renewable natural gas: pipeline biomethane for californiascap1.org/potw reference library/110727...
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© 2006 Southern California Gas Company. All copyright and trademark rights reserved
Renewable Natural Gas:
Pipeline Biomethane for California
Southern California Alliance of Publicly Owned Treatment Works
City of Escondido, Hale Avenue Resource Recovery Facility
July 27, 2011
Gary Bautista
Southern California Gas Company
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© 2005 Accenture. All rights reserved. 2
AGENDA
• Southern California Gas Company Overview
• Biogas vs. Biomethane
• Renewable Natural Gas
Drivers
Advantages
Challenges
• Gas Quality and Interconnection Requirements
• Gas Conditioning Economics
• SCG Focus
• Proposed Biogas Programs and Services
• Questions
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Southern California Gas Company Overview
• Southern California Gas Company (SoCalGas)
• A regulated public utility that provides safe and reliable
natural gas service to 20.9 million consumers
• Nation’s largest natural gas distribution utility with 5.8
million meters
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Renewable Natural Gas Market: Biogas vs. Biomethane
Remove Trace Constituents
H2S, Siloxanes, etc.
Biogas Conditioning Facility
Biogas
“Treated” Biogas
Biomethane
Onsite
Use
Offsite
Use
Power
Generation
Natural Gas
Equipment
Pipeline
Injection
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Renewable Natural Gas Market: Biogas vs. Biomethane
Typical Biogas Biogas "Treated" Biogas Biomethane
Gas Composition and Heating Value
CH4 62.0% 62.0% 98.5%
CO2 37.6% 37.6% 0.8%
O2, H2, N2, Others 0.4% 0.4% 0.7%
Heating Value (btu/scf) 625 625 990+
Two of the Key Trace Constituents
H2S 300 ppm 1 ppm 1 ppm
Siloxanes 4,000 ppb 70 ppb Non-detectable
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Drivers to Produce/Utilize Biogas/Biomethane
• California Regulatory Policies
Assembly Bill 32: Reduce GHG’s back to 1990 levels by 2020
• Biogas/biomethane projects can create carbon offset credits to help project economics (cap and trade)
Renewable Portfolio Standard (RPS): 20% by 2010, potentially 33% by 2020
• Biogas/biomethane can be used to help achieve RPS goals
Low Carbon Fuel Standard: reduce the carbon intensity of California’s transportation fuels by at least 10 percent by 2020
• Biogas/biomethane can be used by natural gas vehicles, resulting in the lowest carbon intensity value of any transportation fuel source*
• Availability of feedstock
Wastewater, Food Waste, Dairy, and Biomass
Could potentially provide ~16% of California’s natural gas usage
* CARB Staff Report: Initial Statement of Reasons Proposed Regulation to Implement
the Low Carbon Fuel Standard, Volume 1 March 5, 2009
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Advantages of Biomethane
• Interchangeable, Storable, and Dispatchable
• Maximizes Existing Infrastructure
Gas Pipeline Network
Natural Gas Storage Fields
Electric Power Plants
Some Existing Digestion Infrastructure
New Conditioning and Some Additional Digestion Infrastructure Required
• Assignable to Highest Value Use
Renewable Electric Generation
Transportation Sector
End Use
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Challenges to Produce/Condition Biomethane
• Investor Confidence and Perceived Technology Risk
No current pipeline injection projects in CA - Difficult to gain investor
confidence in technology
SoCalGas Rule 30 and PG&E Rule 21 Gas Quality Specifications
(for pipeline injection)
• Project Scale
Small to medium scale biogas production facilities are not
economical
Minimum threshold is approximately 1,000 standard cubic feet per
minute (scfm) for favorable economics
• Incentives – Uneven for biogas production/conditioning
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© 2005 Accenture. All rights reserved. 9
Gas Quality and Risk Considerations
• SoCalGas develop testing and monitoring
Based on internal studies and Gas Technology Institute (GTI)
Ensures compliance with existing gas quality standards (SCG
Rule 30)
• Technologies available to process biogas
Pressure Swing Adsorption (PSA)
Amine Scrubbing
• Additional Studies being performed
Digester Risk Assessment
Feedstock Availability and Consistency
Central Valley Opportunities
NOTE: Tariff currently prohibits introduction of landfill gas on our system
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© 2005 Accenture. All rights reserved. 10
