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Landfill Gas Offsets. The Untapped Potential Michael Gerbis, P.Eng. President, The Delphi Group. The Delphi Group. 15 th Anniversary (around since 1987) First climate change project in 1989 Business Focus Climate Change & Clean Energy Health & Environment Technologies & Markets

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landfill gas offsets

Landfill Gas Offsets

The Untapped Potential

Michael Gerbis, P.Eng.

President, The Delphi Group

the delphi group
The Delphi Group
  • 15th Anniversary (around since 1987)
  • First climate change project in 1989
  • Business Focus
    • Climate Change & Clean Energy
    • Health & Environment
    • Technologies & Markets
    • Corporate Strategy - EXCEL
    • EECO & Globe Series of Conferences
overview
Overview
  • LFG Potential Across Canada
  • LFG within Canada’s Action Plan
  • Business Case
    • Offsets
    • Other Benefits
  • Key Steps, Players & Challenges
  • Examples
2000 canadian emissions
2000 Canadian Emissions
  • Canada’s Total GHG Emissions 726,000 kt eCO2
    • Manitoba’s ~ 21,400 kt eCO2
  • Canadian CH4 Emissions 91,000 kt eCO2 (12.5% of Total)
    • Manitoba Total CH4 Emissions 3,400 Kt eCO2
  • Canadian LFG (CH4) Emissions 23,000 kt eCO2 (25% total CH4)
    • Manitoba LFG ~ 550 Kt eCO2
lfg management 1999 2001
LFG Management - 1999/2001

TOTAL REDUCTIONS > 7 MT

additional opportunities
Additional Opportunities
  • 6.5 Mt eCO2 reductions
  • Approx. 70 sites identified
  • Ranked
    • Brady Rd. – Ranked #1 overall
    • Kilkona – Ranked #32
    • Summit Rd. – Ranked #36
  • 85 MW of additional power
  • Estimates Ranged from < $1/ eCO2 to > $5 / eCO2

Source: Identification of Potential Landfill Sites for Additional Gas Recovery & Utilization in Canada

Prepared for Env. Canada by CRA & Delphi

climate change plan for canada
Climate Change Plan for Canada
  • Three Step Approach to Achieve Target => 240 Mt / year

* Offsets are estimated at 20 to 28 MT - because they may be sold to industry through domestic emissions trading, they are not added to the total.

climate change plan for canada ongoing activities
Climate Change Plan for CanadaOngoing Activities
  • LFG Projects Moving Forward (e.g. Vancouver)
  • Green Municipal Funds for Landfill Gas capture (2.2 MT)
  • Government purchasing offsets
    • Pilot Emission Removals, Reductions & Learnings (PERRL)
    • Air Pollution Prevention Directorate, Environment Canada www.ec.gc.ca/PERRL
  • NRCan
    • Green Power Initiative
    • TEAM projects
  • CIDA
    • $15 mil Investment in Prototype Carbon Fund (PCF)
    • $100 mil Canada Climate Change Development Fund
climate change plan for canada proposed next steps
Climate Change Plan for CanadaProposed Next Steps
  • Consultations on whether to regulate emissions reductions from new capture and flaring of landfill gas or allow them to be sold as offsets
  • Renewable Energy
    • 10% new generating capacity from green sources
    • Future community action
  • Domestic Emissions Trading System being developed
    • Landfills provide possibility to reduce emissions and represent potential offset credits
  • Purchase a Minimum of 10 MT International Credits
benefits of lfg capture
Benefits of LFG Capture
  • Reducing the potential for adverse health impacts
  • Source of revenue/profit (energy + offsets)
  • Reduction of Potent GHG Emissions
  • Reducing Potential Safety Hazards
  • Lessen Landfill owner's liability
  • Source of Green Power
  • Improved Air Quality
slide11

Landfill GHG Offsets

Emissions Baseline

Benefit Quantification

M&V

COMPANY A

(w/ GHG Emissions

Reduction Target)

LFG Offset Project

Tradable GHG Offsets

Finance ($$)

