Landfill Energy Farm
An intercompany approach to renewable energy endeavors
Thursday, June 30, 2011
By Michelle Marsh
Oftentimes, energy consumption is analyzed on an individualized basis, such as energy use per capita or per household. Rarely does an energy analysis encompass vastly different industries unless they are a basic part of some larger assemblage—such as a community, region or state—in which case each person or entity within the grouping typically shares some readily apparent common denominator. Yet, many people would agree that this approach is limiting and hence raises the question: “Are there valuable lessons to be learned from examining energy use from a very localized, but not necessarily individualized, perspective?”
With the global sustainability movement presently under way, many businesses and communities are heading back to the drawing board to begin fleshing out a new approach to the way we live and conduct business, an approach that is centered around the conservation and sustainable management of critical resources such as water, food, energy, and land. With regard to energy, renewable alternatives have become a frontrunner due to the low environmental impacts and flexible siting requirements that accompany these technologies. Could micro-siting renewable energy technologies, such as wind and solar photovoltaics, be a viable solution to our growing energy needs? One Pennsylvania project is examining this very question.
Through a cooperative partnership with PPL Renewable Energy (PPLRE) and Turkey Hill Dairy, the Lancaster County Solid Waste Management Authority (LCSWMA) installed Southcentral Pennsylvania’s first commercial-scale wind project in October 2010. The project is located along the perimeter of the authority’s Frey Farm Landfill in Conestoga, PA, and provides neighboring Turkey Hill Dairy with 25% of its annual electricity needs. With a projected 27% capacity factor, approximately 7.76 million kWh of electricity will be produced on an annual basis by this project and sold directly to Turkey Hill Dairy through a power purchase agreement with PPLRE.
At first glance, the pairing of a premier ice cream and iced tea manufacturer with a landfill might seem a bit odd, as waste management and ice cream manufacturing are two very different industries. However, a company’s ability to capitalize on new, and somewhat unusual, endeavors oftentimes depends on the foresight and progressive nature of its leader. At the Lancaster County Solid Waste Management Authority, there is no shortage of progressive leadership. The authority’s chief executive officer, James D. Warner, understands that in order to truly maximize the beneficial use of the authority’s assets, the organization must examine both the intra- and intercompany enterprises. “While our foremost mission is to protect the environment by managing waste in a safe, reliable, and efficient manner, LCSWMA recognizes that we can, and should, play a larger role in the community,” remarks Warner. “Examining our disposal assets from a holistic perspective enables the authority to capitalize on a wide variety of potential opportunities that might not be apparent at first glance. Our unique partnership with PPL Renewable Energy and Turkey Hill Dairy is one such example.”
Background
LCSWMA’s innovative renewable energy initiatives began in 2005, when the authority partnered with PPLRE to install a voluntary landfill-gas-to-energy facility at its Frey Farm Landfill. The project, which can generate up to 3.2 MW of energy, was quickly recognized as a win for both companies and earned recognition as the 2006 Project of the Year through the EPA’s Landfill Methane Outreach Program. The success of their first joint venture quickly solidified the partners’ desire to work cooperatively on future renewable energy endeavors, and thus LCSWMA and PPLRE entered into a Memorandum of Understanding (MOU) in 2006. The MOU outlined the partners’ mutual desire to collaborate on the development of additional renewable energy projects to advance their vision of creating a renewable energy park at the landfill. Shortly after the MOU was signed, PPLRE and LCSWMA determined that wind energy would be their next pursuit.
Positioned atop a 250-foot bluff along the Susquehanna River, the management and staff at LCSWMA’s landfill have long noticed the windy conditions that prevail at the site. Directly confronting prevailing winds from the west-northwest, the area, which is referred to as Turkey Point, is known for the accelerated winds that race up its slope face above the Susquehanna River. Harnessing this wind to generate electricity, however, required a great deal of planning, monitoring, and creative thinking.
