Delivering Biogas to the Natural Gas Distribution Network a utility perspective.

Transcription

1 Delivering Biogas to the Natural Gas Distribution Network a utility perspective. Ken Ross Integrated Resource Planning Manager Terasen Gas March 2010 biogas@terasengas.com

2 Forward-Looking Statement By their very nature, forward-looking statements are based on underlying assumptions and are subject to inherent risks and uncertainties surrounding future expectations generally. Such events include, but are not limited to, general economic, market and business conditions, regulatory developments, weather and competition. Terasen and Fortis cautions readers that should certain events or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary significantly from those expected. For additional information with respect to certain of these risks or factors, reference should be made to the Corporation s continuous disclosure materials filed from time to time with Canadian securities regulatory authorities. The Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

3 Terasen - a Fortis Company Deliver natural gas and provide alternative energy throughout BC Over 940,000 customers 125 communities 1400 employees 95% of the natural gas supplied in BC $4 billion investments in BC Regulated by BC Utilities Commission 3

4 Biogas Upgrading for Pipeline Injection Agriculture Waste Collection & Transport (nearby f arms) Anaerobic Digester Raw Biogas Raw Biogas Production Bio-Methane Upgrading to Pipeline Quality Biomethane Gas Meter and Quality Control Pipeline Interconnection & Delivery to TGI Customers 40% - 60% CH 4 >96% CH 4 30% - 50% CO 2 <2% CO 2 0% - 2% O 2 <0.4% O Upgrading ppm H 2 S Sulphur free ppm VOC s VOC free H 2 O Saturated <65 mg/m 3 H 2 O Low Pressure Low Pressure Upgraded biomethane meets pipeline quality specifications 4

5 Electricity Generation vs. Pipeline Injection 65% Loss 35 % Remaining 6% Loss 33 % Remaining No Loss 33% Energy Remaining Anaerobic Digester Raw Biogas Processing Transmission End Use 81% Energy Remaining 9% Loss 91 % Remaining 3% Loss 88 % Remaining 8% Loss 81 % Remaining 5

6 Physical Interconnection Issues Urban Distribution Network Gate Station High Pressure Transmission Pipeline Pipe Pressure & Size Distance to Injection Point Demand Downstream from Injection Point Gas Quality Equipment Selection Utility Management Systems and Processes Rural Low Pressure Distribution Main 6

7 Terasen Investment in Biogas Production Agriculture Waste Collection & Transport (nearby f arms) Anaerobic Digester Raw Biogas Production Physical gas to local customers. Upgrading to Pipeline Quality Biomethane Gas Meter and Quality Control Pipeline Interconnection & Delivery to TGI Customers Renewable attributes can be sold to any customer. 7

8 Terasen Role Able to finance significant portion of project Typically upgrade equipment & connection Long term (10 years +) investment horizon Vested interest in success of project Safety Security of gas supply Long term contract Expertise in operation and Maintenance of gas related equipment Assumption of upgrading removes some project complexity from producer 8

9 Submitting a Proposal to Produce Biogas for Pipeline Injection Each project is unique no one size fits all Flexible, partnership approach Project Expression of Interest: Site details, company information, production & delivery estimates, digester feedstock, etc. Evaluation: Project location, economics, technology, reliability, timing, utilities commission approval Project Development Process: Memorandum of Understanding detailed technical and financial analysis term sheet contract negotiation utilities commission approval 9

10 Role of the BC Utilities Commission BC Utilities Commission Act Section 46 Project Applications Upgrading and Interconnection Infrastructure Section 71 Energy Supply Contracts Biogas contracts appear to range from 30,000 to 200,000 Gigajoules/yr Terms will run 10 to 15 years In reviewing applications and contracts, the Commission must consider government s energy objectives including: Encouraging public utilities to reduce greenhouse gas emissions, Encouraging public utilities to use innovative technologies 10

11 Selling Biomethane to our Customers Terasen is developing a renewable energy program wherein customers can sign up for a percentage of their gas use to be carbon neutral: Market research shows strong customer support Premium to current conventional gas prices Price based on cost-of-service for biogas project portfolio Should Terasen offer a biogas program? Unsure 4% No 1% Portfolio might include other carbon offset mechanisms in future Initial offer to residential customers future offering to commercial Application to utilities commission by the end of March es Maybe 30% Yes 65% 11

12 Summary Biogas from Anaerobic Digestion can be cleaned to pipeline quality Biogas Energy Resources should be used wisely: 1. Pipeline injection whenever physically and financially feasible multiple end-use applications possible 2. Direct use for process energy when it is the environmental and economic choice 3. Electricity generation when a project is too small or too distant to be economically upgraded and injected into a pipeline biogas@terasengas.com 12