Technology

Capacity Building

Credit Purchase Contract

establishing high quality lfg offsets
Establishing High QualityLFG Offsets
  • Establish baseline
    • What would have happened in absence of project
      • Does flaring count as a reduction, or required BAU?
      • Would the methane truly have been released?
  • Quantify potential emission reductions
  • Develop transparent monitoring & measurement plan
  • Maintain records that provide clear audit trail
establishing high quality lfg offsets13
Establishing High QualityLFG Offsets
  • Estimate Value of Emissions
    • Can be a challenge
    • No official DET or IET in place
    • Not yet homogenous commodity
    • Buyers have different levels of willingness to pay
    • CO2 values could change substantially….or not
  • Preserve/secure rights in contracting
  • Seek external validation of results
establishing high quality lfg offsets14
Establishing High QualityLFG Offsets
  • Conduct Feasibility Study
    • With and Without Offsets
    • Ranges of Prices, Ownership & Selling Strategies
      • e.g. 1/3 – 1/3 – 1/3
  • Engage Key Players
    • Federal, Provincial, Municipal Governments
    • Project Developers, Technology Company, Engineering Firms, Utility, etc.
    • Investors & Potential GHG Offset Buyers
    • Strategic Advisors
    • Brokers
lfg challenges
LFG Challenges
  • Quantification
    • Direct (flaring) vs. Indirect (electrical & thermal)
    • Timing of Offsets
  • Valuation / Cash Flow / ROR
    • Price of Offsets & Selling Strategies
  • Establishing Offset Ownership
    • Multiple Stakeholders
  • Unknowns
    • Project performs as predicted
    • Future Market & Price
    • Government Approval / Future Policy
vancouver landfill
Vancouver Landfill
  • Owned & operated by the City of Vancouver
  • Serves 40% of Greater Vancouver Region
  • 400,000 tonnes per year of MSW
  • Existing LFG collection and flare system
    • 1991 installed => expanded in 2000
    • 142 Hectares
    • Over 300 vertical collection wells
    • 3000 cubic foot per minute (cfm) blower/flare system
    • Extracts and flares over 2000 cfm of 55% CH4 LFG
vancouver landfill gas collection and utilization project
Vancouver Landfill Gas Collection and Utilization Project
  • Proposed Initiative
    • Expand LFG collection & flare system over 58 hectares of the landfill (completed 2000)
    • Utilization LFG in cogeneration system
      • Electricity sold to BC Hydro as “green” power
      • Heat in the form of hot water to be used by CanAgro’s greenhouses
  • Full operation by fall 2003
  • Lifetime > 20 years
vancouver lfg project key players benefits
Vancouver LFG ProjectKey Players & Benefits
  • Projected Overall Results
    • Reduce GHG emissions by > 200,000 tonnes/year
      • equivalent to 40,000 automobiles
    • Capture 500,000 GJ/year of energy
      • equivalent to 3,000 to 4,000 homes’ energy requirements
  • The City of Vancouver
    • receive ~ $250,000 to $300,000 annually for LFG
    • % revenue from thermal offsets
    • Capture offsets
  • Corporation of Delta
    • receive ~ $80,000 to $110,000 in new tax
vancouver lfg project key players benefits19
Vancouver LFG ProjectKey Players & Benefits
  • CanAgro
    • receive a secure low-cost heating source for greenhouses
    • Offset non-renewable power requirements by ~ 20%
  • BC Hydro
    • Electricity under its Green Energy Program & elect. offsets
  • Maxim Power Corp
    • provide $8.5 mil financing for 2.5-km pipeline & co-gen plant
    • $ from BC Hydro for Green Power & Offsets
    • % of thermal offsets
  • CH2M Hill Canada Limited
    • Design & built 2000 collection system
mangrove green energy project barbados
Mangrove Green Energy ProjectBarbados
  • Potential CDM Project – Unique Concept
  • LFG Collection & Flaring System
    • 14 – 15 million m3 per year (60% CH4)
    • 1.4 million tonnes eCO2 reductions over 10 years
  • Landfill Utilization with Storage
    • ~ 5 MW => 190,000 tonnes eCO2 reductions over 10 years
  • Wind farm to be constructed
    • 1 – 2 MW of power => ~ 43,000 tonnes of eCO2 reductions over 10 years
slide22

The Delphi Group

Catalyzing Environment and Clean Energy Opportunities

  • International Transactions (CDM & Tech Transfer)
  • International Transactions (CDM & Tech Transfer)

Market Valuation

Pricing & Positioning

  • GHG Reduction Strategies

Business Planning & Project Structuring

wrap up
Wrap Up
  • LFG Represents an Untapped and Potentially Lucrative Opportunity to Reduce GHG
  • Canadian Government is Supportive
  • Corporate Buyers Will be Looking for Quality Investments & Offsets
  • Business Case Can be Made
    • Understand, Measure & Monitor (diff. scenarios)
    • Lots of Players – engage experts
    • Be Prepared - Watch Potential Stumbling Blocks
    • Stay In-Tune – Int’l / Nat’l Policy; GHG Market
the delphi group24
The Delphi Group

For More Information Contact:

Mike Gerbis, P.Eng.

President

The Delphi Group (www.delphi.ca)

428 Gilmour St.

Ottawa, Ontario K2P 0R8

Tel: (613) 562-2005 Fax: (613) 562-2008

email: mgerbis@delphi.ca

impact of carbon finance on project
Impact of Carbon Finance on Project

Project, Not Equity, IRR.

Source: PCF….Assuming a revenue stream based on emission Reduction (at US$ 3/TCO2e) the change in internal rate of return (IRR) of projects: