Engineering, procurement and construction, or EPC, is a project model where a contractor manages a project from start to finish and delivers a turnkey system or facility that meets certain quality standards, timeline and budget. In many cases, time tends to be the key driver, and the project lead is generally a large construction company with engineering design resources or one that partners with an engineering company.
This model brings together the elements of construction and design, which could allow construction to start much earlier than a traditional design/bid/build, or DBB, project, since work can begin ahead of the mechanical and electrical designs being 100% complete.
Possibly the biggest driver toward an EPC model is the alloca-tion of management from the owner to the EPC contractor. A well-executed EPC project may then deliver a finished facility in a reduced amount of time.
However, for renewable natural gas projects—in which there is a high level of complexity in the design of digester and processing systems, yet low complexity in the actual on-site construction—an engineer-led EPC may be considered. In these projects, the engineer takes the responsibility for procurement and the responsibility for the construction contractor, while the construction contractor assembles high-priced components under the supervision of the engineer.
So, let’s examine the potential benefits and challenges of engineer-led EPC—and more importantly its viability as a standard solution for implementing RNG projects for developers and the utility industry.
Many owners who are investor-owned utilities may have little experience with RNG projects as they may not be part of their core business. However, experienced engineers may have performed multiple RNG projects for multiple owners and fulfilled all the functions from design to project management all the way through to full EPC. Experience facilitates efficiency, and an EPC also may remove the immediate cost burden of an owner having to either divert staff resources from the core business or having to hire more staff. The same applies to municipal owners and developers.
Placing the RNG project in the hands of an experienced engineer-led EPC may also allow access to the latest technology to innovate on the RNG project. There are multiple technical solutions out there for the digesting process, the controlling and moni-toring process, and the cleaning and refining process. Engineering companies are exposed to all these technologies and may partner with the manufacturers of these systems. This synergy may result in higher yields of RNG than traditionally expected as the systems improve over time. Of course, this higher yield may be converted into additional tax credits for the owner.
Liberty Utilities, for example, is working with Magnolia River Services to design and manage a full EPC project that will enable a Missouri landfill to export its RNG directly into Liberty Utilities’ high-pressure distribution system.
Both Liberty Utilities and the landfill were interested in this project in order to receive an income stream from the tax credits. However, neither party had the time or resources to develop such a project. “Liberty made the decision to move away from our tradi-tional DBB and utilize EPC for the Central Missouri Landfill RNG project based on the need to gain a holistic view of receiving RNG from a landfill,” said Mike Beatty, president, Central Region–natural gas at Liberty Utilities. “This methodology gave Liberty the confidence to not only move forward with the project but also gave us an understanding of the short-term and long-term operating effi-ciencies secured from this approach.”
MRS came in initially as the designer, but the project morphed into a full EPC, with MRS providing design, project manage-ment, procurement and construction. This project was completed in November 2024, and Liberty Utilities and the landfill developer received a completed project without any significant involvement.
The first major key to success in this case was that Liberty Utilities already employed MRS as a trusted and expert designer. This allowed MRS to take the project from what would have been a traditional DBB project and make it a true EPC project. MRS also worked with a known construction contractor with whom it had previously completed numerous projects.
MRS also worked with its known suppliers to procure the latest technology for the control and protection of the system. Again, it—rather than the utility—took on the procurement and coordinated delivery with the construction schedule.
The last major factor in the success of this project for Liberty Utilities is that MRS also leveraged its own internal resources to provide inspection and GIS services as part of the overall package, to maintain control over all elements and deliver a seamless project for the utility.
With growing demand and the expansion of RNG projects, an engineer-led EPC could offer an efficient and risk-balanced delivery method. Such a model tends to provide a focus on the technology to optimize the project, while also allowing a fully integrated team the ability to synchronize activities and produce a seamless delivery. Plus, the owner can transfer management to the EPC and fully utilize the EPC’s experience and knowledge.
Ultimately, the owner may receive a revenue stream from the project in the form of tax credits, without the need to divert its staff from the core business or having to augment its staff. This could make this delivery method a win-win for both the engineer-led EPC and the owner.
The RNG market is estimated to grow by 44% compound annual growth rate through 2028.1 With the demand for RNG and net zero increasing, plus the lucrative tax credits from both the state and federal levels, the growth of this market is inevitable. The only question is how to deliver on this growth. An engineer-led EPC model can lead the way.
1. Market Watch: 2023, Renewable Natural Gas Market Competitive Insight and Outlook 2030, 5/25/2023
Magnolia River Services is a provider of comprehensive inspection, engineering, GIS and technology solutions for utilities across the energy industry.