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Methane Generation
We were instructed by Hyder Industrial Limited to act on their behalf in their first methane to electricity generation development scheme. Subsequently we acted on a number of such schemes, the largest of which involved a portfolio of 19 landfill sites owned by SITA. An umbrella agreement was put in place with SITA for a reduced number of their sites but the gas curve proved optimistic and our client subsequently extracted itself from most of the remaining SITA sites.

Hyder Industrial was taken over by United Utilities and became United Utilities Green Energy Limited. We continued to act for the company on a number of methane schemes and developed a standard form of option agreement and lease for use where the landfill site owner could be prevailed upon to use UUGEL’s standard documentation. These standard documents were refined over a number of months in discussion with UUGEL’s in house legal counsel.

The main commercial issues for methane generation projects on operational landfill sites are (1) practicalities of installing and operating equipment to capture methane in areas of the site where landfill operations have been completed next to areas where those operations are ongoing and (2) ensuring that the operator is committed to filling vacant areas with a given level of putrescible waste.

The commercial issues in respect of completed sites are generally easier to deal with but in these cases it is often equally difficult to prove the gas curve, as measurements have to be taken over a reasonable period which generally involves having to place reliance on the site owner figures with the associated debate over warranties of that information.

In all cases, environmental considerations are paramount. The control of leachate is the most important of these. There is no justification in the developer taking environmental risk associated with leachate as this is an aspect of the land fill process, but often the site owner expects the developer to do so.
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Mike Jones, Partner
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