Business case: landfill biomethane

Today, the spread of landfill methane gas is still a significant source of greenhouse gases.

Figure 1: Landfill methane emissions

The biogas produced from landfill sites can be efficiently used if purified to make a gas with methane concentration of > 97%, known as biomethane.

Figure 2: Biogas purification process

During 2020, I.G.W. was commissioned to carry out a feasibility study with the specific aim of exploiting the gas naturally produced in landfill sites for the production of biomethane for transport. The landfill site used for the product has been running for several years, disposing of special waste of different types.

The work concluded with the authorisation for a gas purification plant to produce biomethane.

The work was carried out in four stages:

1. Survey into the acceptable and accepted waste with resulting estimate of potential biogas production
2. chemical analysis of the biogas produced
3. based on data collected (points A and B), choice of size and type of upgrading plant
4. business plan for investment with sensitivity analysis of different biogas production scenarios

A – Survey into the chemical and physical characteristics of accepted and acceptable waste

The mathematical models that make it possible to foresee the amount of biogas that can be produced from a landfill site is essentially based on these parameters: a) amount of waste conferred, b) commodity mix of the waste and relevant biodegradable organic carbon content (the fact that, if only inert materials are conferred, the expectation for gas production is zero, goes without saying), c) temperature and moisture in the landfill area.

1. Quantity: based on the volumes available, considering the gradual increase in conferred waste density resulting from stabilisation, the amounts conferred to date were identified.
2. Historical analysis of data regarding the type of waste accepted was the basis for carrying out an estimate of biogas production per unit of waste in the landfill. Starting with the division according to EER code of the waste accepted, considering that: the EER codes are numerical sequences consisting of 6 digits in pairs to identify waste, as a rule, based on its original production process; based on this information, commodity and chemical characteristics were allocated to the different types of waste.
3. The environmental parameters were obtained from bibliographical enquiries and measurements in the field. The climate of the survey area can be defined as “Mediterranean” and characterised by long periods of dry weather in summer and moderately rainy winters with mild temperatures.

The assessment of biogas production from the landfill and its development over time played an extremely important role in assessing the sustainability of the initiative. The gas purification system’s capacity for treatment had to be related to envisaged production in order to make the most of all of the biogas produced. Since the landfill site is operational, information about current gas production was used to assess the mathematical model that best described the site’s gas production dynamic.

The model that best represented the current situation was then used to estimate future production.

To quantify the biogas produced, based on available data, three different mathematical models were used with the possibility - knowing the production data for extracted biogas relevant to the years 2019-2020 - to check consistency and evolution. Since biogas production for the years 2019 and 2020 is known, it was possible to check the adaptation of models to the actual situation. As mentioned previously, the model that best described the current situation was used to estimate future productivity.

Figure 3: Gas production curves. Each curve in a different colour represents the data returned from the applied model.

After checking the reliability of the model, we estimated future producibility. This estimate is of fundamental importance to identify the period in which the gas flow will no longer sustain the production process (figure 3), as well as for the choice of a suitable plant size.

Since the type of waste potentially acceptable to the landfill site is extremely varied, 3 different scenarios were set out, based on the biodegradability of the waste, which would allow a technical and economic analysis to be carried out.

Figure 4: Estimated gas production

B – Gas quality

Gas, to be able to be released into the network, must meet specific requirements, set out in Italy by the UNI 11537 standard.

Table 1: Comparison between extracted biogas and quality of gas for release into the network.
*For this component, the acceptability value is intrinsically limited by the acceptability field of the Wobbe index

C – Choice of upgrading type

As is well known, biogas is a mix of other gases, in variable proportions according to origin. It mainly consists of methane and carbon dioxide. In landfill biogas, nitrogen and oxygen are also found, proportionate to the presence of air in the environment (the landfill is not an airtight container).

Based on analysis, the choice was made for series installation of: active carbon pre-treatment for the removal of COV and Hydrogen Sulphide, PSA for the removal of Carbon Dioxide, and NRU for Nitrogen removal.

Figure 5: Synthetic flow diagram of processes

Two leftover gas flows are generated from the purification system, OFF-GAS. These are characterised by a residual percentage of methane, %CH4, which is different according to the different treatment processes that the gas undergoes inside the plant itself.

1. OFF-GAS at the PSA output, destined to RTO (S.O.V. combustion plant with thermal regenerative recovery). Since this flow contains a residual amount of methane, in order to completely reset GHG emissions to zero, the off-gas is destined to combustion.
2. OFF-GAS +N2, this flow has a higher methane concentration and will be sent to two co generators already at the site, to add to the flow of biogas, for the generation of electricity needed to support the processes.

D – Business plan

Based on the flow of gas estimated, a subsequent technical and costing analysis for the project was carried out based on various scenarios: variability of gas production, gas market.

Table 2: Investment analysis

Table 3: Operating cost analysis

The economic analysis was carried out starting from a basic scenario, on the basis of which sensitivity analyses were performed, considering three different landfill gas production sites, based on the biodegradability of the waste accepted over the coming years (Table 4) and three different prices for the gas produced (Table 5).

Table 4: Biogas production scenarios

Table 5: Natural gas price scenarios at PSV

Subsequently, the economic - financial evaluation performed for all different scenarios was summarised, using the main indices: the Current Net Value (VAN), Pay Back Time (PBT), and Internal Rate of Return (TIR).

The evaluation was also set out with two Project financing options:

• Exclusive use of own means and therefore, renouncing possible financial leverage (“full equity” or “unlevered”);
• Using own means in a minority share and bank financing for the remaining share (“levered” with medium to high leverage, 70% debt vs 30% equity sponsor).

Table 6: Synopsis of the main economic and financial indicators