Nice Reward, No Risk

A New Jersey village gets a cost-saving renewable power system based on biogas and solar without making any capital investment.
Nice Reward, No Risk
Technology used to convert methane gas to electricity includes anaerobic digesters, a 240 kW engine/generator from Kraft Power, and a 50 kW solar field from Advanced Solar.

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The Village of Ridgewood (N.J.) Water Pollution Control Facility is cutting its costs by adding biogas and solar power generation — that’s nothing new. But leaders in this village of 26,000 did it without spending money. Instead, they entered an agreement with other parties who provided the funds in exchange for sharing in project savings and revenue.

“We wanted to do it with a small plant in a community that wanted to be green, use renewable energy, save money, and do something good for the surrounding community and the environment,” says Dennis Doll, Middlesex Water Company CEO. “The plant ultimately will be completely self-sustaining and will buy virtually no power from the local electric provider.”

Middlesex is one of the players in the public/private partnership that helped the Ridgewood plant save money without the capital outlay normally needed for such projects. Funds for the $4 million project came from the private companies that own the equipment and will recoup their investment through a 20-year power purchase agreement.

Eventually, biogas and solar power will generate all the electricity for the village’s 1960s-era 5 mgd design flow/2.5 mgd average flow treatment plant.

Liquid waste fuel

A 240 kW engine/generator from Kraft Power runs off biogas that previously was flared. Waste heat from the unit supplies two anaerobic digesters. The generator went online in February 2013. To augment the plant’s methane production and improve project economics, the village added a liquid waste receiving station in last October.

The liquid waste from restaurants and commercial establishments creates a revenue stream and helps local haulers. “Injecting liquid waste into the digesters dramatically enhances methane production, which accelerates electricity production,” says Doll.

“Haulers had been transporting liquid waste very long distances, as far as Pennsylvania. Those savings add to the value stream, besides reducing carbon emissions. The process also provides economic and environmental value by reducing chemicals used in the treatment process and reducing solids from the plant that were previously hauled away.”

The liquid waste program is still in its early stages — two or three trucks deposit material at the plant daily. “There’s plenty of market for the material,” says Doll. “In fact, we had to put in storage capacity because we’re getting more than we need at times.”

A solar array from Advanced Solar was also installed at the plant to add 50 kW of generating capacity. The electricity from the solar and biogas facilities is sold to the village at reduced cost of 12 cents per kWh (plus a 3 percent annual escalator). The plant used to pay about 15 cents per kWh for utility power. The plant expects to save 15 percent per year.

Sharing the risk/benefit

The deal was done through a public/private partnership so that taxpayers in Ridgewood did not have to pay up front for any of it. Middlesex Water, Natural Systems Utilities and American Refining and Biochemical partnered with the village to form a new entity, Ridgewood Green RME.

“We own the physical assets and have a contract with the village,” says Doll. “The plant is run by Village of Ridgewood employees, with operations support by Natural Systems Utilities. We entered a 20-year partnership and expect to fully recover our investment and earn a fair and reasonable return.”

The village, meanwhile, gets a more efficient treatment plant and saves money. “Many municipalities are strained with their bonding capacity,” says Doll. “It’s often a difficult political sell to convince the local governing body to put out the funds for these projects. Under our business model, we not only develop the solution and implement it, but also finance it. That was very attractive to Ridgewood because they have virtually no risk. All they have to do is buy all the electricity we can produce, and every kilowatt-hour they buy is cheaper than what they had been paying.”

Through Ridgewood Green, the project also generates high-value renewable energy certificates (RECs), sold under a multiyear agreement to 3Degrees, a marketer of renewable credits and carbon offsets. Doll says the project could have been viable without the credits, but they substantially improve the payback for investors. Along with the sale of RECs, the project purchases lower-cost Green-e Certified RECs that ensure that the plant will get 100 percent of its electricity from renewable sources.

Things to come?

Such deals are becoming more common, adds Doll: “It’s kind of a no-brainer in terms of value to the environment and the ability to reduce cost and create value for all the parties. It’s in pretty wide use in Europe. As we’ve proposed this model in other cities, one question that keeps coming up is why there isn’t more of this happening.

“We’ve found that there just hasn’t been the need. There hasn’t been the same intensity in this country on reducing costs at wastewater treatment plants through renewable energy. As more municipalities become aware of the technology and the opportunity, they are getting more interested in these solutions. The fact they don’t have to finance them makes it that much easier.”

For those taking the financial risk, Doll says, the outlook is good: “The customers are not going away. You have a steady feedstock — the wastewater influent is basically an endless supply. Those are relatively easy hurdles to get over.” Doll expects the popularity of such partnerships to keep growing. This one received an Environmental Achievement Award from PlanSmart NJ for its leadership in protecting, restoring and enhancing the environment.

“We have proposals in other cities around the country to do something similar on a bigger scale,” Doll says. “Everyone we’ve talked to likes the business model. I believe you’re going to find this market opening up in the next several years, and you’ll see more of these projects getting done.”   


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