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From Digestion to Distribution

Power companies in dairy regions have known for years that there is a distributed source of energy underfoot: cow manure. Using anaerobic digestion, manure can be converted into biogas and combusted in a generator to produce electricity. However, anaerobic digesters aren't cheap. It takes collaborative funding and diligent project management to bring multiple anaerobic digesters on line within a power district-and that's just the beginning.
By Ryan C. Christiansen
It's enough to drive a dairy farmer crazy. After years of hearing neighbors complain about the smell coming from his lagoon, a farmer installs an anaerobic digester, effectively reducing the odor. But now instead of driving the extra mile to circumvent his farm, people keep knocking on his door wanting to see where he put the poop.

"Once people hear about this, they want to see it," says Dave Dunn, coordinator for Central Vermont Public Service Corp.'s CVPS Cow Power program. "We usually drive the farmer crazy with requests for tours. I'm not talking about just Vermonters. I'm talking 15 busloads from Montreal on the same day. You hold an open house and a couple thousand people show up. It's people who live in California, who come to Vermont during foliage season, and they remember reading an article in their local paper and they just drive up to the farm and say, ‘Hey, do you mind if I come and take a look at it?' That can be a challenge for some of our farmers."

CVPS, an investor-owned utility based in Rutland, Vt., with 159,000 customers in 152 communities, currently has five farms with anaerobic digesters and power generators on line
producing 10,000 megawatt hours of total electricity per year. The company expects to have four new farms on line in 2009 producing an additional 6,500 megawatt hours annually.

Short-term, CVPS desires to generate 20 megawatts of energy from digesters by 2012. Its volunteer customer-funded CVPS Cow Power program began in August 2004 and when its first farm, the Blue Spruce Farm, began producing electricity in January 2005, more than 1,000 customers already had signed up to contribute an additional $0.04 cents per kilowatt hour to help pay for the operation.

Approximately 1,200 miles to the west, Dairyland Power Co-op, a generation and transmission cooperative based in La Crosse, Wis., that provides wholesale electrical requirements and other services for 25 electric distribution cooperatives and 19 municipal utilities in the Upper Midwest, currently has three farms with anaerobic digesters and power generators on line producing 11,000 megawatt hours of total electricity annually. The utility purchases electricity from three additional farms with digesters and generators, but total power generation for those new additions has not been fully quantified. Long-term, Dairyland desires to generate 25 megawatts of electricity from digesters. Dairyland's volunteer customer-funded Evergreen program helps to finance digester power generation. Customers within Dairyland's 25 member cooperatives can pay $1.50 per 100 kilowatt hours each month to fund the program.

Incentives for Utilities
Both utilities have had some success with "cow power," but funding for electrical distribution requirements and digester technology challenges continue to be hurdles. Nevertheless, state renewable portfolio standards (RPS) specifying that electric utilities must generate a certain amount of electricity from renewable resources by specific dates-and also customer and farmer interest-continue to drive utilities with dairies in their service areas to tap those resources.

Because Dairyland's service area straddles Wisconsin, Minnesota, Iowa and Illinois, the utility must juggle meeting the various RPS in those states. According to the Pew Center on Global Climate Change, both Minnesota and Illinois have mandated all utilities produce 25 percent of their energy through renewable resources by 2025. Wisconsin requires 10 percent by 2015. "Iowa is mulling over what is going on in [neighboring states] and they will come up with something that's similar," says Neil Kennebeck, director of planning services for Dairyland. "That drives us to some extent," he says, "but we're also driven by enhancing the success of the farms that we serve-our name is Dairyland. It's in our best interest to enhance the success of those that we serve because, as a cooperative, we're owned by those we serve."

Vermont, meanwhile, doesn't have a RPS and will only implement one in 2012 if its utilities have not met certain renewable energy requirements, according to Pew. "We don't have that mandated yet in Vermont because we have a significant amount of renewable energy already," Dunn says. "And so what we do is register our projects in Massachusetts. That gives us a way to account for these (projects with) renewable energy certificates."

Dunn says the emerging carbon credit market is also an incentive. "Methane destruction is a big part of these projects," he says, noting that CVPS estimates its farms prevent 18,000 metric tons of carbon per year from entering the atmosphere. "That could have significant value," he says.

Incentives for Farmers
Farmers know the benefits of anaerobic digestion: odor control, pathogen reduction, fewer flies, conversion of groundwater-polluting organic nitrogen into manageable ammonia fertilizer, and the production of bedding for their cows. "Farmers are absolutely enamored with the idea," Kennebeck says. "The bedding these days for a 1,000-head herd is probably worth $100,000 per year. That (alone) is a fairly good incentive."

Farmers must also appease the U.S. EPA. In October 2008, the EPA finalized revisions to its National Pollutant Discharge Elimination System permitting requirements for concentrated animal feeding operations. Because the Clean Water Act prohibits large dairies from discharging nutrients into U.S. waters without a permit, those farmers must seek a permit and must also submit a nutrient management plan to the EPA. Kennebeck notes that anaerobic digestion provides farmers with a tool to manage those nutrients.

