Determining the Best Approach for Financing and Delivery of Your Biogas to Renewable Natural Gas Project

摘要

As water resource recovery facilities (WRRFs) strive to be more financially and environmentally responsible, many are looking to increase the utilization of biogas produced by the anaerobic digestion process. Projects to convert biogas to renewable natural gas (RNG) for either vehicle fueling or pipeline injection are gaining traction at WRRFs across the country. In addition, because biogas to RNG projects can provide a revenue stream, this opens the door to unique financing approaches, such as third-party contracted financing (i.e., public private partnerships). Due to the market volatility of the Renewable Fuel Standard (RFS) program (renewable identification numbers, or RINs, are traded on an open market) and the desire for utilities to begin capturing incentives as quickly as possible, time to market has also become a major factor in how biogas to RNG projects are delivered. This has resulted in WRRFs considering alternative delivery strategies such as design/build and construction management at risk (CMAR). This paper outlines different funding opportunities and project delivery methods, and provides two case studies that illustrate the impact of project financing and delivery on long-term revenue generation. In both case studies, the private marketplace confirmed that biogas to RNG projects have technical merit and financial value, and emphasized that time to market was the best way to mitigate risk and best capture anticipated project benefits. Ultimately, the decision about how to finance and deliver biogas to RNG projects is dependent on the Owner's desired level of control, available contracting methods, funding availability, and willingness to accept project risk.