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Spire (SR) to Assist KC Water in Constructing RNG Facility
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Spire Inc. (SR - Free Report) announced that it has been selected by KC Water to build a renewable natural gas (RNG) facility.
The RNG facility will be constructed at KC Water’s Blue River Wastewater Treatment Plant. This RNG facility will capture the methane emitted from the wastewater treatment process to generate renewable energy.
The facility will be completed by 2025 and Spire plans to utilize the renewable natural gas in its natural gas supply for customers to heat homes, fuel businesses and potentially fuel vehicles. Since RNG is fully compatible with conventional natural gas and existing pipeline infrastructure, customers do not need to change their natural gas appliances to use the same.
RNG Facility to Benefit Both Companies
Spire is making systematic investments to lower methane emissions from its operation. It has a target to reduce methane emissions by 73% within 2035 from the 2005 level. Spire anticipates producing 0.3 billion cubic feet of natural gas per year from this new RNG facility, which would be enough to supply 4300 homes in the Kansas City region.
This new RNG Project at its wastewater facility will allow KC Water to improve air quality near its wastewater treatment facility. KC Water estimates that capturing methane will reduce greenhouse gas emissions by nearly 20,000 tons of CO2 equivalent per year. In addition, KC Water will also earn nearly $1 million in revenues per year from Spire for providing the raw material for RNG production.
RNG Usage Gaining Popularity in North America
The use of RNG is on the rise in North America despite its high cost of production compared with conventional fuel production.
Per a report from Wood Mackenzie, financial incentives and government support can potentially more than offset the higher cost of RNG production. The report also points out that the US Inflation Reduction Act extends investment tax credits of up to 50% to biogas, which were previously only available for solar, wind and thermal energy projects. This will no doubt help in the creation of more RNG projects in the United States.
RNG can be utilized for power generation, vehicle fuel and in other industries to reduce emissions. Per the Wood Mackenzie report, in 2023, only 0.45 billion cubic feet per day (bcfd) of RNG was produced in the United States, which is still only a small proportion of the total US natural gas market of 120 bcfd.
The potential for the usage of more RNG in the United States is huge as it will assist in achieving the common goal of emission reduction.
Utilities are Adding RNG Facilities
Given the benefits of using RNG, more utilities are focusing on developing RNG facilities. Utilities like DTE Energy Company (DTE - Free Report) , Eversource Energy (ES - Free Report) and CMS Energy (CMS - Free Report) , among others, are working to develop RNG projects.
DTE Energy has been investing in developing RNG projects to cut down emissions and its DTE Vantage is one of the largest renewable natural gas producers in the Midwest. Few more of its projects are in the development stage.
Eversource Energy is working to utilize RNG and is contemplating storing RNG at the Eversource LNG site. The company is also exploring other opportunities to inject RNG within its pipeline and is trying to identify ways to offer RNG solutions to customers.
CMS Energy has a well-chalked-out investment plan to reduce emissions and use more clean sources. The company is investing in its natural gas system to enhance safety and reliability, continue reducing greenhouse gas emissions and explore the use of RNG and other emerging technologies to help its customers and suppliers reduce their emissions.
The Zacks Consensus Estimate for 2024 earnings per share of DTE Energy, Eversource and CMS Energy reflects year-over-year growth of 15.2%, 4.8% and 7.9%, respectively.
Price Movement
In the past three months, SR’s shares have gained 6.7% compared with the industry’s growth of 7.5%.
Image: Bigstock
Spire (SR) to Assist KC Water in Constructing RNG Facility
Spire Inc. (SR - Free Report) announced that it has been selected by KC Water to build a renewable natural gas (RNG) facility.
The RNG facility will be constructed at KC Water’s Blue River Wastewater Treatment Plant. This RNG facility will capture the methane emitted from the wastewater treatment process to generate renewable energy.
The facility will be completed by 2025 and Spire plans to utilize the renewable natural gas in its natural gas supply for customers to heat homes, fuel businesses and potentially fuel vehicles. Since RNG is fully compatible with conventional natural gas and existing pipeline infrastructure, customers do not need to change their natural gas appliances to use the same.
RNG Facility to Benefit Both Companies
Spire is making systematic investments to lower methane emissions from its operation. It has a target to reduce methane emissions by 73% within 2035 from the 2005 level. Spire anticipates producing 0.3 billion cubic feet of natural gas per year from this new RNG facility, which would be enough to supply 4300 homes in the Kansas City region.
This new RNG Project at its wastewater facility will allow KC Water to improve air quality near its wastewater treatment facility. KC Water estimates that capturing methane will reduce greenhouse gas emissions by nearly 20,000 tons of CO2 equivalent per year. In addition, KC Water will also earn nearly $1 million in revenues per year from Spire for providing the raw material for RNG production.
RNG Usage Gaining Popularity in North America
The use of RNG is on the rise in North America despite its high cost of production compared with conventional fuel production.
Per a report from Wood Mackenzie, financial incentives and government support can potentially more than offset the higher cost of RNG production. The report also points out that the US Inflation Reduction Act extends investment tax credits of up to 50% to biogas, which were previously only available for solar, wind and thermal energy projects. This will no doubt help in the creation of more RNG projects in the United States.
RNG can be utilized for power generation, vehicle fuel and in other industries to reduce emissions. Per the Wood Mackenzie report, in 2023, only 0.45 billion cubic feet per day (bcfd) of RNG was produced in the United States, which is still only a small proportion of the total US natural gas market of 120 bcfd.
The potential for the usage of more RNG in the United States is huge as it will assist in achieving the common goal of emission reduction.
Utilities are Adding RNG Facilities
Given the benefits of using RNG, more utilities are focusing on developing RNG facilities. Utilities like DTE Energy Company (DTE - Free Report) , Eversource Energy (ES - Free Report) and CMS Energy (CMS - Free Report) , among others, are working to develop RNG projects.
DTE Energy has been investing in developing RNG projects to cut down emissions and its DTE Vantage is one of the largest renewable natural gas producers in the Midwest. Few more of its projects are in the development stage.
Eversource Energy is working to utilize RNG and is contemplating storing RNG at the Eversource LNG site. The company is also exploring other opportunities to inject RNG within its pipeline and is trying to identify ways to offer RNG solutions to customers.
CMS Energy has a well-chalked-out investment plan to reduce emissions and use more clean sources. The company is investing in its natural gas system to enhance safety and reliability, continue reducing greenhouse gas emissions and explore the use of RNG and other emerging technologies to help its customers and suppliers reduce their emissions.
The Zacks Consensus Estimate for 2024 earnings per share of DTE Energy, Eversource and CMS Energy reflects year-over-year growth of 15.2%, 4.8% and 7.9%, respectively.
Price Movement
In the past three months, SR’s shares have gained 6.7% compared with the industry’s growth of 7.5%.
Image Source: Zacks Investment Research
Zacks Rank
Spire currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.