakeholders from very different business cultures—has been the real eye opener.

“With landfill projects we deal with Fortune 500 companies and municipalities. But on the dairy side it’s usually fourth or fifth-generation, small family-owned farms.

“Rather than back and forth emails, and working with legal and finance teams, you might work through a contract on the hood of a car out in a field. It’s more personal.

“So, one of our greatest learning experiences has been in understanding how to communicate with whoever it is we are dealing with,” Dobson says.

What’s next?  Vantage is partnering with hosts to build a few greenfield projects in various stages of development.

At the same time the company is exploring opportunities to upgrade existing landfill projects.

Says Dobson, “We are looking to potentially take some of our landfill projects where today we make electricity and convert it to make RNG.”