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NYSWANA Participation in the REV Process


NYSERDA project shows how new york solid waste management agencies can overcome uncertainties and manage risk in the development of biogas-to-energy projects

Background – Renewable energy development is not usually an active issue among solid waste professionals. But the broad sweep of the utility reform effort in NYS, begun in 2014, caught the NYSWANA board’s attention. They realized the complex proceeding, called Reforming the Energy Vision (REV), had significant potential impact on anaerobic digestion and organic waste policy. As a result, NYSWANA decided to join with others to form the NY Biogas Study Group (NYBSG) and intervene in the REV proceedings.

Public utilities now have an obligation to procure 50% of their power from renewable sources by the year 2030. REV aims to set electric rates that incent distributed power producers to generate renewable energy AND utilities to buy it. Also on the REV agenda is to increase energy efficiency, modernize the utility grid and make it more resilient.

Advantages of Biogas Power – NYSWANA members should be aware of the arguments NYBSG made in its REV intervention – among other points, that

  • Biogas power provides significant baseload renewable electricity supply – an important distinction from intermittent solar and wind sources.
  • Supplementation of biosolids by organic waste streams boosts biogas production.
  • The special characteristics of biogas projects require special electric rate treatment if the potential benefits were to be realized.

Ultimately, the regulatory authority did not find these arguments compelling.

A New Role for NYSERDA – Another consequence of the REV proceeding was the transformation of the NYS Energy Research & Development Agency’s (NYSERDA). Utility funding it had been receiving to support renewable energy initiatives ended. Regulators anticipated that REV would create electric market signals (prices) sufficient to cause investment in distributed renewable energy production thereby making NYSERDA subsidies obsolete.

NYSERDA instead would focus on eliminating barriers to adoption and support efforts to bring new business models and approaches to the market. Taking the cue, NYBSG board members suggested a project to help stimulate innovative investment in Biogas-to-Energy (BTE) projects at the State’s municipally owned solid waste and water recovery agencies.

Anaerobic Digestion Project for NYSERDA
NYSERDA agreed to fund a case study and outreach/educational project to help municipal managers understand and mitigate the business risks associated with BTE projects. The project, managed by NYBSG members D&B Engineers and Architects, P.C. and Huttner Strategies, included a workshop series and the modeling of several financing schemes.

Outreach and Education for Solid Waste and Wastewater Agencies – The project team identified the agencies having a high likelihood of becoming early adopters of BTE projects. The team then recruited private project developers, potential financiers and attorneys with expertise in public procurement for a series of expert-led webinars.

The webinars brought forward information useful to all participants. The project used Rockland County as the case study. The sessions provided information needed to do an in-depth analysis of options for the business case.

  • Sourcing Organics
  • Working with Private Partners
  • Elements of a Successful Business Plan
  • Energy Markets for Biogas
  • Procurement & Contracting
  • Impediments to Success

 

The NYBSG team developed a set of tools and resources that can be used by municipalities throughout the state to assess feasibility and develop BTE projects. These materials addressed multiple factors:

  • Assembling A Project Team
  • Public and Private Sector Roles
  • Project Site Evaluation
  • Organic Waste Source Availability and Quantity
  • Project Developer Interest
  • Market Dynamics and Price Forecasts for Energy Product Sales
  • Digestate Treatment and Ultimate Disposal/ Sale
  • Financing Options
  • Procurement and Contracting Options

Project pro formas and spreadsheet-based financial models for several typical project concepts were developed. Also included is a checklist that can be used by facilities throughout the State as the basis for developing requests for proposals (RFPs) that conform with NY General Municipal Law (NYGML) 120-w.

The financial model can evaluate different siting, energy product, CAPEX and OPEX scenarios. Typical revenue sources, i.e., tipping fees, energy sales and digestate byproduct marketing, can be forecast. The project also included a wide-ranging discussion of procurement law, experiences from around North America and successful finance model structures.

Project Outputs are Available for Use
The tools and resources developed for the NYSERDA project, in the form of webinar recordings and the pro forma financial model are available at https://drive.google.com/drive/u/1/folders/0B9tRwQ7gN-HsaW5VRWl5Y1lXMlE. Interested parties can contact Ted Pytlar (tpytlar@db-eng.com; (516) 364-9890, x3994; or Jack Huttner (jhuttner@huttnerstrategies.com; (917)-720-7803) for more details.

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