But operational benefits and regulatory incentives aren't enough to bring more cow power generation to the grid. Digesters, generators and electrical interconnections cost more than what wholesale electricity prices will pay for. "The challenge has been-not only in Vermont, but I think across the country-that farmers are not offered a reasonable price for the energy that they can produce," Dunn says. When CVPS first explored anaerobic digestion in 2003, he says the average wholesale price for electricity in Vermont was approximately $0.045 cents per kilowatt hour. However, digester project costs showed that a farmer would have needed at least $0.08 cents per kilowatt hour to break even. It was vital for CVPS to establish the volunteer customer-funded $0.04-cent-per-kilowatt-hour premium for farmers, Dunn says. The premium has provided up to $175,000 to individual farmers to help with startup costs.

Funds are also available through state programs, but the lion's share of funding for new digester projects has come from the USDA through its Renewable Energy and Energy Efficiency program. Dunn says without the USDA's financial backing, digesters would not be feasible. "I can honestly say without that 25 percent share from the USDA-even with all that we're doing here in Vermont-it would really be hard to get a project built," he says. "That's a key component."

Getting onto the grid
Incentives and funding are not enough to get a digester built, however, if the local electrical distribution system cannot support a power generator. Dunn says there are inherent problems that must be overcome to get cow power onto the grid.

"Utilities design their systems to have a large central generating plant and radial arms of distribution that just go out into the country," Dunn says. "They were never designed to have generators at the other end, only at the center. It takes a creative interconnection scheme that will allow a generator to run productively for a farmer, but also have minimal impact on the power quality for all of his neighbors. [A generator] turning on or off can have a fairly significant effect on the local distribution system. There are mechanisms that can help solve that." Dunn explains that CVPS uses what is essentially a high-quality circuit breaker with some computer controls to help balance the load.

Even with fancy interconnection schemes, adding a generator to the grid simply doesn't make sense in some situations. "If we need to build 15 miles of distribution or transmission to do it, the economics don't work out," Kennebeck says.

Dunn says in some instances, even fairly large farms are served by single-phase lines, which may be a deterrent if they have to bring three-phase electrical distribution to the farm. "That could be a big enough expense that it negatively affects the economics of the project," he says.

Red Tape
Even if a digester project is desirable, fundable, and feasible, there is a lot of red tape to cut through before the farmer can put a shovel in the ground. The USDA grant application alone fits into a three-ring binder that is 2 inches thick, Dunn says. Water, air, electrical and even archaeological assessments must be dealt with, Kennebeck says. "You can't just build it," he says. "Everything is regulated." Neighbors, too, must be convinced that the project is a good idea. "Farmers need to do a lot of communicating," Dunn says.

To help the farmer, CVPS Cow Power has a full-time project manager to help identify funding opportunities, obtain permits, fill out paperwork and work with the digester technology provider. "Dairy farmers (already) have a million other things that they are doing," Dunn says.

Digester Technology Challenges
GHD Inc. of Chilton, Wis., has been the primary anaerobic digester technology provider in Vermont, Dunn says. According to GHD, the smallest dairies served by its technology have approximately 650 head of cattle. In Wisconsin, Dairyland's three primary digesters use Microgy-branded technology provided by Environmental Power Corp. of Tarrytown, N.Y.; each of Dairyland's digesters process manure from approximately 900 cows. However, CVPS and Dairyland digester operations pale in comparison with many of GHD's and Environmental Power Corp.'s projects, which serve farmers with thousands of cattle. Smaller farmers have been virtually eliminated from cow power programs.

To meet this challenge, Kennebeck says Dairyland has been working with a company that develops systems for sewage treatment plants and potable water systems to develop a technology that would be feasible for a farmer with as few as 250 head of dairy cattle. He says the smaller reactor is more efficient and costs less. "Working on the development of this smaller tank for smaller herds is something that we're very interested in doing," Kennebeck says. "We don't want to turn our back on the smaller farms." However, continued research and development is on hold because of the recession. "Nobody has got a lot of walking-around-money anymore," Kennebeck says.

CVPS is in the same situation. "In Vermont, our biggest farm is 1,500 cows and so, compared with the rest of the country, we're relatively small by comparison on the dairy scale," Dunn says. He says what is needed are systems that are cost-effective for dairies in the 200- to 300-cow range.

To offset the need for more cows, smaller farmers can partner with food companies to process food waste with their manure. Dunn says all CVPS digesters use additional food waste, including whey from cheese-makers, ice cream waste from Ben & Jerry's, and leftover grease from meat preparation. Kennebeck says he sees Dairyland tapping into sources of whey, turkey manure and vegetable waste for anaerobic digestion. "We have an incredible amount of agricultural waste streams that can be turned into something beneficial that now is not," Kennebeck says.

In the future, operational benefits and regulatory incentives might be enough to get farmers to build anaerobic digesters, even if they can't install generators to sell power to utilities, Kennebeck says. "Farmers will do this on their own without an electrical component," he says. "They will do it for bedding, to get the pathogen kill and to generate the gas, which they may be able to use on the farm to heat the home and to heat the barn."

"The regulatory world loves these digesters," Kennebeck says.

Ryan C. Christiansen is a Biomass Magazine staff writer. Reach him at rchristiansen@bbiinternational.com or (701) 373-8042.
 

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