CNG as an Alternative to Diesel Solid Waste Association of North America January 21, 2016 Rick Wallace Oregon Dept of Energy Cory Ann Wind Oregon Clean Fuels Program 1
Carbon Intensities Example: Petroleum Fuel Example: Biofuel Fuel 4
Average Carbon Inteisty (gco2e/mj) 101.00 99.00 97.00 95.00 93.00 91.00 89.00 87.00 Clean Fuel Standards Generates Credits Blends higher than B5 Blends with canola, corn oil, used cooking oil Renewable diesel Propane CNG Renewable gas (landfill, WWTP, digester) Generates Deficits Clear diesel B5 (soybean) 85.00 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Gasoline 97.80 97.56 97.31 96.82 96.33 95.36 94.38 92.91 91.44 89.98 88.02 Diesel 98.48 98.23 97.99 97.50 97.00 96.02 95.03 93.56 92.08 90.60 88.63
Credit Generation Potential Year Fuel Type Carbon Intensity (gco2e/mj) Volume Units Number of credits 2016 ULSD 101.65 10,000 gallons -4.43 2016 Fossil LNG 94.46 10,000 gallons 2.90 2016 Propane 83.05 10,000 gallons 14.65 2016 Fossil CNG 79.93 1,000,000 scf 17.93 2016 Biodiesel (Soybean) 58.25 10,000 gallons 47.80 2016 Biodiesel (Canola) 57.84 10,000 gallons 48.29 2016 Biodiesel (Corn oil) 36.89 10,000 gallons 73.33 2016 Renewable Diesel (tallow) 33.46 10,000 gallons 83.87 2016 Landfill LNG (Clean Energy) 25.50 10,000 gallons 55.89 2016 Biodiesel (Used Cooking Oil) 18.12 10,000 gallons 95.77 2016 Landfill CNG (Clean Energy) 13.67 1,000,000 scf 82.87
Who can Generate Credits? Importers of ethanol, biodiesel and renewable diesel Oregon producers of ethanol and biodiesel Owner of the fueling equipment for CNG/LNG/LPG Producer or importer of renewable CNG/LNG
Fleet Conversion to CNG Example Diesel Avg. diesel $ = $2.25 gal/12 yrs Fuel Excise Tax = $0.243 gal DEF = 2.5 gal/100 gal of diesel DEF = $2.00 gal bulk Conversion Cost: $34,000/vehicle Fueling Infrastructure Cost: $550,000 CNG Avg. CNG $ = $1.12 dge Maint. & Op = $0.13 dge Electricity = $0.08 dge Plus a $250 month charge Fuel Excise Tax = $0.184 gge Fleet Biography: 10 vehicles over 12 years 14,620 Average Annual Miles 2.15 mpg 6,800 dge/veh 6
Annual Fuel Costs Diesel CNG Annual Fuel Cost = $156,400 Annual Fuel Cost = $79,729 Annual Excise Tax = $16,524 Annual Excise Tax = $14,121 Total Annual Fuel Baseline Cost: $172,924 Total Annual Project Fuel Cost: $93,928 Total Annual Fuel Savings: $78,996 7
ROI & Savings Total vehicle incremental costs = $340,000 Total Fueling Infrastructure costs = $550,000 Annual fuel savings = $78,996 Total Vehicle ROI: 4.30 years Total Project ROI: 11.27 years Total Project Savings After Veh. ROI: $607,954 Project Fuel Savings After Fueling & Veh. ROI: $57,954 8
Oregon Energy Incentive Program Transportation Incentive Capped at $20 million/biennium In 2015 17, balance will be split between: Alternative fuel vehicles & alternative fuel vehicle infrastructure Program sunsets 12 31 2017 9
EIP Fees Application fee pays for review to determine application is complete, set up file, etc. Technical review fee pays for technical review and is first step in process; results in preliminary certification Project amendment fee paid if owner amends scope or schedule or other substantive way that could result in technical review Final certification fee pays for technical review following project completion as well as initial inspection, if required; could result in final certification NOTE: Pass through fee pays for optional services related to pass through program 10
Monetizing the Credit Passing through the credit to another entity Pass through rate = net present value Rate is set at time of preliminary certification Pass through partner Project owner has responsibility to find a partner Department can assist NOTE: Pass through fee pays for optional services related to pass through program 11
Using Incentives to Reduce ROI Total Vehicle Conversion Cost: $340,000 Incentive: 35% $119,000 Estimated Reduction with Pass Through: $19,944 Estimated Fees: $4,240 Your Reduction in Vehicle Project Costs:$94,816 Total Fueling Infrastructure Cost: $550,000 Incentive: 35% $192,500 Estimated Reduction with Pass Through: $31,939 Estimated Fees: $6,550 Reduction in Fueling Infrastructure Costs: $154,011 12
With Oregon Incentives Project Final Costs and Savings Vehicle costs go from $340,000 to $245,184 ROI goes from 4.3 to 3.1 years Project Savings goes to $702,770 Fueling costs go from $550,000 to $395,989 ROI for Veh. & Fueling goes from 11.27 to 8.12 years Project Savings goes to $308,085 13
Other Incentives Conservation tax credits Up to 35% of eligible project costs Must have a greater than 3 year payback Renewable energy grants Must generate electricity Up to 35 % of eligible project costs Cannot exceed $250,000 14
With Federal Incentives Project Final Costs and Savings Tax credit of 30% up to a cap of $30,000 for fueling infrastructure Fueling costs go from $395,989 to $365,989 Total project costs after incentives = $611,173 ROI for Veh. & Fueling goes from 8.1 to 7.7 yrs Project Savings goes to $336,781 15
Alternative Fuel Vehicle Revolving Loan Fund 16
Estimated Clean Fuels Program Credits Estimated reduction in GHG emissions = 141.25 MT/yr CA. credit is currently selling at $120/MT Estimated annual credits = $16,950/yr ROI for project goes from 7.7 to 6.37 years Savings after ROI goes from $336,781 to $540,182 17
Federal Fuels Excise Tax Rebate Rebate has been in existence since 2005 however it has required that the credit be re authorized several times, sometimes retro active. Rebate is $0.50/gge Fleet uses 77,178 gge Rebate is $38,589/year ROI for project goes from 6.37 to 4.54 years Savings after ROI goes from $557,535 to $1,013,458 18
Questions? Rick Wallace 503 378 3265 Rick.wallace@state.or.us Cory Ann Wind 503 229 5388 Wind.cory@deq.state.or.us