Maximising Landfill Gas Income For Site Owners

For years, landfill gas has provided site owners with a steady income stream. The electricity generated helps cover long-term aftercare costs and makes use of a resource that would otherwise go to waste.

But many landfill owners are unknowingly leaving money on the table, which may only come to light when a landfill gas contract is coming to an end.

Operators may run sites in ways that boost their own short-term returns while reducing the long-term value of the gas resource. And contracts signed years ago may no longer reflect current technology or market conditions. In some cases, permits remain in the operator’s name, exposing owners to unexpected risks if the operator walks away.

The result is that the site continues to generate power, but the owner may not get the full financial benefit. The good news is that landfill owners can take control of the situation.

By re-tendering contracts, ensuring permits are held in their own name and planning for diversification into solar, landfill owners can focus on maximising landfill gas income today while creating a more secure revenue stream for the future.

In this blog, I’ll guide you through the potential pitfalls that can leave landfill owners out of pocket and the practical steps you can take to avoid them.

Practices That Can Reduce Long-Term Value

On paper, landfill gas generation is simple. Gas is captured, fed into engines and converted into electricity that’s sold via the National Grid. The operator keeps their share based on what’s listed in the project’s contract, and the owner receives the remainder of the income from the site.

But beneath that straightforward picture lie a series of operational choices that can make a huge difference to the owner’s income.

Over-extracting landfill gas

One of the most significant issues is over-extraction of landfill gas. A typical landfill gas site has the potential to produce income for more than 50 years if extraction is carefully managed.

But if an operator extracts too aggressively, they’ll deplete the resource much sooner than they should. So, for an owner expecting £100,000 a year in revenue share, even five years of lost generation could mean half a million pounds in missed income.

Maximising landfill gas income depends on balancing short-term output with long-term sustainability.

Engine inefficiency

Engine inefficiency also has a direct impact on revenues.

Manufacturers such as Jenbacher (INNIO) and Caterpillar publish technical data showing electrical efficiencies for landfill gas engines in the 36 to 42 per cent range, depending on model and configuration. For less efficient engines, this usually sits at less than 30 per cent. At larger sites, this difference translates into megawatts (MW) of lost output.

For example, the Pitsea landfill site in Essex has historically produced around 16 MW of power, enough to supply more than 14,000 homes. Even a small percentage gap in efficiency at that scale equates to tens of thousands of pounds each year.

This issue has also been affected by policy changes such as the removal of Renewable Obligation Certificates (ROCs), which reduced returns for many sites.

At other sites, retrofitting modern control systems has been shown to increase gas production by up to 10 per cent, creating immediate gains for both operator and owner.

Not taking advantage of new technology

Technology is also advancing, and not taking advantage of this could stunt your potential income.

A major new development comes from new micro engines that are now being installed at UK sites to capture energy from smaller gas flows. For owners of maturing sites, this can make the difference between income winding down prematurely and a continued, profitable revenue stream.

Traditional landfill gas engines are large units designed to run efficiently on high gas volumes. As a site matures and gas flows naturally decline, these engines often become uneconomic. They either run at poor efficiency or are switched off altogether, leaving usable gas in the ground.

Micro engines are smaller, modular generator units that can operate economically at lower flow rates. This makes them particularly well-suited for older or declining landfill sites.

Some landfill gas operators abandon generation once volumes fall below the threshold for larger engines. But operators using micro engines can continue to capture and monetise gas for several more years.

What this means for site owners

For landfill owners, the implications are significant:

• Longer revenue life – Micro engines extend the period during which gas can be profitably converted to electricity. This maximises landfill gas income over time.

• Flexibility – Operators can add or remove units as flows change. This matches capacity to the actual resource rather than relying on one oversized engine.

• Competition at tender – Smaller, specialist operators often deploy micro engines. This lets them bid more competitively for contracts and offer owners a larger share of revenues.

• Environmental compliance – By capturing lower flows that might otherwise be flared, micro engines improve the environmental performance of the site.

In short, micro engines allow landfill gas sites to remain financially viable long after larger engines would have been shut down.

At the end of a contract, owners should specifically ask potential operators about their ability and willingness to use this technology. It can make the difference between income declining sharply and remaining stable for several more years.

No right to full data access

Finally, there’s the issue of transparency. Operators usually control performance data, and landfill owners may only receive top-level reports.

Without the contractual right to full data access or independent monitoring, it’s difficult to know whether gas is being extracted and converted in a way that truly protects landfill gas income for the long term.