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Photo: BRT Photography
The area is known for the accelerated winds that race up its slope above the Susquehanna River. |
In June 2007, LCSWMA and PPLRE installed a 60-meter meteorological tower to begin measuring wind speeds. A wind resource assessment was conducted over a 12-month period to evaluate the feasibility of micro-siting wind turbines at the landfill to provide energy to nearby Turkey Hill Dairy. Approximately one year and $65,000 dollars later, the partners received a final Wind Resource Assessment Report, as well as a Preliminary Energy Production and Economic Modeling Report, which indicated a long-term wind speed of 14.47 mph and a shear exponent value of 0.32 for the site. Both findings supported the viability of a wind project at the landfill. However, since these measurements are a critical component in evaluating the long-term success of a wind energy project, the partners determined that a follow-up Sonic Detection and Ranging (SODAR) study was necessary to confirm the reliability of the shear exponent value reported in the first study.
A shear exponent value is a calculated measurement of the wind speeds at a 100-meter hub height. This measurement is extrapolated from actual wind speeds measured at heights of 35, 50, and 60 meters. Thus, the process of extrapolation to gauge 100-meter wind speeds from known points was critical to the success of the wind project, since the project’s output and, hence, revenue is dependent upon the prevailing wind speeds. In November 2008, a SODAR study confirmed the 0.32 shear value and solidified the project partner’s commitment to move forward with the project.
The project necessitated a number of predesign and permitting studies, which included geotechnical investigations, transportation studies, archeological studies, and preliminary site layout work. A total of two years and approximately $460,000 were spent completing preconstruction tasks and studies. Once the project entered its final design stage, however, the momentum increased exponentially, and the partners were able to complete the turbine installation by October 2010. However, a few months of additional work were required to connect the turbines under load, so the project was not declared “commercially operable” until January 17, 2011.
The total cost of the project was $9.5 million, of which $5 million was spent to purchase the turbines. In order to help offset the cost of the project, LCSWMA applied for a $1.5 million Pennsylvania Energy Development Authority grant in the spring of 2009. The grant was awarded in full by the PA Department of Environmental Protection in August of the same year. Due to the public-private partnership, PPLRE was also able to monetize a 30% tax credit through the American Recovery and Reinvestment Act on its capital investment, as long as it retained legal ownership of the project. Thus, minus the grant funding and tax incentives, the partners’ total equity investment was $5.6 million. LCSMWA provided a 10-year, $4.65 million interest-only project loan to PPLRE at a rate of 6% in order to lower their cost of capital for the project. Additionally, LCSWMA was guaranteed 12.5% of the gross annual electric revenues, which, in combination with the 6 % interest payments, allows LCSWMA to benefit from an overall return on their investment of 9% annually, which is tenfold higher than what the US Treasuries yielded in 2010.
As project owner, PPLRE also entered into a cooperative agreement with the Pennsylvania Game Commission to protect the welfare of the local bird population. In fact, the partners undertook a variety of measures to mitigate potential impacts on birds in the area. When LCSWMA and PPLRE first began investigating wind energy atop Turkey Point, four turbines were considered for installation along the perimeter of the landfill. However, after conducting extensive pre-construction avian impact assessments, the project partners scaled back the scope to two turbines and sited them in areas that had demonstrated the fewest avian flyovers during the preconstruction studies.
Local Community Feedback
Once the turbines were in place, the surrounding community really started to take notice. Local news media outlets fielded numerous questions from residents of Lancaster and York counties as the public became intrigued by the two large turbines sitting atop Turkey Point. Prominently situated along the Susquehanna River, the wind turbines are visible as people enter Lancaster County from the west. In fact, the partners were recognized for their work on this project by the Lancaster County Board of Commissioners and the Lancaster County Planning Commission through an Envision Lancaster County Smart Growth Leadership Award in February 2011. For LCSWMA, receiving the award signified that the project was not only a significant achievement for the project partners, but also for Lancaster County as a whole. “This renewable wind project represents the first commercial-scale wind project in south-central Pennsylvania and serves as an important landmark for the Lancaster community,” Warner says. “The two turbines, which stand just shy of 400 feet tall from base to blade tip, are visible from various locations throughout the county and serve as visual affirmation of Lancaster’s commitment to establish a more sustainable way forward.”
