July-August 2001

Landfill Gas Utilization: The Future's So Bright

As of May 2001, more than 330 landfill gas utilization projects are in operation, up from just 162 in 1996. Can this tremendous growth continue? This paper explores the technology and market factors that make EPA’s Landfill Methane Outreach Program optimistic that it can.

Disclaimer: Specific mention of companies or products does not constitute endorsement by EPA.

The IRS Section 29 tax credit for sale of landfill gas (LFG) expired in 1998, leaving many concerned about the future of the LFG utilization industry. It is clear that Section 29 credits have played a vital role in the industry’s growth, but careful evaluation of the industry reveals that several other factors will help sustain interest in LFG utilization in the future. In addition, new tax-credit proposals emerging on Capitol Hill (not discussed in this paper) could provide additional stimulus for utilization of renewable LFG resources.

Let’s take a quick trip into the future: The year is 2015 and we’re still generating enormous amounts of solid waste–not that this would have surprised us in 2001. Landfills remain an important solid waste disposal method, but now they’re called "renewable energy parks." Here LFG is universally recovered for a variety of innovative energy applications, and closed landfills are covered by advanced photovoltaics (PV) or wind turbines generating renewable energy. At some landfills, the bioreactor process causes wastes to decompose in a matter of years rather than decades, leaving what remains to be mined for a variety of applications and enabling the site to be recycled over and over again without the need for a new landfill. The landfill has become an integral component of community-based sustainable development practices. The LFG industry continues to thrive through a variety of creative, cost-effective measures. One such measure is the development of ecoindustrial parks next to many landfills. Companies located in ecoindustrial parks receive energy directly from the landfills, and many companies actively recover waste materials (e.g., old computers and textiles) for reuse.

While no one can be certain of this vision of the future, prospects for LFG utilization look very bright. New technologies and market opportunities are emerging, along with a greater appreciation for the benefits of LFG utilization.

Technology Will Play a Vital Role in the Bright Future of LFG Utilization

A review of the Landfill Methane Outreach Program (LMOP) database for LFG utilization projects reveals that the last five years have witnessed both a substantial growth in new LFG utilization technologies and the emergence of many innovative uses for LFG.

Micropower

Microturbines are small turbine/generator sets that create new economic opportunities for landfills–especially smaller, younger, or closed landfills with relatively low LFG generation rates. Although originally developed to run on natural gas, microturbines perform well on LFG. They can be used to provide both onsite power needs and power to electric grids, and they can be equipped with options that allow the user to recover waste heat for such purposes as heating water, greenhouses, or office space.

Advantages of microturbines include their size (capacities range from just 25 kW to 250 kW), modularity, and low-maintenance needs. A 30-kW microturbine system is about the same size as a refrigerator and contains the turbine, generator, and electricity conditioning equipment in a single package. As a landfill develops, microturbines can be added to increase generating capacity and removed as generation decreases. Closed landfills can use microturbines to recover decreasing LFG flows to power onsite uses (e.g., gas collection and leachate recovery systems) and sell the excess to the grid. Microturbines are also well suited to remote landfills where power and waste-heat demand is comparable to the turbine unit output.

Because NO_x and other emissions from microturbines are very low, they may be attractive for landfills facing stringent air-quality standards. A unit recently tested by Capstone Turbines for LFG demonstrated NO_x levels of only 1.3 ppm (versus approximately 50 ppm for a typical reciprocating engine), with negligible levels of carbon monoxide (CO), volatile organic compounds, and particulate matter. George Wiltsee of Capstone Turbines notes that landfill project developers facing tight permitting constraints have shown a good deal of interest in microturbines.

Several landfills have demonstrated the use of microturbines for electricity generation from LFG. One such installation was a 30-kW Capstone microturbine operated at the Los Angeles County Sanitation District’s (LACSD) Puente Hills Landfill. The energy output from this unit helped meet power needs at the landfill. After nearly 2,000 hours of reliable operation, Capstone removed and examined the unit. It found minor operational issues that it will address when the unit is reinstalled. Ed Wheless of LACSD comments, "Three things about microturbines attract my attention: First, they have almost no NO_x emissions. Second, they require virtually no maintenance. And third, they can be installed or relocated with little effort."