These practices aren’t necessarily intentional attempts to disadvantage landfill owners. They’re often the result of different priorities.

Operators are sometimes motivated by short-term output and efficiency of operations. But the landfill owner must focus on maximising landfill gas income over decades of site aftercare.

Retendering: A Sometimes-Missed Opportunity

Revenue splits between operators and landfill owners vary. But in many legacy contracts, the landfill gas operator retains the majority share. This can sometimes be as much as 93 per cent.

If landfill owners let these agreements roll over, they may be locked into outdated terms. And these terms rarely reflect the current market value.

Going through the retendering process is one of the biggest tips I can give a landfill site owner. It forces operators to compete for a landfill gas contract.

The market has evolved, with more landfill gas operators active than ever before. Smaller landfill gas operators using modular engines and leaner management structures can often run sites more economically. To win contracts, they may be willing to offer more attractive revenue shares to landfill owners.

The financial impact can be significant here. Over a 10-year contract, the difference in income from retendering can add up to hundreds of thousands of pounds.

Retendering is one of the most powerful tools available for maximising landfill gas income. Yet, it’s often overlooked in favour of convenience.

Even if the current landfill gas operator remains in place, the act of retendering creates leverage. It opens the door to renegotiating revenue splits, requiring investment in newer technology, and improving transparency around data and performance.

Permits: The Cornerstone of Control

Perhaps the most important step an owner can take in maximising landfill gas income is to ensure that permits are in their name.

In many cases, these remain with the landfill gas operator. This can seem logical, as the landfill gas operator is responsible for compliance, reporting and day-to-day management.

But this arrangement creates a serious risk. If the landfill gas operator withdraws suddenly or becomes insolvent, the site and its obligations remain. The landfill owner may then need to spend tens of thousands of pounds to reapply for permits at short notice. And this is all while carrying the liability for compliance and environmental risk.

Regulators will likely look to the landowner, regardless of who held the permit, because the site itself is their responsibility.

By transferring permits into their own name, owners retain ultimate control. Operators can continue to manage the site under subleases or operating agreements. But the landfill owner ensures continuity and reduces the risk of unexpected costs and downtime.

At the point of contract renewal or retendering, permit transfer should be non-negotiable. It is one of the simplest and most effective safeguards for maximising landfill gas income.

Planning for the Decline of Natural Gas

Even with the most careful management, landfill gas is a declining resource.

Government data shows that the amount of biodegradable municipal waste sent to landfill fell from 6.3 million tonnes in 2022 to 5.3 million tonnes in 2023. With less waste, a site produces less gas, and revenues inevitably fall.

The challenge for landfill owners is how to replace that income. Solar power offers one of the most compelling answers.

Landfill sites are particularly well-suited for solar development as they’re considered brownfield land with few competing land uses. Many already have grid connections from historic gas infrastructure, and their large open surfaces are ideal for ground-mounted solar arrays.

Solar developments typically generate reliable income for 25 to 40 years. Generally, return on investment (ROI) figures sit between 10 and 20 per cent. For a landfill owner currently receiving £160,000 annually from gas, a solar lease could mitigate declining landfill gas revenues.

Maximising landfill gas income isn’t just about sustaining revenues from a depleting resource. It’s about planning the next phase of the site’s value. As landfill gas contracts expire, owners can use this opportunity to retender operator agreements, restructure permit ownership and engage with solar developers.

In doing so, they can manage the decline of one resource while building the foundation of another.

Want a deeper look at how to approach solar development on your land? Read our guide on How to Start a Solar Farm.

Final Thoughts on Maximising Landfill Gas Income

Landfill gas remains an important source of income for landfill owners. But without careful management, you can lose a fair amount of its value.

Landfill gas operators may prioritise short-term output or cost-saving measures. However, these don’t always maximise long-term returns for the site owner.

It’s important to retender contracts to reflect today’s market, ensure permits are held in your name (to avoid regulatory risk) and plan for diversification into solar. By doing so, you’re more likely to succeed in maximising your landfill gas income. You’ll also safeguard the long-term value of the site as the gas resource declines.

Are you confident your landfill gas contract is still delivering the best value? When contracts roll over, many landfill owners miss the chance to improve terms and increase their revenue share. Lumify SiteScan™ benchmarks your site against the wider market. This highlights where you could increase your income and helps you prepare for tendering with confidence. Speak to our expert team today to start maximising your landfill gas income.

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