N.L. Hydro buying biogas energy

Greenhouse gas credit purchase and sale referenced in guidelines

Ashley Fitzpatrick afitzpatrick@thetelegram.com
Published on September 3, 2014

Newfoundland and Labrador Hydro will be purchasing power for the provincial energy grid from biogas projects established in the province, under the biogas pilot program announced in a news release Tuesday.

The program is meant to develop biogas power generation in the province and to produce more energy for the provincial power system, offering returns before  the province’s Muskrat Falls hydroelectric megaproject comes on stream, according to the Department of Natural Resources website.

The website outlines the basics of the program, referencing the potential introduction of renewable energy credits (RECs) and greenhouse gas-related credits.

Biogas comes from large collections of waste, typically from farms or landfills. The gases released, mainly methane, are captured and burned to produce power.

The biogas pilot program in Newfoundland and Labrador will see power purchased as follows:

• at a price per kilowatt hour (kWh) equal to 90 per cent of Hydro’s avoided marginal cost prior to Muskrat Falls entering commercial service;

• at a price per kWh indexed to the market price minus Hydro’s associated transmission costs after Muskrat Falls enters commercial service;

• up to a maximum of two megawatts (MW) per biogas project. However, certain areas of the distribution system are more limited than others, so generation output may be limited or restricted in certain areas of the province. Size limitations are determined as part of the application process;

• up to a five MW aggregate provincial maximum, which will be filled on a first-come, first-served basis;

• and will provide biogas project owners with the value of any  RECs or greenhouse gas-related credits available from the sale of such credits after Muskrat Falls enters commercial service.

Interested parties are directed to Hydro for more information.

The Telegram is continuing to seek further detail, as well as information on a contract let for research on net metering policy.