GPI study: Policy hinders Midwest biogas development

By Lisa Gibson
Posted August 20, 2010, at 11:38 a.m. CST

Significant potential exists for biogas-related projects in the Midwest U.S. but current policy at the state and federal levels does not recognize the immense resource potential from biogas, according to "Spotlight on Biogas: Policies for Utilization and Deployment in the Midwest," a recently-released Great Plains Institute study.

The report analyzes the current policy environment and examines policy reforms, along with new mechanisms that could spur development of biogas projects. These projects have potential across the country at landfills and wastewater treatment plants, but the Midwest has the advantage with its vast agricultural resources and agriculture-related processing industries, according to the study. "Without additional mechanisms and incentives geared toward diverse biogas utilizations and expanded ownership or management models, biogas development will struggle to grow and an opportunity will be missed to diversify our energy supply with a stable and versatile renewable energy resource," according to the study.

The policy discussion for the report, which included a group of 40 industry stakeholders, was split into five categories: existing policies that are best in class; existing policies that just need a tweak; proposed policies that need a push; promising new policies that need a champion; and other ideas. Not surprisingly, renewable portfolio standards are designated to the "just need a push" category and named as the prevailing policy of choice to drive renewable energy development. Feed-In Tariffs or Advanced Renewable Tariffs need a champion, according to the study, but designing them for individual states is complicated by existing federal law such as the Public Utility Regulatory Act of 1978 (PURPA) and the Federal Power Act of 1935. These policies only allow utilities to purchase power at avoided cost or at cost-based rates.

State regulatory agencies and actions play an important role in facilitating biogas project development, the report adds. Permitting requirements can hinder development if the regulations are not clear or uniformly applied. A common theme expressed by a majority of the stakeholders is a desire for future policy to level the playing field between direct incentives and grants for biogas production that would produce electricity, renewable natural gas or other options. The fact that biogas can be used to generate electricity is well known, but it can also be used for combined-heat-and-power (CHP), natural gas replacement, vehicle fuel and chemical production. Expanding incentive program definitions to allow additional uses of biogas could spur additional project development, according to the report.

"The right policy environment can provide a framework for project developers to determine the highest and best use for the biogas produced and not limit the technology applications for producing biogas or biogas utilization options," the report reads.

Both federal and state policies will be important for growth in a biogas industry, no matter which comes first. "I don't think they necessarily need to come in a certain order," said Amanda Bilek, GPI energy policy specialist and report author, adding that state policies can sometimes help push the federal government to get involved, too. "It's just important to start seeing involvement at some level."

The recent formation of the American Biogas Council is extremely important to the industry and is a positive step in the direction of parity for biogas with wind, solar and other biomass resources, Bilek said. Expanded management and operations models also need to be explored before the biogas energy sector can effectively expand.

While policy will help drive development, research is vital to ensure biogas projects increase efficiency and output over time, according to the study. Without laboratory and practical research, understanding of biogas technology and its effects will be limited. "We need a bit more research into co-digestion," Bilek cited as an example. "What can be mixed?"

Biogas can be produced from organic feedstocks such as manure, crop residue, waste from food processing and wastewater treatment, fats, oils and greases. Europe has led the world in biogas project developments, with the greatest number of projects, but also with a drive in technology advancements.

Bilek will discuss the study further, including a summary of the top points addressed by stakeholders and actions states can take to further biogas development, at Biomass Magazine's Southeast Biomass Conference & Trade Show in Atlanta, Ga., November 2-4.

The development of biogas resources in the Midwest holds significant promise for agricultural producers, processing facilities and production industries, the report states. "The Midwest has a unique opportunity to develop biogas resources; the time is ripe, the technology is ready, and the possibilities are endless," the study reads. "It is time for biogas to step into the spotlight and become a part of our energy future