Opal Fuels (Opal) reported its full-year financial and operating results for 2022. The company grew revenue by 42% year-over-year, reporting 2022 sales of US$235.5 million. Renewable natural gas (RNG) production came in at 2.2 MMBtu, a 38% increase compared to 2021. Opal is forecasting a 50% increase in RNG production in 2023.
“Opal Fuels has continued to execute on its strategic and operational goals,” said Co-CEO Adam Comora. “After bringing three RNG projects online in 2022, we now have seven in operation, six under construction and a growing advanced development pipeline [ADP].”
BioTown dairy RNG, a project that Opal first invested in back in 2021, commenced commercial operations in February 2023. Opal expects another three landfill projects to commence operations in 2023. Emerald RNG is expected to enter service in mid-2023, with Prince William RNG and Sapphire RNG expected to be operational in Q4 2023. Opal’s annual nameplate capacity for its share in the three projects is 3.8 MMBtu. Opal defines nameplate capacity as “the annual design output for each facility and may not reflect actual production from the projects, which depends on many variables including, but not limited to, quantity and quality of the biogas, operational up-time of the facility, and actual productivity of the facility.”
Opal expects even more RNG production in 2024 as projects enter service and it keeps its pipeline moving. “The RNG industry continues to benefit from tailwinds as the potential benefits of the Inflation Reduction Act [IRA] become clearer,” said Comora. “Additionally, new pathways under the Renewable Fuel Standard such as eRINs are being considered and new offtake markets are developing. More importantly, the flexibility of Opal Fuels’ vertically integrated business platform continues to maximize value for stakeholders, reduces volatility from environmental credit pricing and provides optionality as public policy and markets continue to evolve. We expect that in the second half of 2023 we will begin to see the benefits of the IRA’s Investment Tax Credits provisions. Additionally, guidance on the 45Z production tax credits, and clarification on the proposed eRIN pathway under the RFS program should be available. This should add to the industry tailwinds, providing meaningful benefits to our vertically integrated business.”
“We anticipate putting at least 2.0 million MMBtu of RNG projects into construction this calendar year,” said Co-CEO Jonathan Maurer. “We also continue to expand our ADP. Recently we added 0.8 million MMBtu of anticipated nameplate capacity to ADP, and now have a total of approximately 8.3 million MMBtu across 19 projects. In addition, as we continue to evaluate projects across the sector, we expect our pipeline of opportunities to grow. We are pleased that some of the development headwinds we experienced in 2022 have begun to subside.”
The company’s Fuel Station Services segment sold, dispensed, and serviced an aggregate of 33.3 million and 115.9 million gasoline gas equivalent (GGEs) of transportation fuel for the three and 12 months ended December 31, 2022, up 21% and 20%, compared to prior-year periods. This volume includes 8.9 million and 29.4 million GGEs of RNG dispensing for the three and 12 months ended December 31, 2022, up 33% and 41%, compared to prior-year periods.
Opal renewed its agreement with UPS to provide operations and maintenance services for 51 fueling stations for an additional 10 years. During 2022, it signed long-term agreements for sales of 10.6 million annual GGE for 17 new Opal Fuels stations, which are now under construction.