Trash Trucks Powered by LFG Product

"We have a vision of ultimately making our landfills closed-loop systems. All energy required to collect and dispose of waste would be provided by the waste," says Charles Woolever, deputy environmental services director with the City of San Diego, CA. The city’s South Chollas Landfill, a 120-ac. site containing 4.7 million tons of waste and closed in 1981, is demonstrating a new technology for converting LFG to a liquefied natural gas (LNG) fuel. This technology produces a methane fuel that contains more than 97% methane, less than 2% ethane, and 1% inerts. The city will combust the LNG fuel in conjunction with diesel fuel in its waste collection vehicles in an approximate ratio of 80% methane to 20% diesel fuel.

There are many advantages to using LNG as a diesel-fuel substitute. For San Diego, using this technology represents a significant step toward reaching its goal of making the landfill a closed-loop system. Another advantage is the very low exhaust emissions from the truck engines. The manufacturer reports that NO_x emissions from the truck exhaust could be reduced by almost 40%. Moreover, the technology reduces particulate and sulfur-oxide emissions to negligible levels.

The San Diego landfill is installing a fueling unit supplied by Applied LNG Technologies and its subcontractors. The unit will produce 3,000 gal./day of liquefied methane. It also features a modular design that will allow it to be relocated as gas availability or demand shifts to other locations. To date, San Diego has converted more than 50 trucks to burn the dual fuels and ultimately plans to convert its entire fleet of 165 trucks.

San Diego is also investigating the use of PV arrays on its landfills to generate electricity from solar energy for use at industrial facilities. The first site the city is evaluating is the Miramar Landfill, which already captures and uses its LFG. With the addition of a PV system, Miramar could be the first renewable energy park, providing a model for other communities to follow.

Greenhouses Powered by LFG

Greenhouses are a new and exciting LFG application. LFG offers several advantages as a greenhouse fuel. Landfills are often located in rural areas without nearby industrial markets for their gas. These same landfills often occupy large expanses of land ideally suited for greenhouse structures. In such situations, greenhouses can benefit from the availability of land and an inexpensive fuel source. The LMOP’s records show at least five greenhouse facilities in the United States that use LFG for space heating, and four more facilities are in various stages of planning and construction.

LFG not only has a high heating value, but its high CO₂ content is ideal for plant growth. A new project at Topgro Greenhouses Ltd. in Langley, BC, is using the nutritive value of the CO₂ to promote plant growth. At this facility, the LFG is combusted in a conventional boiler to provide steam heating for the greenhouses, while the flue gas from one of the boilers is used to boost the CO₂ concentration in the greenhouses to an ideal concentration of 1,000 ppm. The Topgro greenhouses are thought to be the first site to put LFG to this dual use. Topgro has been pleased with the project’s results and is developing a second project.

Maximizing Gas Extraction Efficiency

Technologies for enhancing LFG extraction will play an important role in the economics and effectiveness of LFG projects. These technologies increase the capture of LFG and improve the performance of LFG projects.

One set of these technologies can be categorized as well maintenance technologies. These technologies were first developed for the natural-gas industry and are now being applied to LFG wells. LFG wells often experience reduced gas flow as a result of either biofouling or siltation of their gravel packs. Siltation can be a problem for dual-extraction wells where leachate has been withdrawn too aggressively. The Cuyahoga Landfill in Ohio restored LFG flows to silted wells, using air and a foaming agent to remove the silt from the gravel packs. Similarly, the Glenwillow Landfill in Ohio effectively used CO₂ as a biofouling inhibitor. Once LFG flows were restored to these wells, the LFG projects were able to operate more efficiently.

