BioCycle February 2012, Vol. 53, No. 2, p. 19
USDA REAP Funding Cut
The USDA has announced FY2012 funding for the Rural Energy for America Program (REAP) at $25.4 million, which will support at least $12.5 million in grants and up to $48.5 million for the guaranteed loan program. The funding, required by the 2008 Farm Bill, was significantly reduced from FY2011’s level of $70 million. REAP provides grants, loans and technical assistance funds for renewable energy and energy efficiency projects, including digesters. Maximum amount of funding for individual energy projects is $500,000; up to $50,000 is available for feasibility studies.
Application deadlines are (all 2012): February 21 for energy audits and energy development assistance, March 30 for renewable energy grants and feasibility study applications and June 29 for guaranteed loans. For questions on grants submissions, USDA requests that applicants contact their state Rural Development Energy Coordinator. Public meetings regarding REAP funding are being scheduled during the first quarter of 2012.
State Locks Up Methane With Prison Digester Project
The Maryland Board of Public Works has given the green light to Arlington, Virginia-based Ecocorp to build an anaerobic digester (AD) on a 4.2-acre site at the Eastern Correctional Institute. The private company will retain a 30-year lease on the land for an annual fee of $100. Feedstock for the digester will include crop residue and agricultural waste from commercial poultry operations in Delaware and Maryland. Energy crops include switch grass, barley and corn leaves and stocks. The 1MW facility, which will process more than 6,000 tons of poultry manure annually, is expected to be online by 2013. Under the agreement with Ecocorp, the state will purchase the power at a set rate for 20 years, and Ecocorp will invest $5 million to build the plant. The project helps meet Maryland’s goal of running on at least 20 percent renewable power by 2022.
“The Delmarva Peninsula is the chicken capital of the country but also rural and underserved by utilities,” says James Harkins, director of the quasi-governmental Maryland Environmental Service (MES), which brokered the deal with help from the Department of Public Safety and Corrections and other agencies. When the state didn’t have enough power to run its prison in the 1980s, it built a wood-fired power plant to run on slash (waste) from the timber industry, Harkins explains, but was still buying 25 percent from the grid. “This AD project will supply more than 25 percent,” he says, adding that Ecocorp will build and run the facility on property next to the existing wood-fired power plant. “This project is significant as a model for other communities. We want to show the agriculture community that this will work. We see a future for AD among the poultry producers themselves.”
Currently, Harkins says, the state of Maryland and the poultry industry combined are sharing an annual $1 million tab to haul chicken litter from the Eastern Shore where it is saturating the land and waterways with nitrogen and phosphorus to farms in the western part of the state where it is land applied. Harkins adds that MES would like to be a driving force in linking farmers and AD projects across the state, including poultry farmers in the east and dairy farmers in central and western Maryland. “We’ve been working on this project for a few years. Early on, we felt like a lone voice in forest. Our governor is a big proponent of this project. It has a lot of energy behind it. Now we’ve just got to make sure it succeeds. It’s only 1MW, but we’re looking at it as the first of several.”
Regional Waste District To Launch AD Pilot
The Monterey Regional Waste Management District (MRWMD) board of directors voted on January 20 to move forward with a $1.6 million anaerobic digestion (AD) pilot project. The district currently receives about 2,500 tons of commercially collected food waste annually and processes about 20,000 tons of organics total. The AD facility will be designed to process 4,000 tons/year of food and green waste. Zero Waste Energy, LLC, based in San Jose, was awarded the contract to develop the five-year pilot project in mid-December, allowing the company to qualify for $500,000 in federal stimulus funds through the Section 1603 renewable energy incentive program that expired December 31. The district has had a composting operation for the past 20 years of its 60-year history. It has been composting food scraps, together with other green waste, in open-air windrows for more than three years.
Once a final agreement is in place, the digester could be up and running in as little as six months. “We already have a composting permit and this is a form of composting in California, from a permit perspective,” says MRWMD General Manager/District Engineer William Merry. Also helping to fast track the project will be the new modular SmartFerm dry fermentation system utilizing German Kompoferm technology, to which Zero Waste Energy holds the exclusive U.S. license. Smaller, pilot-scale demonstration projects are also exempt from the initial intense scrutiny of the California Environmental Quality Act, he adds. “We will need to do an environmental review here within two years but they said, ‘Go ahead, get it up and running.’”
