Great! Welcome to this Infrastructure Investor webinar on renewable natural gas. This is one of many sessions that are part of the Infrastructure Connect series, which deep dives into an assets profile and delivers insight on timely subjects within the industry. The Connect program is one of the many benefits of being an Infrastructure Investor member, but for this session, we've opened it up to all people, non-members, to join, learn, and connect. However, if you would like to have more information on becoming a member, after this session, then please do get in touch. I'm Emily DeMasi, Head of Infrastructure Investor Network at PEI Group. This webinar has been made in association with the next upcoming members-only meeting, which is the Infrastructure Investor New York Conference, taking place December 6th and 7th, where sustainability, energy security, and the energy transition are key pillars of the event. Other themes at that conference include legislative and regulatory views, data center performance opportunities, expanding beyond mega funds, and updates from the Infrastructure Investment and Jobs Act, digital infrastructure, and investor-manager relationships. If you do want to find out more about attending this conference, let me know at the end, and I can send through some more information. Before I introduce our superb guest speakers, we have three housekeeping points for today. First of all, this is an interactive webinar. It's your opportunity to ask our speakers any and all questions around renewable natural gas. Please do fire your questions using the Q&A button at the bottom of your screen, and we'll work through them towards the end of the webinar. The session is being recorded so that any members unable to attend live can view it on the membership platform. Finally, we have a few polls throughout the session, please do answer them quickly. Your answers are anonymous, your honest answers will help shape not only the discussion but the Connect program moving forward. Now, to introduce you to today's webinar speakers, we've got Doran Hole, CFO at Ameresco, and Michael Bakas, EVP of Distributed Energy Systems at Ameresco. I'll let the speakers do a brief introduction of themselves and Ameresco's role within the RNG market, then we'll get going with some of our questions. Great. Thank you, Emily DeMasi, and I'll start. Doran Hole, Chief Financial Officer at Ameresco. I joined the company in the middle of 2018, just as we were really ramping up a lot of the hardcore development of some of the renewable natural gas assets we now have under construction. It's a very, very exciting sector and very happy to be here with you. Yeah. Emily DeMasi, thanks again for having us. My name is Michael Bakas. I'm actually was part of the founding management team of the company, so I've been here for over 22 years and have been developing biogas projects from our inception. I've been in the space for 22 years, implementing these projects, where we went live with our first project for RNG in 2010. I've been operating RNG assets now for 12 years, and my main focus is the asset side of our business. Perfect. Yeah, we've got some very good knowledge on this webinar today. Let's start first of all, with the practical uses of, and for renewable natural gas. Where and where and how you can kind of see it being used in the market currently? Look, when we first started developing RNG projects in particular, there really wasn't much by the way of a transportation sector mandate. In our first project that, as I mentioned, we took commercial in 2010, we were actually transporting the gas from San Antonio, Texas, to Southern Cal, where it was being used as a green fuel source for a cogen plant to make green electricity and green thermal. Flash forward ahead the last number of years, the gas has been primarily used in the transportation sector as vehicle fuel. Matter of fact, in the last five years alone, we've seen the space grow by almost 230%-240%, where in 2021, 64% of all on-road fuel used in natural gas vehicles was actually RNG. It's really come a long way in terms of making a dent in the transportation sector. What I would suggest is that with the global focus on the negative impacts of climate change, what we're starting to witness is a tremendous interest in consumers seeking out renewable fuel sources for their everyday activities. This is from, you know, using your stove or heating your home or business. I think what we'll see over time is that the addressable market will really expand into that non-transportation sector. Great. Perfect. Within that, kind of, what does the current RNG pipeline look like, and what is the, sort of, the current U.S. regulatory support in place? I could talk a little bit about the pipeline, and Doran Hole can pick up on a lot of the governmental support that's been recent. Look, when we did our first project, it was, I think, less than 30 projects. As a matter of fact, there was only maybe less than four or five developers in this space. Now, in operation, there's almost 270 plants in operation. There's almost 100 developers in the States developing biogas projects. I think there's, like, another 100+ that are in construction, and there's another 140 that are in the planning stages. We've seen our capacity, back in 2021, the capacity was about 74 trillion BTUs. And projections are that by 2040, we could see that morph into over 4,500 trillion BTUs. The pipeline is very robust. It's being supported by a climate change or a drive to decarbonize. As Doran Hole will elaborate on a lot of governmental support. I think on the government side, there's two different types of programs that, first and foremost, the EPA has a program for what is the equivalent of a Renewable Energy Certificate, but for green gas, which they refer to as RIN. You know, the government sets a volume obligation for the transportation sector that they're required to blend cellulosic biofuels, like renewable natural gas, into the natural gas fueling that's used for transportation. That RIN has a value to it, and that actually drives a good amount of the revenue stack when you're thinking about owning a project that produces renewable natural gas. Secondly, on the federal side, in, you know, the most recent bill, the Inflation Reduction Act, that bill has Investment Tax Credit for this type of biogas. You know, while we're, you know, pushing and waiting for treasury guidance to, you know, add some definition around the way that that legislation is going to be implemented, we're quite excited about the investment by the federal government in expanding this particular sector. Look, going beyond the federal government, state and local governments, and Mike can probably comment on some of the other ones. The biggest, California, with its Low Carbon Fuel Standard, which has a kind of almost a local REC value to the MMBtu of renewable natural gas that are injected into the pipeline system there. What's more, there are several other states that are considering their own programs and starting to implement those. I don't know, Mike, if you want to touch on a couple of the new ones. I think there's about 34 states, Doran, right now, that are either doing something or getting ready to promote. I mean, you mentioned California. California actually enacted the first of its kind in the country, and that was essentially a thermal RPS, that requires utilities to procure a certain amount of green gas by some date certain. It is definitely the movement. If you look at all the plans, like the CARB recent plan and others, in terms of getting to net zero, RNG is very prominent in throughout 2050. The other thing that I failed to mention, that Doran hit upon on the RIN side, at the federal level, where our expectation is, we're guardedly optimistic, that on November 30th, the EPA will announce an eRIN program. As you're familiar with in the States here, we have a huge push to electrify. The government is looking at using RNG as a fuel source to create green electricity, to tie it into electric vehicles and to incentivize that. If that happens as we expect, that will just further expand the opportunity for RNG use. Great. Why, has renewable natural gas been a kind of middle market favorite recently? You guys could touch on that from the inside point of view. Sure, Emily. I mean, I can tell you just observing the capital markets, I think that, you know, the type of investors going into clean tech, you know, they're constantly looking for new technologies and new areas to invest across the clean tech universe. I think that there's always been a little bit of comfort associated with the idea that assets of long-term recurring revenue streams carry strength. That's certainly been helpful for Ameresco over the years because we are an asset owner, not just renewable natural gas, but other types of renewable energy generation assets as well. I think if I think back to kind of when the real uptick in SPAC activity happened, you know, that's kind of a natural public equity market entry point for some of these companies on the renewable natural gas side that maybe weren't really ready to be public companies themselves. They could use that SPAC vehicle as a way to kind of really nudge them along and set them up with people, you know, who organize the SPACs, who really understand, you know, what it means and what it takes to be a publicly traded company. I think that's what drove some of the interest in the, in this space. You know, sort of just general ESG themes, looking for other alternatives to the kind of technology companies on the solar module or inverter side or, you know, electric vehicle, et cetera, and moving into some of the more project-based companies, but still kind of coming out in that mid-cap market sector. I think that's kind of what was driving it. It's, you know, it has been interesting and will continue to be interesting, to see, you know, what transpires. Obviously, you know, with the recent BP acquisition, that's kind of taking one of those parties out of the, you know, out of the public market sphere. From our perspective, I think that we were, you know, we were pleased to see the activity because, number one, it sort of supports valuations of the assets, and many of which we have under development. Secondly, just the level of interest and activity in Renewable Natural Gas overall. You know, you're getting a lot more eyes on it. It's, you know, that contagion has gone into the lender community, most certainly, where we're seeing a lot more interest from lenders in participating in these projects as we bring things to fruition. It's overall good for the market because it's gonna help us continue to develop, continue to drive down costs, and be able to set, you know, set the stage for delivering this renewable natural gas to the non-transportation market going forward. You know, more capital means means more efficiency. Perfect. I guess kind of expanding on that point as well, what scale do you think renewable natural gas can realistically get to, as a way of contributing towards the energy transition? Look, you have. When I think about the net zero puzzle, I don't think it's the panacea, but I think it's an important piece of the puzzle. You've got different bodies of government that have speculated what the growth could be. You've got International Energy Agency suggests it could represent as much as 20% of all the gas in the pipeline by 2050. You've got another study out there from IPCC that suggests 28% by 2040. I think the truth lies somewhere in between. If you look at a lot of the stats, the expectation is that when you build this out, it could represent maybe the entire residential sector in the U.S., which is a tremendous impact to climate change for the positive. I think it has the ability to play a key role along with other technologies, whether it be hydrogen or solar or wind or anything else. Great. Doran, have you got anything to add to that? Nothing to add there. That's was great. No worries. On a like, on a very kind of similar note as well, we sort of touched on it, but the role of RNG in terms of kind of both energy security and resilience, Yeah, how are you guys kind of seeing that from firsthand experience? I like the, I like the concept because, you know, it's interesting, and I'll talk about security in a minute. When you think about resiliency, this conflicts, right? Resiliency is really the ability to withstand a multi-day outage. Typically, to do that, I think, intermittent resources will struggle to be able to provide that kind of resiliency, whether it's solar, wind, even when it's coupled with storage. RNG is a baseload, dispatchable resource that can add sustainability to resiliency, and I think that's really cool. On the, on the security side, look, for any country, especially the States, energy security is about having local resources, preferably renewable, available to meet the energy consumption needs of its people. Renewable natural gas plays a critical role in providing energy security for the circular economy. I mean, think about it. Society creates waste creates harmful biogas. We then take advanced technology and transform that biogas into a clean fuel that can then be a beneficial resource back to that society that created the waste in the first place. I think from an energy security standpoint, it can play a tremendous role. As a matter of fact, if you go back to how the RFS program was somewhat created out of the Clean Air Act, it was George Bush, I think, who looked at it and said: "Look, we need to create a domestic supply and stop relying on overseas for our energy resources." That's kind of what started the whole process on the RFS program. Yeah, I would just add on the on the resiliency side. You know, battery technology is improving, but currently, you know, with the intermittent resources of wind and solar on the grid and continuing to proliferate, the the battery storage kind of capping out, call it at 4-hour batteries, is not quite enough to really provide the resiliency that many customers need, and that's where gas-fired backup generators come into play. With the technology for renewable natural gas already here, and the ability to supply those backup generation systems with renewable natural gas, you've got, as Mike described, kind of renewable resiliency in hand at the moment. I think that's gonna take... You know, we are watching battery technologies advance. We're a big installer and designer of battery systems, so we watch and we pilot, you know, new technologies and new chemistries, pretty consistently. We see a pretty long road toward the really long-duration batteries that could ultimately, potentially substitute for gas-fired backup generation. For quite some time here, we're gonna need natural gas-fed resiliency, and I think that that's where renewable natural gas comes in as a clean fuel to power those systems. I think it's pretty critical. Just, looking at what, you know, what Mike said about, you know, the local production of the gas from a security perspective, with the ability to create renewable natural gas from landfills, from wastewater treatment plants, from agricultural resources, all three of which really fit well into the circular economy that Mike was mentioning. You know, the resources there and the developments underway, it's going to be an important part of energy security in terms of being able to produce all of this domestically. I think another thing to think about too, Doran, is the space constraint. I just think of like the major cities, whether it's, you know, Boston, New York, wherever have you, to be able to create local resources and provide resiliency, I mean, where are you gonna put all the solar you need? What is it? Is it a megawatt for every five acres? I mean, where are you gonna put it to be able to provide renewable security, even if it was not intermittent? The beauty of RNG is it reuses existing infrastructure. You don't have to do anything. It's not just great from resiliency, but even, you know, to take it 1 step further, if you think a lot of folks that have the end-use devices. How about the retiree that has a gas stove? If we electrify everything and get rid of, you know, gas, those folks have to figure out how they're gonna go pay for it and get the replacement or their gas heating system. RNG, and I think down the road, green hydrogen, is gonna be a way to reuse existing infrastructure, not throw it away, and allow those folks to continue having the end-use devices they are. That's why when you look at a lot of the analysis done on a dollar per ton reduced basis, RNG is extremely competitive. That's where I think society will end up. You think about corporations, if they're viewing carbon as a risk on their balance sheet, and they wanna get from whatever tonnage of carbon they have to zero, they're gonna evaluate technologies on a dollar per ton CO₂ reduced basis, and they'll pick the most cost-effective and efficient way to achieve that net zero. RNG, I think studies have shown RNG is maybe $250-$300 a ton of CO₂ reduced, whereas electrification can be $500-$700 per ton. I think that's another thing that will be factored in over time. Oh, great points. Linking also to the next question, if we're looking to other industries, such as the agricultural sector, how can renewable natural gas kind of aid the decarbonization of other sectors and big producers of emissions? What's the general expandable market for renewable natural gas, kind of within all different industries that contribute to climate change? Well, I'll hit upon the ag side only 'cause you're picking on the ag side right now. You're absolutely right. I mean, right now, I think, again, the IEA estimates that about 25% of all global emissions was actually the ag industry. The beauty about RNG is it essentially incentivizes these dairy farmers to capture those emissions, those methane emissions, and essentially sell the methane as a revenue source to replace natural gas. If you incentivize folks like them to do that, you're gonna now start capturing a lot of those emissions, and you should see those emissions come down. I think that's gonna be the case in any of the industries. Great. Doran, did you have anything to add to that question? No, I was gonna just simply say that, you know, the agricultural operations do tend to be much more distributed versus some of the other feedstocks that are used for renewable natural gas. I think that we, as a company and as an industry, are hoping to continue to see technological advances, and frankly, just production system advances, transportation advances, to allow for more of the agricultural operations to participate in renewable natural gas. That's gonna require, you know, some advances in terms of efficient digestion systems, transportation of gas or methane to cleaning systems, you know, sort of hub-and-spoke operations that are going to kinda really bring that to bear with the agricultural systems more broadly. I mean, it's easy to say there's economic rationale to put together a renewable natural gas plant somewhere where you've got, you know, some extremely large, concentrated agricultural operations. As we all know from driving around the country, a lot of these agricultural operations are spread out all over the place, and we need the technology to kind of advance to allow that to kind of really participate. It's quite promising. Dorn, you bring up a fantastic point. You know, when I think of the solar industry, when we first started doing solar, it didn't have much visibility, and cost per watt was very high. As the market evolved, and there was a lot more visibility of projects happening and the governments incentivizing people to put solar in, we saw a lot more investment in the technology space that ultimately allowed for efficiencies to improve and costs to come down. I think what we're seeing, and when we were developing biogas projects 20+ years ago, it was a very small industry. No one even really knew what we did. I would say, you know, over the last three, four, five, years, because of the huge uptick in interest level and the visibility, we're seeing so many more improvements in technology. We will see over time enhancements on efficiency and costs coming down that will allow us to capture some of these, smaller outlying farms or landfills or wastewater treatment plants. I mean, even wastewater treatment plants, there's so many municipals that own very small wastewater treatment plants that by themselves might not be economic today but will likely be in the future. Yeah, it's a great point, and, this kind of goes back to the point about, you know, the mid-cap markets. You know, when you look at the technological advancements and the, and the companies that are developing the technologies, that are producing the equipment that we use to process the gas, we are starting to see interest from, you know, straight up the private equity chain into some of these, some of these technologies. Not too unlike solar modules or inverters or other technologies in the renewable space that kind of have hit the clean tech mid-cap market, you know, public markets. It will be interesting to see if we can attract that capital to the renewable natural gas technology space, apart from the kind of development and asset operation space. Well, fantastic. I just want to remind the audience to get your questions in as we'll be moving to audience questions. Mm-hmm. in a few minutes. First, Dora and Mike, for companies looking to invest in RNG and expand their cleantech portfolio into this space, and sort of, you know, adding these funds to their portfolio, what sorts of challenges and risks should they expect to see, especially when starting out? What are some of the sort of solutions to combat these, that you guys have experienced and sort of found solutions for yourselves? Yeah, sure. I think the, you know, the investment opportunities are pretty ripe, as you might expect. You know, development is picking up. You've got multiple categories of places to invest, and it all depends on appetite for risk, right? In the first instance, there's the development side, right? That tends to be smaller, private investors looking to, you know, help people develop projects in areas where they think that ultimately you can get a project permitted, and you can get a project built and operating. Ameresco does quite a bit of development on its own. You know, we develop things from scratch. However, we see a lot of peer companies out there, which are, you know, purely in the development space, then try to find, you know, someone like Ameresco to come and buy their projects at the time when they're ready to be built. You know, the risks that you face on the development side really come down to, you know, viability of sites, the ability to find feedstock, the ability to get projects permitted. You know, those are kind of the big ones. The offtake, as Mike and I described, you know, between the transportation market and the voluntary market, you're going to see plenty of demand for the gas once it's there. However, it's a matter of, you know, connecting the dots, like where is your plant located versus where is the demand, right? How do you get the gas from point A to point B? Well, oftentimes that requires some physical interconnection to the natural gas pipeline system, which, you know, the alternative is to truck the gas and that, you know, that's another consideration. You know, there's definitely some risk to be thought about when investing in the development process. When you move past that and into the asset ownership side of things, you know, there's The opportunities there are about, as you've seen, many of the large companies are getting into the space. You know, certainly Ameresco is big into the space. We continue to invest in our development pipeline and construction pipeline. The risks really kind of narrow down to the stability of the feedstock once the projects are operating. One of the reasons why we like landfill gas is because of the stability of the feedstock. That's something that, you know, when you measure the amount of gas generated by a landfill, for a company like Ameresco, who's been working on landfills to create electricity, as Mike said, for, you know, the last 20 years, we've got a really good view of what the gas supply is going to look like from a landfill, and I think that we like that stability. That's one, you know, that's one element that folks can think about when they, when they go to look at investing in the operating side of things. You know, I mean, you know, up and down the spectrum, we're seeing, money come in. As I mentioned, you know, BP and NextEra has made a move into that as a, as a large IPP. You have a lot of, private credit funds that are, that are getting really interested in this space as well. You know, the investment vehicles, are, you know, the availability is becoming wider for people to kind of put money to work, even away from the public equity markets. I would add to that a little bit. When you think about what I said earlier, when we did our first RNG project 12 years ago, there was only about four or five of us doing this type of work. Today you've got nearly 100, and that's really the growth of that number has been only in the last couple of years. I would suggest that these projects are, you know, they're complex, and they can be challenging. As an investor, I think you want to make sure that the group you're investing in has the experience and historical performance to actually execute on these projects. The other thing I would suggest as an investor is that, you know where the market is today, where is it heading? As we've discussed, we believe it's going to be going to the non-transportation sector. The non-transportation sector is over 440 times the size of the transportation sector. While the non-transportation sector has done a great job on the electric side of the carbon footprint equation through solar and wind and efficiency, they are now trying to look at how do they deal with the thermal side, which typically represents more than 50% of their carbon footprint. That's where, you know, I'll put a plug in for Ameresco, where I think we're in a great position, in that we are not a pure play RNG company. We actually have a tremendous presence in the non-transportation sector, looking at the entire carbon footprint for our clients to help them reduce their carbon risk. It's an easy add for us to include RNG as part of that solution. I think there's a lot of value in that. Great. I'm gonna ask a couple of these audience questions now, as there's a few that have come in. From an investor's perspective, so not an operator, how important do you think vertical integration is across RNG? How important vertical integration is in. Yeah, across renewable natural gas. I think you got to be careful. I think we've always We started the company, and I hope I'm answering the question correctly, or I've interpreted the question correctly. When we started the company, one of the things our CEO was adamant about, our founder, was he wanted to remain an agnostic, technology agnostic company. We've purposefully have held back from necessarily being a manufacturer of technology, or locking ourselves into one particular vendor or technology. The reason is that it's evolving exponentially, and what is the state-of-the-art today is not necessarily state-of-the-art tomorrow. The way we've looked at it, at least, is we're very vertically integrated in terms of the people resources to take a project from greenfield to operations. That involves development, permitting, compliance, construction, engineering, commissioning, et cetera, but using best available technology that's in the market at that time. I think I would caution that you don't necessarily want to be completely vertically integrated. I think even, you're seeing some of the larger energy companies, get into the space. I think there's a benefit of not having everything under one roof. So- The consumer, I should say. Yeah. I'll tell you, Mike, I agree with the, with kind of where the bookends are for vertical integration, the way that Ameresco looks at it, right? We get to the point where we become a producer of the gas, and then we inject it into the pipeline system, and we sell it. We're not going downstream any further than that. We're not trying to put, you know, fueling stations all over the country and own those. That is a very different business model than the development and construction and operation of a plant that converts methane out of a landfill or a wastewater treatment plant into methane that is, you know, chemically equivalent to natural gas. Similarly, when you go upstream further into the feedstock space, you know, we have no aspirations to become a landfill owner. We have no aspirations to become dairy farmers. You know, we don't want to go to that point where we're owning the feedstock either, so there's limits to the vertical integration. I think vertical integration, incorporating development with construction, with operation, and operation and maintenance of plants, there are tremendous amounts of synergies across that. Because the expertise on every element of the development process through to the construction, through to the operations, there's a substantial amount of interconnectedness in the skill sets of the people, et cetera. If you look at the way Mike's team is set up, you know, we've got, you're borrowing from skill sets all the way through that vertical integration. The minute you flip into something that's got a completely different set of unit economics, I mean, manufacturing the equipment, that's R&D, that's manufacturing processes, that's raw material procurement. That, you know, there's a variety of things that are vastly different than what Ameresco does in the development, construction, ownership, and operation, right? I think that that's where the natural boundaries of vertical integration lie. Great. Permitting was has just come up as a question in terms of how does permitting risk compare to other renewable technologies such as wind, solar, et cetera? On average, is it easier or harder to get permitted? Mike, that one's yours. Yeah, gee, thanks, Tony. What I would suggest is that, you know, well, look, we develop solar and wind products, and they have their own bucket of challenges on the permitting side. A lot of it has having to do with the, you know, NIMBYism. What I would suggest on the renewable natural gas side, especially when you're involving, you know, landfill permits and such, and wastewater treatment plant permits, there's a tremendous amount of challenges. It's definitely far more complex and challenging than some of the intermittent resources I mentioned. I was just tallying one particular project that we're developing now. We're actually building in California, and I think the total permits required were so close to 30 permits. Each individual permits, each with their own challenges. In some cases, some of these permits can take over a year to secure. That's why, if you go back to my original statement, you know, as for an investor, make sure you're investing in companies that have a proven track record and have done it successfully. It's, there are challenges, but we've never run into a project that, where a permit has prevented us on the biogas side from being able to move forward into construction and operations. Perfect. Another question here: How do you see green hydrogen and RNG working together? Do you see RNG as a feedstock to make it? Do you see RNG and green hydrogen in repurposed natural gas pipelines? Yeah, absolutely. Yes, yes, and yes. I mean, look, at the end of the day, 95% of all the hydrogen produced currently is in the States, is from SMR technology. It's not electrolysis. I'm not suggesting electrolysis won't play a critical role, but it is also cracking the water molecule. I would suggest in some states in the country, we have water supply challenges. It's an easy step to take RNG, use existing pipeline infrastructure and with SMR technology, produce hydrogen. As a matter of fact, we were recently awarded a pilot project where we're looking to do exactly that, where we have an RNG plant in Phoenix, and we're developing one in Los Angeles, and we're gonna connect those plants through the I-10 corridor and try to use that RNG and SMR technology to produce hydrogen for our fueling stations along that I-10 corridor, which is a great space for the long-haul trucking. I do think it's gonna play a role, and again, the only challenge I think right now is that hydrogen is still a little bit uneconomic. I know the government is trying to subsidize it. I do... I personally am a believer it's coming, and I think it's coming faster than people realize, but I think we're still a couple, few years out from seeing a tremendous impact on it. Mike, can you take two seconds and just define SMR for folks? Yeah. I mean, it's Steam Methane Reforming. It's essentially using steam to crack the methane molecule and separate hydrogen and repurpose it for use in as a fuel source. Unlike electrolysis, which is using essentially electricity to crack the water molecule. Right. I think that's one of the critical pieces there, is that it's not as heavily reliant on electricity, and it's certainly not reliant on water the way electrolysis is. I mean, we, of course, are following electrolysis and the technology and the costs associated with it because it ultimately is gonna become important for clean tech overall. As a clean tech integrator, we need to make sure we know exactly what's going on. For our own RNG production, this gives another example of how great it is to be an asset owner when you've got optionality for what to do with your output, right? I mean, we're selling renewable natural gas into the transportation sector. We see potential growth in the RNG voluntary buying sector. Certainly, you know, as costs come down and the price comes down, that's gonna impact the amount of uptick in that sector for RNG. Now, having yet another way to use the RNG to create hydrogen, which is gonna be another, you know, alternative fuel that everyone expects to really take off, is, you know, as a developer, owner, operator of RNG plants, now we've got a lot of choices in the way we the way we sell our output. Not too dissimilar to when we were doing landfill gas to electricity, and we've got at least one plant that was converted off of landfill gas that was being used for direct use into production of RNG, right? You've got optionality on these plants when you own them, and I think hydrogen is presenting a really interesting case. By the way, on the voluntary uptick, you know, when you looked at the way that solar and wind took off, especially the solar side, you know, the economic value proposition for solar was always to, you know, purchase solar for less than what you're paying for electricity off of the grid, right? With renewable natural gas, it's a little bit different because, you know, the value of renewable natural gas is actually, you know, or the price of renewable natural gas is actually higher than just regular brown natural gas, right? I think that you're gonna see the uptick in demand come from those participants in the market who are really looking at that carbon reduction equation that Mike referred to, as opposed to straight-up economic savings. I don't know, Mike, if you have anything to add with that. Oh, no, I think you're right on track. As we move to a carbon-free society, fossil fuel will no longer be an option. It's gonna be hard to be comparing costs of RNG to fossil fuel because the goal is to get rid of it, right? Not use it. That's why I keep saying people will be looking at really the cost on a CO₂ ton re-reduce basis, and that's where RNG plays is very competitive. You also brought up a good point, Doran, about the power generation size. As Doran mentioned, we own and operate a number of biogas to power generators across the country. If there are opportunities for electrolysis, we'll obviously, you know, look at using those resources as well to create a hydrogen. I think the goal is to have a portfolio mix of technologies and investments that give you flexibility to grow as the market evolves. Perfect. There's a question about regulation that's just come through. Do you see regulation, RIN and LCFS, et cetera, changing in the medium term, say, five years? If yes, where do you think it will move to? Well, I don't see it changing. This is just my opinion. I don't see it changing materially in the next 5 years. I mean, as I mentioned, November 30th, the EPA is supposed to issue the Set Rule, which will set the RVO goals for the next three years. You know, essentially, the volume requirements by the obligated parties. I think that will continue. I think what we will see, which will be interesting, is if we start to see some of this RNG leave the transportation sector. We're seeing some of the RNG in the States go to Canada. We're seeing some of it go over to Europe for the RED program. You know, with that, there's only so much supply. I think as demand continues to grow and if supply is pulled off the transportation sector, you might see, you know, you might see a spike in prices for that matter. You know, I think the trajectory of this fuel source as a, as part of the, the net zero puzzle, is only gonna continue to grow. We might see some change in where the volume goes, but I don't think we'll see the change in demand. I think it'll just continue to grow. Perfect. Yeah, there's a question here about the growth curve of RNG as a whole. Do you see the growth of voluntary corporate use of RNG is the same growth curve as the voluntary corporate use? Is it going to mirror prior growth curves within renewable energy, such as wind and solar? Or do you see it being quite different? Well, I would suggest that it's going to definitely grow because it's available today and addresses the thermal side of the equation for carbon neutrality. I would suggest that it might, the demand might grow faster, and the reason is limited amount of supply. When you think about other in, you know, technologies like solar and wind, supply limitation is really, you know, manufacturing and space constraints. With RNG, it's feedstock. There's only so many landfills, there's only so many wastewater treatment plants, there's only so many farms. And that's why I think we might see a stronger demand for this getting and the fact that it's a baseload, dispatchable, renewable supply of energy, unlike the intermittent resources. It's kind of ironic that climate change is exacerbating the severity of the storms, which is creating an uptick in desire for resiliency, and this resource can help supply sustainable resiliency. Perfect. A couple of questions on voluntary RNG certificates. The last one is on: could you touch on voluntary RNG certificates for corporations interested in decarbonizing non-transportation sectors? I mean, this is evolving as we're speaking today in terms of how these certificates are gonna look and how they're viewed. Traditionally, if you go back a number of years ago, clients were looking at just buying offsets, and they were cheap. They felt like they were doing the right thing. We've seen a shift now because the issue with an offset is, it's an after-the-fact recording. That client has to record a carbon footprint, and then they can go buy offsets, which do nothing to lower their carbon footprint. Whereas with RNG, it's a one-for-one replacement of natural gas on your Scope 1 emissions. It will actually help you bring your carbon footprint down so that customer can report or that client can report a lower carbon footprint. This is actually evolving as it's being debated, throughout industry, but traditionally, it's a one-for-one on your Scope 1 emissions. Great. I think we've got time for just a couple more. There's quite a lot of questions coming through, which is great to see. Given the exponential increase in developers and visibility in RNG, could you speak to the range of returns for investors, and what is expected, given the risk profile, and how you are underwriting a new operational development project? I'll let Doran answer that, so I don't get- Yeah. I'll start with the easy part because we talk about this with the market quite often, just the way that we approach asset returns. We're taking all of our free cash flow effectively and investing it in new assets, and renewable natural gas is one of those assets. Generally speaking, across all of our asset categories, we're looking on a portfolio basis to get mid-teens equity returns on everything that we invest in. But that's on a risk-adjusted basis, right? When you talk about, you know, what these returns might look like, you know, a developer model is gonna look very different from maybe the Ameresco model, which will look very different than the way the lenders will look at your production, right? You know, your assumptions on RIN prices, your assumptions on LCFS prices, or if you're going into the voluntary market, you know, what kind of long-term fixed price contract can you get, at what price? You know, we run a number of scenarios on a risk-adjusted basis in order to support our thesis that we've got a risk-adjusted mid-teens equity returns that we're targeting, right? I think that when investors look at this market, certainly if you are interested only in development, you're going to expect higher returns. That's much more speculative. It's no different than real estate development, right? If you're looking to invest in operating assets, pure operating assets with no development risk, you know, the way we look at things, I think the return hurdles are gonna end up being lower, right? When you look at buying, say, for example, you know, assets that are operating, and have a track record of operating independently, and by that, asset-by-asset basis. You know, I mean, Ameresco talks about its track record, capabilities of developing and constructing and operating projects. I'm talking about specific asset operating history, you know, that brings the risks down, and therefore the returns should come down as well. There's a little bit of a spectrum. Our hurdles are kind of right there in the mid-teens on a risk-adjusted basis. Mike, I don't know if you wanna. The only thing I would suggest is, Lisa, at our organization, we bring that analysis down on a per project basis. When I look at one RNG projects compared to another, there are no two the same. There are no two landfills the same, there are no two projects the same, and we evaluate all the nuances and risk of a particular project against the return. We might take a lower return on one project 'cause the risk is less, and we might require a higher return on other 'cause there's more risk. We get into the weeds on a per project basis. Perfect. We have time for one more, I think. How does pyrolysis compare to electrolysis and other methods to create renewable hydrogen? Is that something you guys can touch on? The only thing I'll touch on pyrolysis, and we've looked at that technology for many, many years, is, and it's not as much applicable to the question you're asking. We've shied away from it because in some communities, they look at that, at it still as a form of combustion, and permitting can have its challenges. Other than that, we haven't spent any more time, at least at our organization, on pyrolysis, especially with regards to any other, you know, fuel supplies or alternative fuel supplies. There was one organization that was actually using pyrolysis to essentially bring down waste and generate electricity from it. I will say the cost per unit produced was very high. Perfect. There's a very quick question here on your thoughts on renewable diesel. Is this a market that you guys have been involved in or would be looking to be involved in? We've looked at it. Doran has spent many hours, I know, with a magnifying glass, going through reams of information. I think going back to what Doran said, Don't ever say, you know, never say never. What we have tried to do is focus on things that we know we're really good at, as the market evolves, and so we're very cautious about going too far outside our development expertise right now. We have never developed an RD plant. It's not to say we wouldn't participate with others in some fashion to do so, but right now it's not part of our focus. No. Fair enough. Before we end the webinar, do you each maybe have a sort of closing statement or some thoughts about renewable natural gas and those looking to maybe enter the space? The first poll we did said that about 29% of the audience are looking to enter the market in the next 12 months-18 months, and a further 25% considering it long term. What sort of closing statements and advice have you got for these folks? I'll just, at a high level, having been in the energy sector now for over 30 years, I would suggest that the energy industry in general is going through a renaissance, and the opportunities for any investor are tremendous. What I love about this space is that it's still fledgling, right? We haven't hit pure maturity yet. We're far from it. If you have the confidence like we do in the space and the trajectory of where climate change initiatives are going, I think this is a great space to take a hard look at. The cautionary tale is, look at the depth of talent in the organization that you're gonna invest in to make sure they have a proven track record, because, it, this space is complicated and has its challenges, and for some newbies, it could be a quick lesson on how to crash and burn. I think the way to think about RNG markets today, it's I think of it bigger. I mean, we've got the question about renewable diesel, but if you think just more broadly about biofuels, you know, the need for alternative fuels is there, it's existing, it's growing. 100% electrification is not something that's gonna come in the near term, and as a result, the demand for biofuels of all forms, is gonna continue to grow. Right now, we've got renewable natural gas. We're taking the methane and converting it to electricity. We've got the possibility of hydrogen going forward. As you mentioned, there's other alternative fuels that are gonna be thought about for diesel, certainly aviation fuel, et cetera. The whole entire kind of sphere of biofuel space is poised to grow substantially, and I really am excited about where Ameresco sits in that space as a developer with the expertise in almost all of the feedstocks that are actually producing these types of fuels. You know, having the ability and the track record to figure out how to transform what is methane being produced under the ground in a landfill, into something that's actually usable as a fuel, whether it's somebody's backup generator or somebody's stove, or a natural gas vehicle. You know, we are really, really excited about the expansion in the market and, you know, our business model being technology agnostic and the ability to flexibly approach any of these markets. It's just really exciting, and I'm glad to hear the interest as, you know, hoping for higher numbers in the polls, but we'll see what happens if we do this again 12 months from now. Absolutely. That marks the stop for the webinar. I'd like to thank everyone so much for joining. If there were any other questions or anything we can answer today, I'm sure Mike, Doran, and Ameresco would be happy to answer them on another occasion. As a quick reminder, this is one of many member-exclusive sessions that deep dive into assets, trends, pipelines, risks, inflations, best practices. Our next membership activity is the Infrastructure Investor North America conference, which is in New York, December 6th and 7th. Please get in touch if you'd like to attend. Thank you so much, Doran and Mike, for your time and your expertise on renewable natural gas. Thank you, everybody. Thanks. Bye-bye.