LANDFILL GAS TO ENERGY USES AND REGULATION IN BRAZIL LANDFILL GAS TO ENERGY USES AND REGULATION IN BRAZIL Editorial information: This report was written by multiple authors, including the following individuals: Matthew Gardner (National Association of Regulatory Utility Commissioners) Anne Goodge (Public Utilities Commission of Ohio) John Rogness (Kentucky Public Service Commission) Consultants from the Brazilian Ministry of the Environment Prepared by: This report was coordinated and organized by the National Association of Regulatory Utility Commissioners (NARUC) This publication was developed under Assistance Agreement No. XA834446 01 0 awarded by the U.S. Environmental Protection Agency. It has not been formally reviewed by EPA. The views expressed in this document are solely those of the National Association of Regulatory Utility Commissioners grantee and EPA does not endorse any products or commercial services mentioned in this publication. Table of Contents LANDFILL GAS TO ENERGY USES AND REGULATION IN BRAZILLANDFILL GAS TO ENERGY USES AND REGULATION IN BRAZIL .......................................................................................................... 1 ACKNOWLEDGEMENTS ................................................................................................................... 3 ACRONYMS ..................................................................................................................................... 4 CHAPTER 1: BACKGROUND ............................................................................................................. 6 NARUC Regulatory Partnership to Promote Landfill Gas-to-Energy (LFGTE) projects in Brazil . 6 The Global Methane Initiative (GMI) ......................................................................................... 6 Landfill Gas and Energy in Brazil ................................................................................................. 7 Summary of the activities organized during the NARUC Regulatory Partnership ...................... 7 CHAPTER 2: LEGAL AND REGULATORY CONSIDERATIONS IN THE UNITED STATES ..................... 12 Introduction .............................................................................................................................. 12 Federal Laws ............................................................................................................................. 12 Renewable Energy Portfolio Standards .................................................................................... 19 CHAPTER 3: LEGAL AND REGULATORY CONSIDERATIONS IN BRAZIL ................... 21 Landfill Gas to Energy Use in Brazil and Regulations - Executive Summary ............................. 21 Introduction ............................................................................................................................. 21 Waste Management ................................................................................................................. 22 Cost of waste to the population ............................................................................................... 22 Outsourcing services ................................................................................................................. 23 Landfills and power generation ................................................................................................ 24 Bandeirantes Landfill - São Paulo, SP ........................................................................................ 26 Metropolitano Centro Landfill, Salvador, Bahia ....................................................................... 27 CTRS Landfill- Belo Horizonte, Minas Gerais ............................................................................ 29 Nova Gerar Landfill - Nova Iguaçu, Rio de Janeiro.................................................................... 30 Regulating Electric Power Production and Marketing by Independent Power Producers and Self-Generated Power Producers - The National Interconnected System ............................... 33 The Brazilian Market for Electricity .......................................................................................... 34 Regulatory Framework of the Brazilian Power Sector .............................................................. 37 Organization of the Brazilian Energy Sector ............................................................................. 41 National Electric Energy Agency (ANEEL) ................................................................................. 44 National Bank for Economic and Social Development (Banco Nacional de Desenvolvimento Econômico, BNDES)................................................................................................................... 44 Chamber of Commerce for Electric Energy (Câmara de Comercialização de Energia Elétrica, CCEE) ......................................................................................................................................... 45 Centrais Elétricas Brasileiras - Eletrobrás ................................................................................. 45 Electricity Sector Monitoring Committee of the (Comitê de Monitoramento do Setor Elétrico, CMSE) ........................................................................................................................................ 46 National Council for Energy Policy (Conselho Nacional de Política Energética, CNPE) ............ 46 Energy Research Company (Empresa de Pesquisa Energética, EPE) ........................................ 47 Ministry of Mines and Energy (MME) ....................................................................................... 47 National System Operator (Operador Nacional do Sistema, ONS) .......................................... 47 Incentive Program for Alternative Sources of Electric Energy (PROINFA)................................ 48 1 CHAPTER 4: CASE STUDIES IN THE U.S. - OHIO AND KENTUCKY ............................... 52 Ohio Case Study ........................................................................................................................ 52 Kentucky Case Study ................................................................................................................. 59 CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS FOR BRAZIL .......................................... 69 Conclusion ................................................................................................................................. 69 Industry Needs .......................................................................................................................... 72 Barriers and Difficulties to Success .......................................................................................... 73 Recommendations .................................................................................................................... 75 2 ACKNOWLEDGEMENTS The NARUC (National Association of Regulatory Utility Commissioners) is grateful to the many different individuals and agencies that supported this project. Foremost, NARUC is very grateful for the financial support provided by the United States Government through the United States Environmental Protection Agency. In particular, NARUC is grateful to the guidance and support provided throughout the life of the project by Mr. Christopher Godlove from EPA. During the project NARUC collaborated with various Brazilian institutions, including the Brazilian Association of Regulatory Agencies (ABAR), the Brazilian Ministry of Environment (MMA) and a host of companies focused on Landfill to Gas-to-Energy projects in Brazil. In particular we would like thank Mr. Silvano Silvério da Costa, from the Brazilian MMA, for his support during the project and his important leadership in providing direct support for this collaborative report. MMA’s decision to contract two consultants to help write the in-depth Brazil portions of this report were an invaluable in-kind contribution for which NARUC is very grateful. Among the many people from ABAR that helped organize the workshops in Rio de Janeiro and Brasilia, we are articularly grateful for the support and the leadership provided by Mr. José Luiz Lins dos Santos (ABAR President), Mr. Ricardo Pinheiro (former ABAR President), Mr. Sergio Raposo (former ABAR Vice-President) and Mr. Marcos Fernandes Helano Montenegro (ADASA). NARUC representatives, Ms. Anne Goodge (Public Utilities Commission of Ohio) and Mr. John Rogness (Public Service Commission of Kentucky) played vital roles throughout the project, through their voluntary participation in the workshops, sharing experiences from the U.S. and developing short case studies in this report on Ohio and Kentucky. NARUC would also like to thank Mr. Jeff Davis, former member of the Public Service Commission of Missouri, and Mr. Craig Johnson (East Kentucky Power Cooperative) for their support, sharing their perspectives at the workshops organized by NARUC and ABAR. This report could not have been accomplished without the insights and tremendous amount of collaborative work done by the aforementioned individuals. NARUC hopes that government and industry entities in Brazil will find this report useful as Brazil seeks to create a solid enabling environment that will encourage further developments of Landfill Gas-to-Energy projects. In Additionally, NARUC hopes that the lessons learned and shared by Brazil through this project will help other country members of the