The technical potential of renewable natural gas (RNG) in the United States, and the economic potential of methanation-derived RNG in Texas

Brynjolfur V. Olafsson, December 2014 (Citation)

Abstract

Renewable Natural Gas (RNG) is a low-carbon fuel source that is derived from the anaerobic digestion (AD) or thermal gasification (TG) of biomass, or produced using renewable electricity through the methanation of carbon dioxide. This thesis uses a thermodynamic balance to determine the total technical potential of RNG in the United States, as well as the future technical potential of methanation-derived RNG based on growth curves for renewable electricity. Furthermore, this work establishes an analytic decision-making framework for determining on a rolling basis, from an economic standpoint, whether to sell electricity directly to the grid, or produce and sell methanation-derived RNG. This framework is used to establish the economic potential of RNG, based on Texas wind resources. This work details the formulation of a model that determines which production option generates more marginal profit, based on fluctuating electricity and gas prices. The model also aggregates the total amount of electricity and RNG sold, assuming that the main objective is to maximize the marginal profit of integrated wind- and methanation facilities. This work concludes that the annual technical potential of methanation-derived RNG nationally was 1.03 Quads in 2011. The technical potential of biomass-derived RNG was 9.5 Quads. Thus, the total 2011 technical potential of RNG in the United States was 10.5 Quads, or equal to roughly 43% of the total US consumption of natural gas that year. Assuming a constant, 80% electrolyser efficiency, the technical potential of methanation-derived RNG is expected to rise at an average rate of 1.4% per year, following growth curves for renewable power, until the year 2040, when it will be 1.54 Quads. The 2011 economic potential of methanation-derived RNG in Texas was between 2.06×10⁷ MMBTU and 3.19×10⁷ MMBTU, or between 19.4% and 30.1% of the corresponding annual technical potential. Furthermore, the total marginal profit increase from introducing the option of producing and selling methanation-derived RNG was around $366 million, given a ‘best case scenario’ for the state of Texas.

Citation

Brynjolfur V .Olafsson,Mechanical Engineering,December 2014,“TheTechnical Potential of Renewable Natural Gas (RNG) in the United States, and the Economic Potential of Methanation-derived RNG in Texas”