Facilitating Digester Development in Sacramento County

Transcription

1 Facilitating Digester Development in Sacramento County Marco Lemes Project Manager Energy Research & Development BioCycle 12 th Annual Conference on October 2012 Powering forward. Together.

2 Outline About SMUD Background Partnerships and Grants New Hope Dairy Digester Project Timeline Budget Permits Financing Warmerdam Dairy Digester Project Timeline Budget Permits Financing 2

3 About SMUD Publicly owned, non-profit electric utility serving the Sacramento County for over 65 years 5th largest electric utility in CA 6th largest municipal utility in US, 2nd in CA Overseen by an elected board of directors 2,113 employees (year end 2009) Service Area 900 square mile service area covering Sacramento County and a portion of Placer County 3,299 MW Record Peak (July 4, 2006) 595,000+ customers within a 1.4 million service area population 3

4 SMUD s RPS Program 4

5 SMUD s RPS Program 5

6 Biogas in SMUD s RPS 6

7 Biogas in SMUD s RPS 7

8 SMUD s IRP s Strategic Biogas Plan Biogas Energy Plan and Market Assessment Assess the potential for pipeline quality biogas in the Western US and to identify a plan for SMUD to address this market WWTPs, landfills, and dairy cattle manure digesters Set of recommendations: Influence legislators to repeal AB 4037 (landfill gas in CA pipelines) Extend current landfill contracts Look for opportunities for pipeline injection in CA Investigate upcoming long-term biogas opportunities outside of SMUD s territory possibly, no short-term need for SMUD s RPS Most recently, influence legislators and CEC on biomethane moratorium Market impacts and stranded investments

9 Biomass Technical Advisory Group BTAG December 2010 Coordinated effort with local stakeholders (project developers, consultants, regulators, academia, investors, customers, etc.) to increase the use of biomass in the Sacramento region for electricity generation Meet twice a year third meeting held recently New and potential projects updates Resource availability / feasibility studies Legislation - updates

10 Local Biogas Projects Dairy Digesters: Cal-Denier farmer owned; 65 kw; July 2008 Tollenaar Holsteins famer-owned; 212 kw; April 2009 New Hope (CRED) developer owned; 450 kw; Q Warmerdam (CRED) dev. owned; 600 kw; Q Mello -? kw; 2014(?) Waste Water Treatment Plant: FOG + Processed food waste into digester (CRED) Other Local Projects (SMUD to purchase power): American River Packaging food waste + refuse cardboard SATS food waste to electricity, transp. fuel and heat.

11 Background Partnerships and Grants In 2009, SMUD approached two local dairies, New Hope and Warmerdam, to propose development of digesters and onsite generation. Third-party project developers would fully finance, design, build, own and operate the projects in a lease agreement with the farmer. Partnerships with two developers: long term PPA under SMUD s FIT rates; purchase of GHG offsets; assistance with permitting and interconnection. In early 2010, SMUD was awarded $5,050,000 in grants from Department of Energy s (DOE) Community Renewable Energy Deployment (CRED) Program, under the American Recovery and Reinvestment Act (ARRA) for five local biomass projects. SMUD was also awarded an additional $500,000 form the California Energy Commission s (CEC) Public Interest Energy Research (PIER) program as cost share in Two of the CRED projects (one biomass one PV) did not succeed. Both dairy digester projects experienced changes in developers and technologies. 11

12 Dairy Locations 12

13 New Hope

14 Tank Digester

15 New Hope Project 1,200 milk cows The project would initially use a lagoon digester Farmers opted for an above-ground tank digester in order to have a more advanced system and minimize footprint SMUD was approached by a German developer who proposed to finance, build, own and operate the above ground tank system The project cost increased from $1.4m to $3.3m; however, biogas production increases substantially 15

16 New Hope - Timeline January 2010 SMUD receives notice of award from DOE July 2010 SMUD signs grant award contract with DOE September 2010 SMUD meets with DOE and developers October 2010 MT Energie takes over development July 2011 CVRWQCB s permit September 2011 ABEC signs lease agreement with farmer October 2011 SMUD signs subrecipient agreement with ABEC October 2011 Project kickoff Meeting with ABEC December 2011 ABEC secures 1603 Treasury Grant June 2012 PPA/IA executed Q Financing with lending institution to be secured; GHG offsets deal finalized; begin construction Q Start-Up 16

17 New Hope Project - Budget 17

18 New Hope - Permits Manure-only; potential for co-digestion Digester system design and Construction Quality Assurance Plan (CQAP) submitted in June 2011 ATC for genset and SCR obtained in Oct 2011 CVRWQCB s letter authorization to start construction May 2012 County construction permit October

19 Warmerdam

20 Lagoon Digester

21 Warmerdam Project 1,200 milk cows The project would initially use an above-ground tank using codigestion Costs escalated to roughly $7.4m Developer could not obtain financing SMUD released a solicitation (RSOI) for new developer in November 28 Received 13 proposals on Dec 7; 3 finalists; winner selected by farmer New developer under contract in late December 2011 New developer will build a lagoon digester using manure only Project cost initially lowered to $1.7m Costs lowered further to $1.45m due to use of existing lagoon and enclosed genset (no buildings required) 21

22 Warmerdam Project - Timeline January 2010 SMUD receives notice of award from DOE July 2010 SMUD signs grant award contract with DOE September 2010 SMUD meets with DOE and developers on CRED projects December 2011 Maas Energy Works secures 1603 Treasury Grant January 2012 Project kickoff Meeting with Maas Energy Works May 2012 All project financing in place August 2012 Lease agreement with farmer September 2012 Regional Water Board s approval October 2012 Construction permit (County) Q Financing with lending institution to be secured; begin construction Q Start-Up 22

23 Warmerdam Project - Budget 23

24 Warmerdam - Permits Previous developer had obtained ATC for 1MW genset; CVRWQCB s permit would take several months due to codigestion New developer: Manure-only; potential for co-digestion CVRWQCB informed developer that an existing lagoon could be used would not trigger CEQA review Permitting 600 kw genset with SRC not an issue 24

25 Major Challenges Economics: Projects need substantial grant funds, tax credits, subsidized loans Obtaining debt financing, cost of financing Contracts in place: PPA, feedstock supply, sale of byproducts Farmers skepticism: Benefits to the dairy Complexity, O&M costs Uncertainty of farm financial health 25

26 Thanks!