By John Downey – Senior Staff Writer, Charlotte Business Journal
A Raleigh company with plans to build seven swine and agricultural waste plants in North Carolina — including one near Monroe — has asked regulators to allow it to participate in a pilot biogas program.
GESS International Inc., which moved its headquarters from California to Raleigh last year, says in filings with the N.C. Utilities Commission that each plant would cost about $30 million to build and would employ 16 to 19 workers, once they are in operation.
Shaun Lee, director of field operations for GESS, says his company plans to bring several of the projects online next year. The Monroe project would be one of those, he says.
Monroe and one other project have contracts to sell gas to utilities owned by Duke Energy Corp. (NYSE: DUK) to help them meet state renewable energy requirements. The remainder would be sold to Texas-based Element Markets, a major national broker of environmental energy products and services, for resale to customers in unregulated markets outside of the Carolinas.
But to be able to start operations in 2019, the company must get permission from the N.C. Utilities Commission to participate in a limited pilot program for companies that want to inject alternative gases — usually biogases — into the pipeline system of Charlotte’s Piedmont Natural Gas Co. Inc.
Lacking guidelines
The commission unexpectedly created the three-year pilot program and appeared to limit participation in a June order on setting purity standards that biogases must meet in order to be transported in Piedmont’s pipelines.
The commission said it worried that untested gases might cause corrosion to Piedmont’s pipelines or damage to lines and equipment operated by customers.
The original order grandfathered into that pilot two projects that were already approved. The commission last week allowed a third project to participate. But regulators have not set out clear guidelines on how they will determine if new projects qualify for the program.
The N.C. Pork Council and some in the biogas industry have worried that the pilot could slow development of new biogas projects in the state. And they worry particularly about its impact on projects that produce biogases from swine waste. Using that gas to produce electricity is seen as the primary way that Duke and other utilities in the state will attempt to meet state requirements for having a small percentage of the power they produce each year come from renewable, swine-waste sources.
Unique features
Lee says GESS (which stands for Green Energy Sustainable Solutions) believes that regulators and Piedmont will soon work out the pilot program issue. And he says that developers in the meantime can develop plants that inject gas into Gastonia-based PSNC Energy’s pipelines and the Transco Williams interstate pipeline.
But the seven immediate projects GESS has on tap would all use Piedmont to transport their product. The company applied Thursday to have five of them, including the Union County project, accepted into the pilot. Lee says it will apply to allow two more — in Wilson and Nash counties — into the program as early as today.
The application says GESS’ projects have unique features that will give regulators more data from which to assess the impact of alternative gases.
Each of the GESS projects (all built on the same design) would use a mixture of about 70% swine waste with the rest of the feedstock coming from other agricultural products. Almost all of that would be vegetative products — corn husks, potato vines, miscanthous gas and others. The Union County plant would also use some mixture of chicken waste in the mix.
Big bucks
And GESS is looking at using a different system to insert the gas into Piedmont’s pipelines. Rather than have a direct pipeline connection to Piedmont (as Wilmington-based Optima BioEnergy does for its gas plants), GESS intends to truck pressurized gas from its production facilities to injection points assigned by Piedmont.
The gas will be inserted into Piedmont’s systems at those points.
The five initial plants would together cost about $149 million to build, GESS calculates. The Nash and Wilson plants would add nearly $60 million more to that investment.
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