Colorado is on the verge of requiring the largest utilities in the state to buy a growing portion of the natural gas they purchase from renewable sources such as sewage plants, dairies and landfills.
The law would require that by 2025 at least 5% of natural gas bought by utilities with more than 200,000 gas customers come from such renewable sources of “biogas” — or be captured methane or hydrogen. The percentage of renewable natural gas grows to 15% in 2035.
The idea is to create a market incentive for utilities to use the methane already coming from municipal waste water, landfills, coal beds, dairies and similar places while also cutting the use of fossil fuels, said Sen. Chris Hansen, D-Denver, the bill’s lead sponsor.
“This is a huge opportunity to reduce overall emissions by capturing methane and using it instead of letting it escape into the atmosphere,” Hansen said, noting burning the gas reduces it to far smaller amounts of less harmful pollutants.
Colorado set requirements, first passed in 2004, that made investor-owned utilities generate 20% of electricity from renewable sources by 2020, which sparked an active market supplying wind and solar energy. Hansen expects a similar expansion for renewable natural gas, he said.
The legislation, known as Senate Bill 150, passed the Senate on Feb. 28 and has been making its way through the Democratically controlled House toward a final vote.
Climate scientists consider methane — the key ingredient in natural gas — to be at least 25 times more harmful as a heat-trapping greenhouse gas than carbon dioxide.
Hawaii and Vermont have renewable natural gas standards, but not as aggressive as what Colorado may soon adopt, Hansen said.
Xcel Energy, the main utility for the Denver metro area and biggest in Colorado, sells natural gas to 1.4 million households in the state. It sells even more natural gas to commercial and industrial customers, and it generates 37% of the electricity it sells from burning natural gas.
Hansen hasn’t heard opposition from Xcel Energy about the bill, he said.
The company hasn’t publicly declared a stance. It’s looking at the standards and considering what it could mean for the state’s emissions reduction goals, keeping an eye on customer costs, said Michelle Aguayo, a spokeswoman for Xcel Energy in Colorado
“We are committed to evaluating the most cost-effective options,” she said. “These projects present unique opportunities for us, and we’ll continue to explore them.”
Xcel already buys some renewable natural gas from a methane capture project at a Waste Management landfill east of the metro area.
In November, the South Platte Water Renewal Partners, which runs wastewater treatment for Littleton and Englewood, finished an $8 million project capturing purified methane it sells to Xcel.
“We’ve got pretty good evidence there’s available resource,” he said.
More than 250 U.S. dairies, hog farms and other commercial livestock businesses in the country generate their own electricity using anaerobic digester systems to produce methane that’s burned for power.
A study by the National Association of Clean Water Agencies and the Water Environment Research Foundation estimated U.S. wastewater treatment plants could generate enough methane to meet 12% of the country’s electricity demand.
Source: Denver Business Journal