The Golden State is just that for many landfill-gas-to-energy projects, but with changing prices and complex regulatory demands, high-quality data to optimize LFGE projects is increasingly important and critical for project success.
Currently, California is the leading state in the nation by nearly double with 67 LFGE energy projects (Michigan is number two with 39 projects), or 10% of the US market by count, almost all of which produce electricity. It operates the most dynamic and evolving electric grids in the country, providing more opportunity—but also challenges—for LFGE producers. It also is one of the most complex regulatory states with no fewer than a half dozen sets of public-sector regulatory agencies affecting LFGE projects, all of which require data from project owners.
Natural gas still dominates California’s power generation capacity (see figure below), but renewables have been growing rapidly because of the state’s exceptional wind and solar profiles plus the rapidly falling costs to develop these projects. The result for LFGE projects is increased competition not only for the renewables slice of the power stack and accompanying incentives but also on price because of the near zero marginal cost of these generation assets driving down wholesale prices, as noted in this recent LA Times article.
California in-state electricity generation capacity by fuel type (nameplate capacity) (source: California Energy Commission, Aug 2016)
The various state agencies also create an overlapping mesh of regulations for that include:
- The Public Utilities Commission
- California Energy Commission
- California Environmental Protection Agency
- Nearly three dozen Air Quality Management Districts
- The Department of Resources Recycling and Recovery, and
- The California Alternative Energy and Advanced Transportation Financing Authority.
At the same time, they also provide economic incentives and several financial programs for LFGE projects, including the following:
- Feed-in tariff (FIT) (aka Bioenergy Market Adjusting Tariff (BioMAT)) for small (<3MW) renewable power systems;
- Renewable Auction Mechanism (RAM) for larger (=> 3MW) renewable power systems; twice per year reverse auction run by the three largest investor owned utilities, San Diego Gas & Electric, Pacific Gas & Electric; and Southern California Edison; and
- Renewable Portfolio Standard (RPS); 50% of retail sales must come from renewable sources by Dec 31, 2030 with interim targets each year.
As a result, the decisions facing LFGE owners have become increasingly complicated, starting with to whom and when do they sell power, should they feed base load or peak, how can they time dispatch without causing emissions issues, and which state incentives will they be able to access, for how long and at what cost of reporting.
All these are manageable with up front diligence and continued monitoring and optimization over the life of the project. Because much of the post-construction economics are driven by the quantity and quality of the project’s fuel—landfill gas—modern sensors and automation are increasingly part of the solution to help reduce costs and improve revenue. Loci has been providing both the data collection and insights to optimize landfill gas production across many sites in California and across the country. Please contact us for an initial consultation on how we can help your operations.