Xcel, Microgy Sign Ten-Year Biogas Deal

[Fledermaus]

Environmental Power Corporation’s (NASDAQ: EPG) subsidiary, Microgy, Inc. and Xcel Energy (NYSE: XEL) announced a long-term renewable natural gas (RNG®) supply agreement on Tuesday.

Microgy will use an anaerobic digestion process to break down animal waste from a local dairy farm and other organic waste products, such as food processing residuals, from along the Front Range of Colorado. The waste stream will be converted to methane gas using the anaerobic digesters. In turn, the methane will be used by Xcel Energy to help produce electricity at its Fort St. Vrain natural gas-fired power plant near Platteville, Colorado.

Pending regulatory approval, the agreement will help Xcel Energy continue to meet its mandates under the state’s Renewable Energy Standard (RES).

The ten-year agreement with Xcel Energy has an option to renew for an additional ten years. Under this agreement, Microgy’s RNG® will be sold on a fixed-price basis at a premium to the current market price for traditional natural gas.

Microgy expects to begin construction on its first Colorado RNG® facility during the first half of 2010, when it currently estimates that all permits, design and funding for the project will have been completed. Microgy’s initial project in Colorado is expected to produce 915,000 MMBtu of RNG® per year, enough to generate 125,000 megawatt-hours of electricity, or the equivalent power use of 17,000 homes in Colorado on an annual basis.

http://www.sustainablebusiness.com/index.cfm/go/news.display/id/17790

[kestrel91316]

1. Yay. Good idea. Lots of dairy herds in the area.

I thought there was a nuclear plant at St Vrain but that was a long time ago. Probably shut down.