Livestock production and food processing are two of the many industries that continue to be scrutinized by environmental groups and consumers. Both industries come under fire for their use of resources (energy, water) and production of waste materials. An anaerobic digester that captures biogas combined with a process for utilizing the biogas can help on both fronts.
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This increasingly popular approach allows livestock producers and food processing facilities to recycle discarded organics into energy and useful byproducts such as compost, fertilizer, and livestock bedding.
AgStar estimates that biogas recovery systems are technically feasible at over 8,000 large dairy and hog operations. These farms could potentially generate more than 13 million megawatt-hours of energy per year.
A McKinsey global survey of nearly 2,000 executives from a variety of industries found that 72 percent of respondents say considering sustainability is &#;extremely&#; or &#;very important&#; for managing corporate reputation and brands.
There are a number of ways in which anaerobic digestion and biogas use can combat the negative perception of both consumers and the communities surrounding livestock and food processing operations.
1. Responsible nutrient management: Livestock producers such as beef cattle ranches, swine and poultry farms, and feedlots and CAFO facilities are subject to both regulations and community expectations related to the responsible management of animal waste. Dairy farmers also must consider nutrient management in their operations.
One of the key factors to meeting these demands is manure storage or disposal. Related processes need to be managed in a manner that limits the introduction of nitrogen and phosphorus to water sources via surface runoff and groundwater infiltration.
There are many types of manure management techniques, but anaerobic digestion combined with biogas storage has the added benefit of also reducing odor. The effluent remaining after controlled anaerobic decomposition is low in odor and rich in nutrients.
Digester covers for capturing biogas range from fixed and floating covers to inflatable membranes.
2. Improving air quality and eliminating a public perception of wastefulness: Anaerobic digestion of livestock manure releases methane, a greenhouse gas with a global warming potential 25 times that of carbon dioxide. Operations that capture the gas are preventing unwanted methane emissions.
In some cases, facilities design their digesters to incorporate flares to burn the biogas they capture, instead of using it for heat or energy applications. Combustion converts methane to carbon dioxide and water, which results in a net GHG emissions reduction. But the environmentally watchful portion of the public views flaring as a waste of a potential energy source &#; a perception that isn&#;t positive for an agricultural company&#;s corporate image.
To reduce flaring, biogas from digesters can be used in a number of ways.
It can be used as CNG vehicle fuel (after conditioning). Or the biogas can be converted using a combined heat and power (CHP) unit. Smaller facilities that are looking for a solution with very low emissions and the ability to use the gas with little to no scrubbing could consider a CHP unit with a Stirling motor.
By using the biogas captured, a facility can both reduce the amount of energy that it needs to purchase, and combat potential negative public comments about its business operations.
In fact, taking such steps toward sustainability can actually elevate the reputation of a company.
Fortune magazine recently wrote about one of the country&#;s largest dairy operations, Fair Oaks Farms. The article, titled How A Huge Dairy Is Solving A Major Pollution Problem, described the company&#;s owners as &#;dairy geniuses&#; for designing the operation to use the biogas from cow manure to power its delivery trucks.
Like many facilities decisions, investing in anaerobic digesters and biogas systems can be a significant financial and operational undertaking. Many companies have discovered that teaming up with other sectors can make it more economically feasible and more efficient.
These partnerships are made more impactful by the fact that codigestion, which is the treatment of a mixture of at least two different substrates, can significantly improve the efficiency of anaerobic digestion.
1. Inter-Industry Partnerships
According to AgStar data, there are 242 anaerobic digesters operating on livestock farms in the United States. But not all of the farms produce the right volume or composition of feedstock for their digesters. So they&#;ve joined with other industries, resulting in increased biogas production and better gas quality.
One of the more common partnerships is with the food processing industry. Food waste makes an excellent feedstock; it has as much as 15 times the methane production potential that dairy cattle manure does. Food waste substrates combined with manure can improve methane generation.
Anaerobic digesters that are designed for processing dairy manure can accept food wastes which are similar to dairy manure in terms of total solids, volatile solids, chemical oxygen demand, and moisture.
Jordan Dairy Farms in Massachusetts is an example of a dairy that uses anaerobic digester technology to blend farm manure, food scraps, and food processing byproducts to produce biogas.
The Jordan Dairy Farms digester system, which is owned and operated by AGreen Energy and was designed by Quasar Energy, has been in operation since and uses approximately 25 percent manure and 75 percent organic food waste, which is provided by HP Hood & Sons, Cabot Creamery Cooperative, Kayem Foods, and Cains Foods.
