Gas to Grid - Virginia's First RNG Injection Facility

The Western Virginia Water Authority (Authority) is completing a two-phase project at the Roanoke Regional Water Pollution Control Plant (WPCP) to rehabilitate and upgrade the existing anaerobic digestion system and implement a new digester gas conditioning system (DGCS) to produce renewable natural gas (RNG). The RNG will be injected into the local gas utility's (Roanoke Gas Company, RGC) nearby distribution system to generate and sell Renewable Identification Numbers (RINs). Upon its completion, the facility will be the first biogas to pipeline process of its kind in the Commonwealth of Virginia. The first phase of the project includes structural, process mechanical and electrical improvements to five 1.1-MG primary digesters. The digesters are of concrete construction and were originally built in the 1950s & 1970s. Drone technology was used to inspect and assess structural defects within the five digester tanks. Three concrete covers are being replaced with new concrete covers and an elastomeric coating system to improve the capture efficiency of biogas. The second phase of the project would not have been possible without the close collaboration between the Authority and RGC. A feasibility study was conducted to assess overall project economics and gauge RGC's interest in accepting RNG/ partnering on the project. Membrane separation was selected as the preferred technology for carbon dioxide removal and RGC provided minimum RNG quality specifications (higher heating value, carbon dioxide, oxygen, hydrogen sulfide, moisture, pressure, etc.) required for injection. A life cycle cost evaluation considered two methods of tail gas treatment and several DGCS manufacturers. Tail gas treatment methods included a regenerative thermal oxidizer (RTO) and a third membrane pass to reduce methane discharge to less than 1.5%. Although the third membrane unit carried a greater capital cost, it had a similar life cycle cost due to additional methane recovery and RIN revenue (due to greater methane capture). A third membrane pass was selected since it can be provided within the DGCS enclosure, avoiding the need for a separate piece of equipment that must communicate with the DGCS. A sensitivity analysis was performed to assess the risk of variable D-3 RIN prices and operation and maintenance (O&M) costs. As shown in Table 1, this analysis found that the pipeline injection system would generate revenue over a 20-year period if the average RIN value is maintained above $1.35. Once the digester upgrade (phase 1) is complete, average biogas production is estimated to range from 300,000 & 320,000 cubic feet per day. The DGCS manufacturer was pre-selected concurrently with the final design phase through an evaluated bidding process. Technical and cost proposals were solicited from three DGCS manufacturers. The manufacturers were scored based on: 1. Quality of Proposal 2. Cost 3. Experience and Qualifications 4. Warranty 5. Service Capability 6. Installed Horsepower References from a total of six operating utilities were contacted to support the Experience and Qualifications scoring. The overall highest ranked manufacturer was selected unanimously and was not the lowest cost. The selected manufacturer worked closely with the project team to create shop drawings in conjunction with final design efforts. The Authority and RGC came to an agreement that RGC would own and operate the DGCS and interconnect facility, and purchase raw biogas from the Authority. Although the Authority initiated the DGCS equipment procurement, RGC purchased the equipment shortly after the change in ownership was confirmed. Once all operating and maintenance expenses and RIN revenues are quantified after the first year of operation, the Authority and RGC will mutually agree to a division of profits. RGC continues to evaluate the following options for selling RINs; 1) selling RNG directly to an end user capable of utilizing the gas for transportation fuel, 2) solicit a third-party carbon broker to sell the RNG and environmental attributes to generate, document, register, market and monetize RINs, 3) sell the RNG themselves and manage the offtake agreements, tariffs, provisions and all other accounting aspects. The project is on schedule to start injecting RNG into the natural gas grid in Fall 2022. This paper will present the life cycle cost evaluation, provide insights on the design-concurrent best value manufacturer selection, and discuss the arrangement between the Authority and RGC to share in project costs and revenues.