Another promising set of technologies used effectively is automated wellhead controls. These technologies use remote computers to perform weekly gas-flow balancing. An automated wellhead system throttles the wellhead valve, based on various measured parameters such as vacuum, flow rate, CH₄ concentration, and/or O₂ concentration. Landfills that have applied these technologies are finding that increased capital costs are offset by greatly reduced operating and maintenance costs. These technologies have been used at a landfill in Chandler, AZ, and are becoming increasingly common at European landfills.

New LFG Market Opportunities Abound

The LMOP is optimistic that emerging market forces will also promote the continued development of LFG utilization projects. States are restructuring their electric-utility industries, consumers are demanding that their utilities and businesses include renewable power in their portfolios, businesses are seeking independent sources of reliable power, and an international market is developing for greenhouse gas emissions reductions. These new market forces are discussed below.

Restructuring of the Electric-Utility Industry

In the absence of federal legislation, numerous states are formulating their own electric-energy restructuring strategies. Figure 1 shows that at the end of 2001, 24 states and the District of Colombia will have enacted legislation to open their electric-power markets to competition, enabling independent power producers to compete to provide electricity to these markets.

Independent power producers are more likely to be attracted to smaller electric projects than are the larger regulated utilities. The average size of an independent power project is 17 MW (LFG projects average 3 MW), compared to the 100- to 1,000-MW projects that dominate the portfolio of the larger electric utilities. Given their size and reliability, LFG projects are attractive to many of these independent power producers.

Figure 1 also shows the status of restructuring legislation in other states. While the remaining states are likely to move with caution in light of the problems California has experienced, we anticipate continued progress in electric-utility restructuring, creating further opportunities for LFG projects.

2,000 MW of Renewable LFG

A second beneficial aspect of many states’ electric-utility restructuring programs is the provision for renewable portfolio standards (RPS). RPS require power providers and utilities to incorporate a certain percentage of renewable power into their power offering. This percentage has typically ranged from 0.5% to 5%. As more renewable energy sources and renewable technologies are identified, however, these percentages are likely to increase. As of the first of this year, 11 states, shown in Figure 2, are in the process of establishing RPS. If these prove to be successful, many more states could add RPS to their restructuring programs.

In response to RPS requirements, utilities and power providers in the states shown in Figure 2 are identifying new renewable power sources. Because LFG is located close to urban markets, is relatively quick to install and market, and is very competitively priced, it is likely to be a highly sought-after renewable power option. Texas recently enacted the largest RPS in the US, which require more than 2,000 MW of renewable power to go on-line in the state by 2009 (of which 400 MW must be on-line by the end of 2002). LFG utilization in Texas has skyrocketed as a result. For example, Waste Management Inc. and Reliant Energy are partnering in one of the largest LFG deals ever to produce 44 MW of electricity from 10 to 15 Texas landfills.

Consumer Demand for Green Power

We also are witnessing increasing consumer demand for green power from renewable sources. The US Department of Energy (DOE) recently conducted a consumer preference survey that revealed a majority of consumers across the nation are interested in purchasing electricity from renewable sources and that most of these consumers are willing to pay an additional premium for this green energy.

Many agencies, communities, and consumers want to purchase green power because they see it as better for the environment and, in many cases, as a way to advance the goal of being less dependent on conventional power sources. In California, 38 city governments, school districts, and public agencies have arranged to purchase green power for all their power needs.

Federal Executive Order 13123, issued in 1999, requires all federal agencies to expand their use of renewable energy. The goal of the order is to reduce greenhouse gas emissions from energy use 30% by 2010. In response to this order, EPA has begun negotiating the purchase of renewable power for its many facilities. EPA’s laboratory in Richmond, CA, receives all of its electric power from LFG. In a similar program, DOE has directed each of its facilities to purchase 3% of its power from renewable energy sources by 2005 and to increase this level to 7.5% by 2010. The governors of Colorado and Nebraska issued similar executive orders requiring their state agencies to begin purchasing renewable power. As a result, five state agencies in Nebraska and the Governor’s mansion now operate on 100% renewable power.

As of July 2000, green power was being marketed to electricity consumers in five states: California, Connecticut, Maine, New Jersey, and Pennsylvania. More than 80 utilities have set up green pricing programs that they will soon offer to their customers. In 2000 alone, approximately 35 new green pricing programs were expected to be launched, adding an additional 120 MW of renewable energy capacity. Figure 3 illustrates this growth in green pricing programs. As the customers of these more than 80 utilities opt to purchase green power, the demand for renewable power sources such as LFG will increase.

Demand for Stable Energy Supply and Prices

Over the last year or so, the US has experienced major changes in the overall supply and demand for energy. These changes have most recently and notably come to public attention because of the situation in California, where electricity prices have increased dramatically and consumers have faced electricity shortages. In many other areas of the country, electricity and natural-gas prices have also risen significantly, and electricity generating capacity has been stretched thin.

Concern over these problems has prompted many commercial and industrial consumers to look for additional sources of reliable and economic electric power. Similar concerns over the electricity supply recently prompted the Long Island Power Authority to announce plans to offer incentives to businesses and governmental units to generate a portion of their own power during the upcoming peak demand months of June to September.

LFG is an ideal source of uninterruptible energy. LFG is generated 24 hours a day, seven days a week, providing a base-load energy supply. Customers seeking relief from roller-coaster gas prices are considering signing long-term gas-supply contracts at competitive prices. LFG will be ideally suited to meet the gas needs of many of these customers.

Financial Incentives for LFG Energy

Many state governments are providing incentives to encourage renewable energy development, including LFG utilization projects. Benefits cited by states include increasing the diversity of the state’s energy mix, creating local economic growth, using local resources, conserving nonrenewable resources, and reducing environmental impacts from fossil-fuel burning. With the increasing interest in energy and environmental issues from private industry, governmental agencies, and the general public, more states are expected to adopt incentive programs. Strategies that states are expected to use include low interest—rate loans, grants, and tax incentives.

Low interest—rate loans are becoming increasingly popular with states. Up-front capital expenditures typically dominate the cost of LFG utilization projects. Thus, the financial feasibility of projects is very sensitive to capital costs, which in turn depend on interest rates. By providing loans with zero- or low-interest rates, states are helping to overcome this barrier to LFG utilization project development.

States are also providing grants that can be applied to the purchase, construction, and installation of LFG systems. The Georgia Environmental Facilities Authority’s Municipal Solid Waste Loan Program and Recycling and Waste Reduction Grant Program are recent examples of grant programs designed to help local governments develop environmentally beneficial solid waste projects, including LFG utilization projects. These no interest—rate loans and grants are available to Georgia local governments, who may partner with private-sector developers.

Other states are using a variety of funding sources to make loans or grants to businesses, landfill owners and operators, project developers, municipalities, and others involved in LFG utilization projects. Exempting LFG utilization projects from state taxes is another powerful incentive to encourage new projects. Some states have recently exempted equipment that generates energy from LFG from state sales and use taxes or from state property taxes. Maryland’s Clean Energy Incentive Act, for example, provides tax credits to facilities that produce energy from biomass (including LFG). Qualifying facilities can claim a credit on their state income taxes.

The LMOP’s Investment in the Future

The LMOP, encouraged by these technological and market drivers, continues to work with the industry and local and state governments to promote the development of new LFG utilization projects. To help jump-start widespread application of some of the innovations described above, the LMOP expects to award one or more small grants ($15,000-$50,000) for projects that would transform the LFG market (e.g., by proposing a unique technology, community outreach effort, project structure, or partnership element that could serve as a model to future LFG project development efforts). Grant awards will be announced soon.

Conclusion

Use of our renewable LFG resources offers US communities and industries many environmental, energy, and economic benefits. Recognition of the important role LFG can play in supplying energy to homes, businesses, and government is growing, while exciting new technologies and market forces are converging to increase the opportunities for cost-effective LFG use. As the LMOP looks to the future, we see more and more landfills–particularly smaller landfills that have not been considered attractive for LFG projects in the past–deciding that LFG utilization makes sense for them. The LMOP welcomes your input and participation to help make this happen.