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Trash to Megawatts Mark Ohrenschall Con.Web, January 30, 2004

Proposed 30-MW-Capacity Landfill-Gas-to-Energy Plant
Near Seattle Passes Major Milestone

A large proposed landfill-gas-to-energy plant near Seattle passed a major milestone in late January, when the landfill owner and project developer finalized gas sales and development agreements.

King County and Energy Developments Inc. came to terms Jan. 20 on a planned 30-megawatt-capacity facility at the county's Cedar Hills Regional Landfill 20 miles southeast of Seattle. It would be the Northwest's biggest landfill-gas-to-energy plant, by far, and one of the biggest nationally. It also would become one of the larger biomass generators in the region.

First, however, EDI needs to complete permitting and arrange power sales for the project. With the gas sales and development contracts signed, the Texas-based firm plans to negotiate power purchase agreements in the coming months, EDI senior vice president of business development Dennis Bollinger told Con.WEB. His company has had "ongoing discussions" with Puget Sound-area entities and power marketers in the region. "We're specifically targeting people who are looking for renewable or green energy," he said. "I think that in the Northwest, there's a great opportunity for a green power renewable facility."

Bollinger anticipates the plant operating by late 2005 or early 2006, with three gas-fired turbines and a heat-recovery steam boiler generating about 30 MW altogether.

King County, meanwhile, expects to reap about $400,000 annually from selling Cedar Hills gas, which currently is flared. The county also would save $80,000 annually on electric bills for the landfill gas collection system. "This power plant ... will be developed on EDI's investment, while we are able to sell the waste gas for fuel," said King County project manager Mark Buscher. "It essentially results in a very strong public-private partnership."

Cedar Hills Landfill-Gas-to-Energy
Energy Developments operates nine U.S. landfill-gas-to-energy plants and another 54 worldwide through its parent company, Bollinger said. It was chosen to develop the Cedar Hills project through a King County Solid Waste Division request for proposals (see Con.WEB, Dec. 20, 2002).

"A landfill of this size is unusual and it offers a great deal of potential and a great deal of opportunity," said Bollinger. Cedar Hills opened in 1962, and the 920-acre landfill holds about 27 million tons of accumulated garbage. The anaerobic decomposition of organic wastes in the trash creates landfill gas, which consists primarily of methane and carbon dioxide.

King County had long eyed the energy potential at Cedar Hills, according to a March 2001 study by consulting firm R.W. Beck. "Up to this point, however, project economics were unfavorable due to the relatively low price for electricity and natural gas in the region," the study said. "Recent run-up in energy prices and advances in technology have improved project feasibility."

After its selection by King County, EDI anticipated a final contract by early 2003, Bollinger told Con.WEB in late 2002. But this venture is large and complicated, and new to King County, he said in late January. Buscher said testing of landfill gas volume and composition took four to five months.

On Jan. 20, three separate agreements were signed by county and EDI officials.

King County will sell all the Cedar Hills landfill gas to EDI--an estimated 11 million cubic feet per day, according to Buscher. EDI will pay 15.4 cents per million British thermal units, subject to an inflation escalator. King County can adjust the purchase price after a year of commercial operation--one time only--"based on the actual real cost of developing the power plant and the real value of electricity in the open marketplace," Buscher said. The county and EDI will essentially share any added efficiencies or revenue increases.

The contract runs 15 years, with a potential 10-year extension.

The county and EDI also inked a project development agreement and a lease for the plant site, Buscher said.

On the company's part, "We will design, we will build, we will own, we will operate the facility," said Bollinger.

Plant Planning
Although the proposed plant is not completely designed, Bollinger said EDI plans three gas-fired turbines, each 5 MW to 6 MW capacity. Heat-recovery steam boilers would produce another 12 MW to 13 MW, for a total capacity of about 30 MW. "Because of the size of the landfill, we are able to utilize combined-cycle technology," unlike with smaller landfill-gas-to-energy plants, he said. "We'll end up generating much more electricity with a lot less emissions per KW."

Cedar Hills is projected to close within a decade, and at some point diminishing landfill gas might lead EDI to shut down one of the turbines, but Bollinger called that possibility "many, many years out in the future."

The plant should have a capacity factor in the range of 93 percent to 95 percent, stopping only for routine maintenance and any transmission problems, Bollinger said. EDI won't build any new high-voltage lines; nearby Bonneville Power Administration wires offer grid access.

EDI doesn't yet know the exact cost of the plant or the generated electricity, but Bollinger offered a rule of thumb of $1 million per megawatt of capacity to build a landfill-gas-to-energy plant. "On paper it looks substantially higher on a per-megawatt basis than what a typical, utility-size combined-cycle facility would cost," he said. Landfill-gas-to-energy plants are smaller and lack economies of scale, while also facing added gas cleaning and maintenance costs.

Permitting, Power Buying
The proposed facility needs some regulatory approvals, including land-use permission from King County Department of Development and Environmental Services, air emissions permission from Puget Sound Clean Air Agency, and solid waste handling authority from the county.

"We expect that permitting process to take up most of the rest of this year, which coincides with EDI's final design for developing the project," said Buscher.

"Right now, we anticipate the plant operational sometime in late '05 or early '06," said Bollinger. "The permitting is the big variable we really have no control over," although he expects a "relatively uneventful permitting process."

After a community survey and several local meetings, Buscher described public reaction to the proposed landfill-gas-to-energy plant as "very positive." Some concern has been raised about noise and other potential impacts, but, "What we've been able to show is this is not a change, really, to the operation of the landfill. We're still burning gas." In addition, the power plant would be located in the middle of the landfill, while the existing flaring station--which would be kept as a backup--lies on the north end. "The potential for impact to the community, which right now is low, will decrease even more dramatically," he said.

Meanwhile, EDI now has a more definitive project with which to approach potential power buyers among utilities and marketers. "Until this time, it's been very difficult to really move forward with [power purchase agreement] negotiations," Bollinger said. "I could not demonstrate I had actual control of the site and actually had the gas under contract." With those resolved, "Our goal is to conclude those negotiations as quickly as possible, realistically probably something in the next 90 to 120 days."

Related Sites:
King County
Energy Developments Inc.
Con.WEB Dec. 20, 2002 story on proposed Cedar Hills landfill-gas-to-energy plant