Mayor Sanders, Council President Pro Tem Faulconer Break Ground on Point Loma Beneficial Use of Digester Gas Project

April 18, 2011

Contract by BioFuels Energy includes
design/build by SCS Energy/SCS Engineers 

San Diego, CA — San Diego Mayor Jerry Sanders and Council President Pro Tem Kevin Faulconer today officially marked the start of construction of a project to purify the wasted methane biogas from the Point Loma Wastewater Treatment Facility. Once construction is completed, the BioFuels Energy project will deliver clean natural gas to the San Diego Gas & Electric (SDG&E) natural gas system. The gas will ultimately be used to power fuel cells and provide renewable power generation at the City of San Diego’s South Bay Water Treatment Plant and UC San Diego.

BioFuels Energy, LLC, secured the long-term biogas rights for the project and two private equity funds will provide all necessary capital: New Energy Capital Cleantech Infrastructure Fund and the Cleantech Alliance Fund. SCS Energy/SCS Engineers will design and build the plant to meet pipeline injection standards. The $12 million gas processing facility is slated for completion by the end of October of this year.

“This is a great example of why San Diego is a leader in green tech and clean tech. This project makes sense for the City on all fronts and takes advantage of an existing resource that wasn’t previously being tapped,” said Mayor Sanders.

“Not only is this a huge step in renewable energy, but the city will also make money by selling the Point Loma Wastewater Treatment Plant’s biogas,” said Council President Pro Tem Faulconer. “One thing that attracted me to the project is the lack of pollution for residents. The methane is turned directly into electricity without nitrogen or sulfur oxides or other particle pollutants because there is no combustion.”

This is the first commercial project in California to purify wastewater treatment digester gas for injection into the SDG&E natural gas delivery system.  Gas from the Point Loma Wastewater Treatment Facility will annually provide 4.5 megawatts of energy, enough to power more than 4,500 homes, and will provide the city with $3.5 million of revenue over the 10-year contract.  “Instead of flaring this gas, it will be put to constructive use to reduce our dependence on other fuel sources,” Jeff Pierce, vice president of SCS noted.

“This is an innovative project that is opening the door for other similar projects in California and across the country,” said Ken Frisbie, managing director of BioFuels Energy. “Methane has a huge potential as a renewable energy source.”

BioFuels’ biogas purification must meet all of SDG&E’s Rule 30 specifications, including those for biomethane gas delivery.  Under the rule, “biogas” is defined as being derived from renewable organic sources, which includes wastewater treatment anaerobic digesters.

“We are pleased to be part of this unique project that helps the City of San Diego reduce its greenhouse gas emissions, utilize its biogas resources, and help the City, BioFuels and UC San Diego generate renewable electricity,” said Caroline Winn, vice president of customer services for SDG&E. “Accepting the conditioned biogas in our system allows it to be cleanly transported to its destination in a way that is virtually invisible to the surrounding community.”

The Point Loma facility is the City’s largest wastewater treatment plant and processes roughly 175 million gallons of wastewater per day. City officials estimate that this project will eliminate more than 68,000 pounds of nitrogen oxides, sulfur oxides, and other pollutants annually.

The fuel cells, located at UC San Diego and the City’s South Bay Water Treatment Plant, will be provided by FuelCell Energy.  U.S. Bank, through their Community Development Corporation, is providing financing for the purchase and installation of the fuel cells.  The Bank will earn tax credits through new market tax credit allocations provided by TELACU.  U.S. Bank was recently recognized by Bank Technology News as one of America’s greenest banks.

“The BUDG project is part of our overall commitment to clean energy,” said Jim Wening, president of U.S. Bank in San Diego. “We are proud to put the power of our organization behind these efforts.”

BioFuels was also able to secure incentives through the California Self Generation Incentive Program administered by the California Center for Sustainable Energy in San Diego.