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Photo: BRT Photography
The project is part of a larger commitment to produce clean energy, an important step toward the completion of the Turkey Point Renewable Energy Park. |
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Photo: LCSWMA
Located at the edge of the a landfill, the project provides a neighboring dairy with 25% of its annual electricity needs. |
Threefold Business Benefits
In many ways, this project exemplifies the advantages of micro-siting renewable energy technologies next to large manufacturing end-users. LCSWMA’s ability to look beyond the physical limits that define its landfill and envision the facility as an integral part of the larger community that encircles it, resulted in a project that will provide environmental and economic benefits to three local businesses for years to come. For the authority, the project is part of a larger commitment to produce clean, renewable energy, and serves as an important step toward the completion of the Turkey Point Renewable Energy Park at its landfill.
For PPL Renewable Energy, the project helps to advance progress in meeting the requirements set forth by the Pennsylvania Alternative Energy Portfolio Standards Act of 2004. The Act established mandates for renewable energy generation and requires electric distribution companies and electric generation suppliers to include a specific percentage of electricity from alternative resources in the power sold to Pennsylvania customers. In order to meet these requirements, PPL Renewable Energy decided to strategically build relationships with other businesses that needed or wanted to invest in renewable energy. PPL Renewable Energy funds, develops, constructs, owns and operates renewable energy facilities in Pennsylvania, New Jersey, and New England. “Partnering with other business owners who support clean energy improves the economics of the project and facilitates the approval and permitting process,” said Steven Gabrielle, the director of asset management and development for PPL Renewable Energy. “PPL companies have a long history of providing energy in an environmentally responsible manner. PPL has invested billions of dollars in projects to reduce the environmental impact of existing power plants and develop new sources of clean energy.”
Like most businesses, Turkey Hill Dairy is aware of the positive impacts that green energy practices have on the environment and the company’s bottom line. When something is good for the environment and good for business, it often appears too good to be true. However, as green technologies become more refined and mainstreamed, people are beginning to see that what is good for the environment is also good for business. Not only is Turkey Hill Dairy benefiting from the stable and predictable energy costs provided by the power purchase agreement, it has also reduced its carbon footprint by replacing 25% of its power needs with clean, renewable wind energy. And that is something that everyone, including Turkey Hill Dairy’s millions of customers, can feel good about.
Understanding how a business interacts within the larger framework of the surrounding community can better enable a company to identify partnership opportunities, as this approach provides a larger network from which to draw upon in the formation of symbiotic arrangements. Just as the phrase “environmental sustainability” encourages individuals to think about the larger life cycle effects of various products, site designs, and actions, so too should good business practices encourage companies to examine assets from a more global perspective. Imagine the picture that would unfold if business owners explored intercompany enterprises with the same intensity as intracompany enterprises. “At the landfill, we don’t have the energy consumption needs to warrant a commercial-scale wind project. However, that didn’t stop us from recognizing the opportunities that such a project could provide Turkey Hill Dairy and hence, LCSWMA, through a cooperative partnership,” Warner says.
By recognizing the potential imbued within the unique geographic features beneath its landfill, the authority was able to glean more from its landfilling operations than simply the storage of waste. LCSWMA’s ability to relate its primary mission of waste management to a larger vision of community partnership is what makes this project such an inspiring story. For even though Turkey Hill Dairy is positioned adjacent to the landfill, the dairy’s site lacks the unique topographic characteristics to support a wind energy project.
So, whether intra- or intercompany-motivated, could micro-siting renewable energy technologies become a real solution to our growing energy needs? While this approach will not solve the problem alone, localized renewable energy technologies will undoubtedly play an integral role in the solution. For landfill owners and operators who are constrained by land reuse options at closed sites, renewable energy alternatives can and should be assessed as part of any long-term land management strategy. Developing a more sustainable path forward requires a redefining of the parameters that have become all too commonplace with respect to examining energy use and generation. Successful partnerships and innovative projects like the LCSWMA/PPLRE wind energy project help to make a case for this approach.
Author's Bio: Michelle Marsh is special projects coordinator for the Lancaster County Solid Waste Authority. |
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