Food waste is delivered to the farm on a daily basis at no cost to the dairyman. The digester generates approximately $200 per cow per year in revenue and cost savings for Jordan Dairy Farms from power, heat, fertilizer, and bedding.
2. Private-Public Partnerships
Similar to how dairy manure and food waste work well together for codigestion, municipal WWTPs and the food processing industry are combining sewage sludge and food waste to increase biogas production.
Learn how WesTech helped the City of Cortland, New York, improve their wastewater plant to accommodate trucked waste disposal for a Greek yogurt plant
A California State University research project generated scientific information on the quality and quantity of biogas from anaerobic codigestion of food waste and municipal wastewater sludge. One of the conclusions of the research was that with a contribution of 25 percent from food waste to the total volatile solid applied to the anaerobic digesters, the codigestion of food waste and municipal wastewater sludge is a viable and stable process. Daily biogas production increased by 60 percent.
As of , only about 15 wastewater treatment facilities in the U.S. were sending food waste, particularly from commercial sources, to facilities that use anaerobic digesters to convert the food into biogas.
Some regions are carefully considering how to take advantage of that untapped potential. In Oregon alone, the state&#;s dairies, wastewater treatment plants, municipal solid waste collectors, and food processors have the feedstock and infrastructure to generate over 100 MW of biogas energy, but currently have only 8 MW installed.
Financing is one of the key hurdles to realizing the potential of industrial biogas. Partnerships can help there, as well.
Pennwood Farms is a 500-cow dairy in Pennsylvania that utilizes an anaerobic digester to process manure into electricity and bedding for the cows. The construction of the digester complex is an example of a dynamic public/private partnership.
Funds from a U.S. Department of Agriculture (USDA) Rural Energy for America Program grant were used to build the digester system, which produces enough biogas to generate electricity for the farm and several homes in the community. The clean bedding generated by the digester also saves the farm approximately $60,000 in costs annually.
These are just a few examples of digester and biogas opportunities that can benefit multiple parties. Companies who are willing to work together to realize those benefits have much to gain, both in terms of reputation and cost savings.
How can one determine if an anaerobic digester provides a value-added economic opportunity as well as an environmental solution for my livestock operation?
There are several factors to consider:
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Size of Farm or Ranch Livestock Operation and Manure Type
There are 8,000 large dairy and hog operations where biogas recovery systems are technically feasible. A large operation is defined as an operation with a minimum of 500 head of cattle, 2,000 hogs with anaerobic lagoons or liquid slurry manure management systems, or 5,000 hogs with deep pit manure management systems where a minimum of 90 percent of the manure is regularly collected.
Also, smaller operations can partner with other smaller operations by forming a cooperative or similar organization and construct a jointly owned biogas recovery system which may result in a technically feasible system.
In addition to the farm size is your manure management technique compatible with biogas recovery technology? Biogas production is best suited for farms that regularly collect liquid, slurry, or semi-solid manure with little or no bedding. This requires the farm to collect manure:
Types of Manure:
Definition: Has been diluted to a solids content of less than 5%. This manure is typically &#;flushed&#; from where it is generated, using fresh, or recycled water. The manure and flush water can be pumped to treatment and storage tanks, ponds, lagoons, or other suitable structures.
Compatible with Anaerobic Digestion: Maybe. Can be adapted for biogas production and energy recovery in warm climates. In colder climates, it may be limited to gas flaring for odor control unless other organic materials are codigested.
Definition: Has been diluted to a solids content of 5-10% and is usually collected by a mechanical &#;scraper&#; system. It can be pumped and is often treated or stored in tanks, ponds or lagoons prior to land application.
Compatible with Anaerobic Digestion: Yes. For biogas recovery and energy production, depending on climate and dilution factors.
Definition: Is handled as a semi-solid, with a solids content of 10-20%, and is typically scraped. Water is not added to the manure and the manure is typically stored until it is spread on local fields.
Compatible with Anaerobic Digestion: Yes. Fresh scraped manure (less than one week old) can be used for biogas and energy production in all climates, because it can be heated to promote bacterial growth.
Definition: Has a solids content of greater than 20% and is handled as a solid by a scoop loader.
Compatible with Anaerobic Digestion: Maybe. Aged solid manure or manure that is left &#;unmanaged&#; (i.e., is left in the pasture where it is deposited by the animals) or allowed to dry is not suitable for traditional digesters. However, regularly collected manure could be used in a digester.
