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Clean Energy Fuels (CLNE) Starts RNG Production at New Project
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Clean Energy Fuels (CLNE - Free Report) announced that it has completed a new renewable natural gas (RNG) production facility at Drumgoon Dairy in Lake Norden, S.D.
The three companies have teamed up to create multiple RNG projects at Midwest dairies, including the Drumgoon Dairy RNG project, which was built with Dynamic Renewables and financed through Clean Energy's joint venture with bp. The recent project, along with several others that are right behind, will contribute in reducing harmful greenhouse gas emissions.
The 6,500-cow dairy farm is projected to provide 1.66 million gallons of negative carbon-intensity RNG annually to the transportation market when operating at full capacity.
In December 2023, the $38 million RNG digester project's construction was completed, and a few weeks later, natural gas was injected into the RNG's interstate pipeline system. The RNG generated at Drumgoon will be kept in a virtual storage facility until all federal, state and local environmental credit paths are authorized and the RNG is given a carbon-intensity score, which is anticipated to happen in the first half of 2024.
Benefits of RNG Usage
According to the U.S. Environmental Protection Agency, the transportation sector contributes another 28% of the country's greenhouse gas emissions, with agriculture making up about 10% of the total. Methane capture from agricultural waste reduces these emissions.
When compared to diesel, RNG — which is created from the collected methane and utilized as a transportation fuel — significantly reduces greenhouse gas emissions throughout its lifespan. Because of this, RNG is able to achieve a lower carbon intensity score than other fuels because of both source and vehicle emission reductions.
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 U.S. 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.
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. 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. This is an added advantage.
Utilities Focus on RNG Usage
Along with Clean Energy Fuels, other utility companies like Spire Inc. (SR - Free Report) , DTE Energy Company (DTE - Free Report) and Eversource Energy (ES - Free Report) are also working on RNG projects.
On Jan 10, 2024, Spire announced that it has been selected by KC Water to build an RNG facility. Spire anticipates producing 0.3 billion cubic feet of natural gas per year from this new RNG facility, which would be enough to supply 4,300 homes in the Kansas City region. The facility will be completed by 2025.
SR’s long-term (three to five-year) earnings growth rate is 5.6%. The Zacks Consensus Estimate for fiscal 2024 EPS indicates a year-over-year increase of 7.9%.
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.
DTE’s long-term earnings growth rate is 6%. The Zacks Consensus Estimate for 2024 EPS indicates a year-over-year increase of 15.2%.
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.
ES’ long-term earnings growth rate is 5%. The Zacks Consensus Estimate for 2024 EPS indicates a year-over-year increase of 4.5%.
Price Performance
In the past month, shares of CLNE have gained 7% compared with the industry’s 3.4% growth.
Image Source: Zacks Investment Research
Zacks Rank
Clean Energy Fuels currently carries a Zacks Rank #4 (Sell).
Image: Bigstock
Clean Energy Fuels (CLNE) Starts RNG Production at New Project
Clean Energy Fuels (CLNE - Free Report) announced that it has completed a new renewable natural gas (RNG) production facility at Drumgoon Dairy in Lake Norden, S.D.
The three companies have teamed up to create multiple RNG projects at Midwest dairies, including the Drumgoon Dairy RNG project, which was built with Dynamic Renewables and financed through Clean Energy's joint venture with bp. The recent project, along with several others that are right behind, will contribute in reducing harmful greenhouse gas emissions.
The 6,500-cow dairy farm is projected to provide 1.66 million gallons of negative carbon-intensity RNG annually to the transportation market when operating at full capacity.
In December 2023, the $38 million RNG digester project's construction was completed, and a few weeks later, natural gas was injected into the RNG's interstate pipeline system. The RNG generated at Drumgoon will be kept in a virtual storage facility until all federal, state and local environmental credit paths are authorized and the RNG is given a carbon-intensity score, which is anticipated to happen in the first half of 2024.
Benefits of RNG Usage
According to the U.S. Environmental Protection Agency, the transportation sector contributes another 28% of the country's greenhouse gas emissions, with agriculture making up about 10% of the total. Methane capture from agricultural waste reduces these emissions.
When compared to diesel, RNG — which is created from the collected methane and utilized as a transportation fuel — significantly reduces greenhouse gas emissions throughout its lifespan. Because of this, RNG is able to achieve a lower carbon intensity score than other fuels because of both source and vehicle emission reductions.
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 U.S. 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.
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. 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. This is an added advantage.
Utilities Focus on RNG Usage
Along with Clean Energy Fuels, other utility companies like Spire Inc. (SR - Free Report) , DTE Energy Company (DTE - Free Report) and Eversource Energy (ES - Free Report) are also working on RNG projects.
On Jan 10, 2024, Spire announced that it has been selected by KC Water to build an RNG facility. Spire anticipates producing 0.3 billion cubic feet of natural gas per year from this new RNG facility, which would be enough to supply 4,300 homes in the Kansas City region. The facility will be completed by 2025.
SR’s long-term (three to five-year) earnings growth rate is 5.6%. The Zacks Consensus Estimate for fiscal 2024 EPS indicates a year-over-year increase of 7.9%.
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.
DTE’s long-term earnings growth rate is 6%. The Zacks Consensus Estimate for 2024 EPS indicates a year-over-year increase of 15.2%.
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.
ES’ long-term earnings growth rate is 5%. The Zacks Consensus Estimate for 2024 EPS indicates a year-over-year increase of 4.5%.
Price Performance
In the past month, shares of CLNE have gained 7% compared with the industry’s 3.4% growth.
Image Source: Zacks Investment Research
Zacks Rank
Clean Energy Fuels currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.