Opal Fuels discusses project development pipeline in Q3 call

Renewable natural gas (RNG) developer Opal Fuels held its first earnings call on Nov. 15, reporting that the company had 38 projects in operation, construction or advanced development. Opal went public in July 2022.

During the earnings call, co-CEO Adam Comora called this a remarkable time not only for his company, but for the entire RNG industry. The 38 projects currently in operation, construction or advanced development have the combined capacity to produce more than 19 million MMbtu of production, he said, noting those figures are representative of Opal Fuels’ proportionate ownership share of the projects.

Comora said Opal currently has six operating RNG facilities with a combined 3.69 million MMBtu of capacity. A seventh project is currently under construction. The advanced development pipeline, which includes projects reasonably expected to enter construction over the next 12 to 18 months has grown to 16 projects representing an additional 7.4 million MMgy of biogas resources, he added.

Co-CEO Jonathan Maurer offered some additional details the company’s projects. He said the company commissioned three RNG projects during the first nine months of 2022, including projects in Ohio, Florida and Minnesota. The Noble Road project in Ohio was commissioned in early 2022 and was certified by the U.S. EPA to participate in the Renewable Fuel Standard during the second quarter. The Nobel Road project is expected to be operating at full capacity in 2023. The New River project in Florida began operations ahead of schedule during the second quarter, according to Mauer, and is now operating at full capacity. The New River project was certified under the RFS in October. Finally, the Pine Bend project in Minnesota came online in August after a brief delay and is proceeding through its ramp-up period, Maurer said. EPA certification for that project is expected soon. A seventh RNG project is under construction in the Northeast.

In addition to the RNG projects, Maurer noted that the company has three landfill gas projects under construction, as well as three dairy projects. Those six projects will be brought online between the first quarter of 2023 and mid-2024, he said. Maurer also said that outside its advanced development pipeline, Opal is evaluating the possibility of converting nine renewable power projects that produce a combined 3.2 million MMBtu of biogas to RNG production. Alternatively, those projects could potentially generate e-RINs if the EPA expands the RFS program.  

Comora also discussed Opal’s RNG dispensing network, noting its has grown to 123 fuel stations, including 43 stations owned by Opal that are either operating or under construction.  

According to Comora, the recently signed Inflation Reduction Act is expected to significantly benefit Opal and its operations. He specially cited the bill’s investment tax credits and new 45Z clean fuels production tax credit as IRA provisions that will provide financial benefits to Opal’s projects. He also said the potential expansion of the RFS to include renewable electricity from biogas (e-RINs) would benefit the company.

Opal currently estimates total RNG production for the full year to be in the 2.2 million MMBtu to 2.3 million MMBtu range.

Third quarter revenues reached $66.6 million, up 41 percent when compared to the same period of last year. Net income was $5.4 million, compared to $800,000. Adjusted EBITDA was $25.5 billion, up 130 percent.