POWER May 2021 - 9

GLOBAL MONITOR
The investment firm also suggested RNG potential in the
power sector, which consumed 12 times more natural gas
than the transportation sector in 2019, is still untapped. " We
expect [renewable portfolio standard (RPS)] programs similar
to Oregon's SB 98, a first-of-a-kind bill that sets 30-year targets
for gas utilities to procure RNG and renewable hydrogen
for customers, to drive demand growth in power generation
markets, " it said.
However, Stifel cautions that RNG power, which is classified
as renewable power, could face an uphill battle owing to
incentives that are designed to boost solar and wind. " Due to
increasing renewable electricity supply from solar and wind,
[renewable energy credits (RECs)] under RPS programs have
historically traded at a significant discount to D3 [Renewable
Identification Number (RIN)] prices under the [federal Renewable
Fuel Standard]. The premium received for RINs explain
why most of the RNG is consumed by the transportation sector, "
it explained. " Assuming no change in the pricing dynamics
between RECs and RINs, and the continued proliferation of
solar and wind capacity, we do not foresee RNG playing a significant
role in the generation of renewable electricity, " it said.
RNG's growth potential is so promising, gas pipeline companies
are actively making enhancements to business practices
to accommodate it. Energy infrastructure giant Kinder Morgan
earlier this year noted about 78 million cubic feet per day
(MMcfd) of RNG was produced in 2019-which accounted for
less than 0.1% of its natural gas supply for the year. " Between
landfills, dairy farms, swine farms, and other RNG sources, the
National Renewable Energy Laboratory estimates RNG has the
potential to scale up to 1.15 billion cubic feet per day (Bcfd) in
the U.S., or about 1.25% of the 2019 U.S. natural gas supply, "
the company said.
To prepare for a potential expansion in RNG market demand,
since 2018, Kinder Morgan has put five RNG sites in service
on its El Paso Natural Gas, Tennessee Gas Pipeline, and Colorado
Interstate Gas (CIG) pipeline systems. " These locations
are capable of moving 18 MMcfd of RNG, which could have
accounted for nearly 25% of the market share in 2019, " it said.
According to Stifel, however, the additional infrastructure associated
with connecting exponentially more RNG to existing
natural gas pipelines could pose high costs and long lead times.
Differences in U.S. pipeline specifications also create another
challenge, owing in part to RNG's slightly lower (and varying)
Btu value when compared to geologic natural gas. Yet another
challenge is that biogas feedstock quality can also vary over
time, requiring significant treatment investments. Finally, the
RNG industry continues to grapple with a common misconception
that RNG is sub-par quality compared to fossil natural gas.
-Sonal Patel is senior associate editor for POWER.
Japan Pulls Back from Coal, Though New Plants
Move Forward
Japanese financial institutions and energy companies continue
to move away from supporting coal-fired power generation,
as the country's leadership reiterates what it says is an
" unwavering resolve to decarbonize. " Several of the country's
investment banks and other financial institutions have signaled
their unwillingness to continue support of coal projects,
and energy major Mitsubishi in late February said it is pulling
out of the $2 billion, 2-GW coal-fired Vinh Tan 3 power plant
project in Vietnam, marking its first exit from a coal project.
Mitsui & Co. has told Indonesian officials it plans to sell its
stake in Paiton Energy, an independent power producer in InMay
2021 | POWER
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POWER May 2021

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