Diversion Dynamics

In Southington, Connecticut, two biogas projects are a testimony to both the catalyzing impact of new organics diversion laws, and their limits.
By Tim Portz | April 12, 2017

Every year in New York, about 3.9 million tons of food waste are generated, nearly 400 pounds for every man, woman and child living there.

That’s according to a recent report commissioned by the New York State Energy Research and Development Authority. “Benefit-Cost Analysis of Potential Food Waste Diversion Legislation,” written by Industrial Economics, says that of that massive volume, just 3 percent is diverted from the state’s landfills. The result is that the materials consume precious landfill space, decomposes and releases methane, a greenhouse gas far more potent that carbon dioxide.

The report is the most recent contribution to an ongoing effort undertaken by cities and municipalities to better manage the organic materials currently collected with other municipal waste, and reduce the negative impacts they have on landfills and greenhouse gas emissions. Some states and municipalities already have organic diversion laws on the books, while others, such as New York, are weighing the pros and cons of the policies, and their impacts on the generators of these feedstocks, their haulers and the industries that will ultimately be called upon to convert them into feed products, compost or energy, including biogas facilities.

In July 2011, the state of Connecticut passed Public Act 11-217, possibly the nation’s very first organic waste diversion law. The law required generators of more than 104 tons of food waste per year to divert those wastes to recycling facilities, if within a 20-mile proximity of the point of generation. In July 2013, Public Act 13-285 was passed, reducing the hurdle to 52 tons a year, taking effect in 2020.

Quantum Biopower is the first facility in Connecticut built to handle the food waste detailed in the state’s diversion law. The plant, located in Southington, was designed to process 40,000 tons annually, generating 1.2 MW of power that will be sold back to the city under a 20-year power purchase agreement. According to Brian Paganini, Quantum vice president and managing director, Quantum has been involved in material management and handling for 35 years, and started looking at ways to better handle and maximize the organic fraction of those materials in the mid-2000s, including anaerobic digestion (AD) technologies that and his team observed during trips to Germany and Switzerland. “Right around 2010 and ‘11, we started to pay more attention to the organics diversion law that was coming on line in Connecticut, and that was a piece of our decision to go full bore into an anaerobic digestion project on our site in Southington,” Paganini says.

Paganini is only willing to call Connecticut’s legislation “a piece” of Quantum’s go-forward decision, shedding some light on the impact that organics diversion laws both have and do not have on catalyzing biogas project development. “Was this something that, when we talked with our financiers, they said ‘Hey, this law is in place, we’d be happy to fully fund your project?’ No.,” he says. 

Rather, Paganini credits the law with starting the conversation with both the food waste generators and refuse haulers. “Not only do we have the food waste diversion bill, but we’ve got this higher goal of a 60 percent diversion rate by 2024, and everyone knows that if we’re going to achieve that, the best way is going to be to focus on organics, and get them out of the waste stream,” he says. “It was those factors, together, that really helped us look favorably at the project dynamics.”

Another organics processing facility, Turning Earth Central Connecticut, is under development in the same community. In 2014, the company received permission to build a dry fermentation, high-solids AD and in-vessel composting facility, and has been working to move the project through the permitting phase since. In February, Turning Earth received its permit to construct and operate, and it plans to open during the middle of next year.

Turning Earth
Amy McCrae Kessler, head of environmental and regulatory affairs, founded Turning Earth before Connecticut passed its organics diversion laws. “At the time of our founding, the laws were not on the books,” she says. “When we were deciding where these projects made the most sense, we went through a process of looking at what would be important drivers. One of them was finding a state with really progressive environmental policies.”

The Turning Earth team also worked through a checklist of other project drivers it felt were important, including electricity and gas prices, landfill tipping fees and population densities. Looking for locations where all three of these were favorable led them back to the Northeast. “The diversion laws came after we had already decided on these areas, and I think it was a great validation that we had made the right choice in our assessment of the regulatory environment that we were going into,” she says.

McCrae Kessler and Paganini recognize that many of the law’s early supporters had hoped its passage would have delivered more completed and operating biogas facilities by now. “There is a level of frustration from the folks that were behind the initial efforts to get these laws passed, because it has taken a long time to see an impact in terms of additional infrastructure being built and coming online,” McCrae Kessler says.

For Paganini, however, the expectation that the law’s passage would immediately yield an array of processing facilities across the state was unrealistic, and ignored the unique permitting challenge facilities like Quantum Biopower and Turning Earth present to regulatory bodies. “Let’s face it, these are complex projects to permit,” he says. “We are asking our regulatory bodies to permit a solid waste facility, an energy facility—in some cases a discharge facility—that may emit something in to the air. You are asking a lot of these agencies to permit quite a bit of stuff in one package,” he says.

In the Northeast, this process can take well over a year, and Paganini is quick to point out that once permitting is finalized and construction is completed, a plant may take six months or more to achieve the production levels articulated in the project’s financial assumptions. Marshalling some early projects along this pathway, and bringing them online, is vital if the organics diversion laws is to achieve the kind of momentum its proponents are hoping for. “It was the point at which we cut the ribbon on the plant and became operational that we got people’s attention,” Paganini says. “Now, the mandate becomes real. You’ve got interest from the generators and the haulers, because there is a destination point for organics in the state, and that is when they started to act, quite frankly,” Paganini says.

Piece of the Puzzle
Both Paganini and McCrae Kessler point out that the state’s organics diversion law is just one piece of an intricate puzzle that developers are working to assemble in order to create an environment where projects like theirs can flourish. “In states that have food diversion programs, typically, there are other bolt-on incentives, such as clean energy offtake programs, to incentivize digester developments,” Paganini says.

Still, while some states have net-metering laws that bolster the energy revenue from these projects, they are not yet in place in every market. “The energy revenue is a really important piece,” says McCrae Kessler. “Energy contracts are really important, and while Massachusetts has done a great job with net metering, Connecticut is really lagging behind. For us, that has certainly been an issue.”

All of the states with food waste diversion laws on the books are hopeful that the laws will result in a continued increase in the amount of organic material diverted from landfills over time. In some instances, escalators are built into the laws via a gradual reduction in generation thresholds. Connecticut’s law applies to generators of 104 tons per year now, but by 2020, will apply to anyone producing more than one ton per week. Vermont’s organics diversion law has the state aiming for a total ban on organics in landfills by 2020.

The goals outlined in these laws will require project developers to navigate factors that the laws don’t and can’t address. Organics diversion laws mandate that the generators of food waste divert those materials away from landfills once a local processing facility comes online. But the law does not state that generators must use the nearest facility, nor does it mandate a certain tipping fee. Further, the laws do not guarantee energy sales at certain prices, and they make no provisions about the sale of the nutrients harvested from facilities like those of Quantum Biopower or Turning Earth. Achieving the intended goals of these diversion laws will require biogas operators to build facilities on a strong foundation of project fundamentals, commission them efficiently, and operate them consistently, once they come online. Organics diversion laws cannot guarantee any of that will happen. Still, developers like Paganini and McCrae Kessler find them invaluable as they work to get Connecticut’s first processing sites up and running.

Adds McRae Kessler, “I think organics diversion laws are just one spoke on a wheel of legislation that will ultimately result in the kind of build out people are looking for.”

Author: Tim Portz
Executive Editor, Biomass Magazine