Interconnection to SoCalGas Pipelines
• Pipeline interconnection pursuant to Rule 39 and Biogas Guidelines
• Generally 18-24 month process
• Minimum construction time is about 9 months
• Rule 39 requires upfront payment
• Staged studies provide increasing levels of detail and accuracy
• Interconnection costs can be highly site specific
• Interconnection is independent of any other SCG business
arrangements
www.socalgas.com/documents/business/Rule30_BiomethaneGuidance.pdf
www.socalgas.com/business/suppliers
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Cost to Conditioning to Pipeline Quality
0 2000 4000 6000 8000 10000
Flow rate scfm
Co
st
Dairies
& S-M
WWTF’s
• Small/medium WWTFs: more economic to flare/vent than capture methane,
3 large WWTF in SoCalGas territory
• 850 dairies in SoCalGas/SDG&E territory, 5 dairies in SoCalGas territory
8,000+ cows
• Need to “cluster” numerous dairies to achieve the necessary herd size
• Potential issues with obtaining rights-of-way for clustering
Only Large WWTFs and Cow Herds get toward
flat part of scale curve
Economic
Range
Illustrative Large
WWTF’s
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Renewable “Cost to Generate” Comparison
$0 $50 $100 $150 $200 $250
Solar Thermal
PV Thin Film
PV Track
Biomass
Biomethane
Geothermal
Wind
$195
$138
$135
$100
$91
$65
$60
Levelized Cost of Generation ($/MWh)
Re
ne
wa
ble
Te
ch
no
log
y
Cost to Generate Ranges All Ranges, Except for Biomethane, Taken from RETI Phase 2B Report
$116
$140
$151
$214
$206
$226
$112
* Ranges include applicable incentives such as ITC’s and PTC’s
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SoCalGas Focus
• SoCalGas is focused on transporting biomethane
Fund, Build, Own, Operate a Biomethane Conditioning System
• Pursuing potential projects with wastewater treatment facilities
Escondido Hale Avenue Resource Recovery Facitlity
Sustainable SoCal
• Also targeting dairies, food processors, and municipal solid waste
Feedstock Agreements
Digestion Facilities
• Potential Market for Biomethane Electric Generators
Transportation
SGIP Fuel Cells
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Sempra Energy Utilities Proposed Biogas Services
CPUC Advice Letter filing seeking authority to offer biogas services*
• Biogas Conditioning Services
SEU to design, install, own, operate & maintain biogas conditioning
equipment
Provides owners of biogas additional options to produce
biomethane from their biogas while limiting upfront capital and risk
SEU will charge the customer a negotiated fee for the service under
a long-term contract
Services fully funded by SoCalGas or SDGE shareholders
* Requires CPUC Approval
Customer Owned Biogas
Biogas Conditioning System Customer Option to Own
Utility Owned &Operated Interconnection
Customer decides where
to nominate/send biomethane
Customer Owned
Biomethane
Utility Pipeline Network
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Sempra Energy Utilities Proposed Biogas Services
CPUC Advice Letter filing seeking authority to offer biogas services*
• Bioenergy Production Facilities Services
SEU to design, install, own, operate & maintain facilities/equipment
required to produce biogas
Provides owners of biogas additional options to produce biogas
from their biogas organic waste
SEU will charge the customer a negotiated fee for the service(s)
under a long-term contract
Services fully funded by SoCalGas or SDGE shareholders
* Requires CPUC Approval
Customer Owned Organic Waste
Facilities/Equipment to Produce Biogas (Customer decides who owns/operates)
Customer Owned Biogas Customer decides what
to do with the biogas
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SoCalGas Proposed “Sustainable SoCal Program”
2012 SoCalGas General Rate Case (GRC) Proposal*
• Target Customer for “Sustainable SoCal Program”
Small to mid size WWTF’s (200 to 600 scfm)
Have a digester onsite and seeking for a better solution for their biogas
• Biomethane to be used for SoCalGas facility and fleet vehicle use
• Biomethane used in place of natural gas will result in avoided costs for carbon offset needs
• Cost recovery in rate base
* Requires CPUC Approval
Biogas
Biogas Conditioning System (SoCalGas Owned and Operated)
SoCalGas Owned and Operated Interconnection
SoCalGas Owned
Biomethane
SoCalGas Pipeline
Network
WWTF
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© 2005 Accenture. All rights reserved. 17
Questions
Contact Information
Gary Bautista