Dive Brief:
- Dominion Energy announced a $200 million partnership with Vanguard Renewables on Wednesday to develop five farm-based anaerobic digesters. Dominion will own the projects and a Vanguard subsidiary will design, develop and operate them.
- The announcement follows the creation last year of Align Renewable Natural Gas (RNG) — a joint venture between Dominion and Smithfield foods. The two companies in October announced they would spend a combined $500 million on renewable natural gas projects through 2028, doubling their previous investment.
- The projects with Vanguard, sited in Georgia, Nevada, Colorado, New Mexico and Utah, are expected to wrap up development and begin operations in the next five years or sooner, Dominion spokesperson Aaron Ruby told Utility Dive. The projects will produce a collective 1 billion cubic feet of RNG.
Dive Insight:
Dominion's partnership with Vanguard is not a direct RNG service to Dominion customers, rather Dominion is acting as the capital partner by investing in, owning and marketing the projects. Though Vanguard's anaerobic digesters typically can include manure or food waste, or a combination of both, these projects will focus exclusively on manure-to-energy, according to Ruby.
Driving the utility's gas arm to invest in such projects is customer demand for lower emitting gas, including large commercial and industrial customers, said Ruby. A dairy waste-to-energy production would include 20,000 to 30,000 cows, where the manure is processed through Vanguard's anaerobic digesters, capturing the methane that would have otherwise been emitted. The process cuts emissions from agricultural operations and opens up an additional revenue stream for those farms as well.
CenterPoint Energy proposed a renewable natural gas option for its customers in August 2018, which was later rejected by Minnesota regulators in June. Vermont Gas and Southern California Gas Company both have voluntary programs as well, though the practice overall is not very widespread. But interest is growing as the utility and transportation sectors push to decarbonize, Matt Tomich, president of advocacy group Energy Vision told Utility Dive.
"The norm historically was for utilities to ... do everything they could to make it difficult for biogas producers, whether that be agricultural projects or landfill projects or others, to get access to the pipeline network," he said.
But now, more utilities are open to the idea as consumer demand for lower-emission fuels is growing. And partnerships are a boon to farmers as well.
"The dairy industry in particular has struggled from depressed milk prices and overall challenging economics for the last several years," said Tomich. "And so to us, this is also another kind of source of income and a new way to improve on farm economics.
Correction: The five projects will produce 1 billion cubic feet of RNG in total.
