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Baker Tilly refers to Baker Tilly Virchow Krause, LLP,
an independently owned and managed member of Baker Tilly International.
Developing RNG Projects
for Economic Success
Jessica Giffey
Senior Consultant
Baker Tilly
> Ranked as one of the top 12 largest accounting and consulting firms in
the U.S. with over 2,500 professionals
> Energy Consulting team with offices in Madison, Chicago, and Austin
Diverse Clients Served
We serve our clients through our industry teams
Energy and Utilities
> Nationwide energy practice: More than 40 years experience and over 400 energy and
utility clients nationwide - electric, water, waste water, storm water, and gas utilities
> Dedicated Renewable Energy Group: Focused on development and financial solutions to
get projects to the finish line in a way that maximizes client value and minimizes risk. We
work with more than 40 active projects representing over 1,000 MW.
Manufacturers and Food & Beverage
> Seventy-five years serving manufacturers: We serve more than 2,300 manufacturers
and wholesale/distributors with over 230 in the Food and Beverage industry.
State and Local Government
> Work closely with municipalities and other non profits: Experience with
municipal/government leaders allows us to understand diverse perspectives. We work with
more than 150 higher education and research institutions across the United States.
Baker Tilly Capital
> Licensed broker dealer to raise debt and equity on behalf of client needs.
Biogas Experience
We have been involved with 15+ biogas projects that are
either operating or under construction involving more than
$220 million of funding with roles in:
> Development Support
Design basis and business model creation
Feedstock agreements, energy purchase agreements,
solids agreements
EPC, O&M and technology procurement agreements
> Accessing State & Federal Incentives
> Financial Advisory and Capital Procurement
Developing RNG Projects for Economic
Success
Common Project Development Themes:
> Not easy to bridge varying perspectives between engineering, energy, financial and industry
> Without clearly defined goals for each party, predevelopment expenses can become very costly
> RNG is new for lenders relative to traditional electrical power purchase agreements
Developing RNG Projects for Economic
Success
> No single solution
> Project success depends on site and
circumstances Digester Capacity
Future Growth
Existing Biogas
Use
Biogas Flow
Variation
Understand current state
Developing RNG Projects for Economic
Success
> Goal to find highest and best use of biogas
– Revenue generation (RNG sales) or cost avoidance (CHP) strategy?
> Understand your circumstances
– Electrical generation limits
– Direct injection opportunities
> Understand the market
– Growth or coordination opportunities
Build the business case
Case Study
Municipal Water Reclamation Authority
Serving 500,000 at 60 MGD
575,000 CF biogas produced annually
Looking for best use of biogas
Understand Current State
> 60% of available biogas used
> Remaining gas is flared
60% 40% 100%
Biogas Electricity Heat
> Generation produces 40% electrical needs
> Waste heat satisfies 100% of natural gas needs
Understand Current State
0
250
500
750
1000
1250
1500
1750
2000
Bio
gas P
rod
ucti
on
(cfm
)
Biogas production over one year
Available Biogas
0
250
500
750
1000
1250
1500
1750
2000
Bio
gas P
rod
ucti
on
(cfm
)
Biogas production over one year
1750 cfm capacity Available Biogas
0
250
500
750
1000
1250
1500
1750
2000
Bio
gas P
rod
ucti
on
(cfm
)
Biogas production over one year
1750 cfm capacity 1500 cfm capacity Available Biogas
0
250
500
750
1000
1250
1500
1750
2000
Bio
gas P
rod
ucti
on
(cfm
)
Biogas production over one year
1750 cfm capacity 1500 cfm capacity 1250 cfm capactiy Available Biogas
+14%
+8%
Borderline
Returns
Build the Business Case
Best financial performance: condition all available biogas for injection into natural gas pipeline
Purchase electricity to replace generated loads
Purchase natural gas for heat
Avoid expenses related to generator O&M
Capital Expenditure
Biogas Conditioning Equipment
36%
Installation 12%
Pipeline Interconnect
11%
Construction 41%
Net Revenue
Brown Gas Sales 11%
D3 RIN Sales 74%
RIN Broker Payment
-15%
Operating Expenses
Biogas Conditioning
Energy Parasitic
24%
O&M 5%
RNG Transport
6%
EPA Registration
2%
Electricity & Natural Gas
Purchase 63%
Financial Analysis
Case Study
Simple Payback 2.5 years
Average Cash Flow $ 4,700,000
Unlevered IRR (5 Year) 28.8%
Case Study @ $.062/kWh @ $0.15/kWh
Simple Payback 2.5 years 3.6 years
Average Unlevered Cash Flow $ 4,700,000 $ 3,200,000
Unlevered IRR (5 Year) 28.8% 11.5%
Case Study @ $.062/kWh @ $0.15/kWh
Simple Payback 2.5 years 3.6 years
Average Unlevered Cash Flow $ 4,700,000 $ 3,200,000
Unlevered IRR (5 Year) 28.8% 11.5%
Case Study @ $0.15/kWh
with generation
Simple Payback 3.4 years
Average Unlevered Cash Flow $ 3,300,000
Unlevered IRR (5 Year) 13.7%
100% RNG
80% RNG with generation
Developing RNG Projects for Economic
Success
Understand current state
Define project goals
Build the business case
Contact
Jessica Giffey
Senior Consultant 608-240-6765
• Specializes in economic use case analysis for process and utility intensive projects
• Capital and operational expense budgeting
• Detailed business case modelling
With eight years experience in engineering and project management, Jessica knows it’s
not easy to bridge the varied perspectives that exist between engineers, energy,
financial, and industrial professionals. Her work brings together technical and financial
perspectives through research, data analysis, and detailed modelling to help clients ask
the right questions, define their project needs, and develop feasible solutions.
Prior to joining the firm, Jessica worked for Nexant, Inc. where she managed the
implementation of Commercial and Industrial energy efficiency programs for several
Fortune 500 and 1000 Investor Owned Utilities. Before joining Nexant, she developed
new products as a Design Engineer for SubZero Inc. Jessica holds a degree in Physics
from the University of Wisconsin. 17
Disclosure
Pursuant to the rules of professional conduct set forth in Circular 230, as promulgated by
the United States Department of the Treasury, nothing contained in this communication
was intended or written to be used by any taxpayer for the purpose of avoiding penalties
that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be
used by any taxpayer for such purpose. No one, without our express prior written
permission, may use or refer to any tax advice in this communication in promoting,
marketing, or recommending a partnership or other entity, investment plan, or
arrangement to any other party.
Baker Tilly refers to Baker Tilly Virchow Krause, LLP, an independently owned and
managed member of Baker Tilly International. The information provided here is of a
general nature and is not intended to address specific circumstances of any individual or
entity. In specific circumstances, the services of a professional should be sought.
© 2016 Baker Tilly Virchow Krause, LLP