Anaerobic digesters can use single or multiple feedstocks. Digesters that codigest manure with other feedstocks (e.g., fats, oils & grease, food wastes, cheese or wine wastes, manure) can increase biogas production. Additional pre-processing equipment and holding tanks may be required for codigesting. The tipping fees for other feedstocks provided to the digester can also be another source of income to the owner of the digester.
Location of the farm or ranch operation and the off-take sources
The location of the farm or ranch operation in proximity to potential off-take sources can determine the type of digester to construct and the off take(s): renewable nature gas (RNG), compressed nature gas (CNG), combined heat and power, electricity, compost, bedding etc.
The biogas generated for the anaerobic digester can be used to:
Generate electricity to:
Be used directly on-farm to fuel boilers or heaters, and in most processes requiring heat, steam, or refrigeration.
Be processed into higher quality fuels, including:
Be flared to:
Ownership of the digester to be constructed
There are several companies that will construct, operate, and own the digester placed on your livestock operation and share the income derived from sale of the off-take product(s) with the livestock operation owner.
In other situations, there are companies that will design and construct the digester owned by the livestock operation owner. In these cases:
In cases where smaller operations are considering partnering with other smaller operations by forming a cooperative or similar organization and constructing a jointly owned biogas recovery system, USDA Cooperative Services provides support and information for deciding whether and how to form a cooperative.[2]
Financing Sources /Incentives for Digesters
All projects require capital investment, which can be a direct cash contribution from the owner; financed with a loan, or both. Most digesters are funded through a combination of cash contribution by the owner of the digester and a loan. In cases where a loan is needed, USDA has programs that can support the financing needed.
Cash contribution can be cash available or equity financing funds from third parties to provide up-front capital in return for partial ownership or other valuable consideration.
Debt financing involves securing capital from banks, credit unions, savings and loans, or other traditional financial institutions. USDA has programs that partner with these lending institutions by providing loan guarantees. A USDA loan guarantee limits the exposure of the lender to any potential loss and allows the lender to provide better terms for repayment to the livestock operation owner. In some cases, USDA programs can provide grants as well as loan guarantees for a portion of the digester costs. USDA programs are available for only a portion of the capital investment. Normally, a 20%-25% investment from cash/equity is required for participation by the USDA programs.
Depending on the off-takes from the digester, there may be tax incentives and/or other incentives available to offset some of the capital costs of the digester. These may include the EPA&#;s Renewable Identification Numbers (RINs) program, California&#;s Low Carbon Fuel Standard for transportation fuel offtakes, and power purchase agreements with local utilities. The Database of State Incentives for Renewables & Efficiency (DSIRE) is the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States: https://www.dsireusa.org/.
Whether a financial institution provides the loan directly or partners with USDA for a loan guarantee, there are several components of an application that will require independent third-party services. These services include preparation of business plans, feasibility studies, technical engineering report on technology being utilized, and an environmental assessment. These types of services are considered eligible project costs and can be made a part of the loan.
Lee Enterprises Consulting, Inc. has expertise and experience to support the implementation of anaerobic digesters. These services include digester project planning, design and oversight, including genset, CHP and offtake solutions, business planning, techno-economic analyses, insurance and upgrading for all varieties of manure and facility types. For facility financing, LEC has numerous experts who can provide the following services for clients: identification of funding resources, both debt and equity; packaging of the funding application; environmental assessment; appraisal; technical engineering design and analysis; and feasibility studies.
About the author: Bill Hagy is member of Lee Enterprises Consulting. He is retired from the USDA&#;s Rural Development, where he progressed from Assistant County Supervisor administrating loans, loan guarantees, and grant programs to serving as Acting Under Secretary for Rural Development. He spent his final three years as the Special Assistant for Renewable Energy to United States Secretary of Agriculture Tom Vilsack advising on policy matters relating to alternative/renewable energy development. Bill has been recognized in the past as one of the Top 100 People in Bioenergy by Biofuels Digest. Lee Enterprises Consulting is the world&#;s premier bioeconomy consulting group, with more than 150 consultants and experts worldwide. The opinions expressed herein are those of the author and do not necessarily express the views of LEC.
[1] Much of the above information was sourced from the EPA&#;s AgStar website: https://www.epa.gov/agstar/anaerobic-digestion-right-your-farm
[2] https://www.rd.usda.gov/programs-services/all-programs/cooperative-services.
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