Initially the roughly 2,500 tons/year of food waste being composted will be going to the digester. “That’s not a lot but it’s a start, and plans are to double that depending on the generators and the haulers,” Merry explains. “The local business community has been a driving force behind lobbying local haulers to expand their food scrap collection routes.” MRWMD is currently generating about 5 MW of power through landfill gas capture. The district uses the power onsite and sells the excess to the utility grid for just below 8 cents/kWh. Discussions are underway with the nearby wastewater treatment plant to purchase MRWMD AD power at a yet-to-be-determined price. The treatment plant already generates about 2 MW of power from its own digester but still has to purchase electricity to run the facility from the local utility — often at peak power premiums.
Le Sueur, Minnesota
Avant Energy And MMPA Team Up On Biogas Plant
A public-private partnership called Hometown BioEnergy plans to build a $30 million plant to produce biogas from agricultural and food processing waste near the southwestern Minnesota town of Le Sueur. The Minnesota Municipal Power Agency (MMPA) and Minneapolis-based Avant Energy — an energy project development and management company — want to build the plant on the site of a former gravel pit, about 40 miles south of the Twin Cities. In addition to generating electricity, the AD plant will create liquid fertilizer and burnable pellets made from agricultural waste. The pellets will be marketed as an alternative fuel for heating and manufacturing.
The plant will process about 45,000 tons/year of agricultural residuals, including corn silage, potato waste and chicken manure. Denmark-based Xergi will build the plant, to be equipped with CHP engines with a total output of 8 MW — enough to power about 40,000 homes and businesses. Xergi’s Flexfeed module, which pretreats and heats the biomass before it is fed into the digesters, is being installed. The project has received final regulatory approval, including a permit, from the Minnesota Pollution Control Agency; construction is expected to begin in May or June, with completion about 12 months later, says Avant Energy project director Kelsey Dahlen. “The business concept is unique to the Midwest and Minnesota,” he says. “It’s a very natural fit for agricultural areas such as Minnesota.”
Hometown BioEnergy will also help MMPA meet the state-mandated requirement to provide 25 percent of its electricity from renewable sources by 2025, Dahlen adds. Local businesses slated to receive electricity from the plant include a countertop factory, food processing plant, a greeting card company and a General Mills research facility. Minnesota already has a number of small anaerobic digesters, mostly used by dairy farmers to generate electricity for their own use. The Le Sueur plant would be the state’s first commercial-scale biogas operation, according to Dahlen.
Grants Help Dairy Build AD Project
Grants that include $331,709 from the USDA Rural Energy for America Program (REAP) and $450,000 from the Natural Resources Conservation Service’s Chesapeake Bay Initiative, along with a $300,000 grant and $245,000 loan from the Commonwealth Finance Agency, combined to fund a $1.3 anaerobic digester project at Hard Earned Acres, an 820 cow dairy farm near Shippensburg. The project is expected to produce enough electricity to run the farm, with a surplus 550,000 kilowatts to be sold back to the grid. Heat will also be captured from the generator set to produce hot water. Digested solids will be used for animal bedding while the liquid portion will be land applied as fertilizer. Fulton Bank provided a short-term $1,050,000 construction loan at 3.25 percent to finance construction costs initially, as grant money will not be available until the project is complete. The complete-mix digester project is being built by RCM International. Collected biogas will be metered, pressurized and pumped to a MAN 180 kW genset. An interconnection agreement was negotiated with PPL Electric Utilities.
The USDA has helped fund 14 AD projects in Pennsylvania, nine of them to help manage nutrient runoff in the Chesapeake Bay watershed. According to Bernard Linn in the Pennsylvania office of USDA Rural Development, while applications for 2012 REAP-funded projects are currently being considered, there have been substantial cuts in the program. Linn also lamented the loss of the 1603 Treasury grant program to fund up to one-third of eligible capital costs for renewable energy projects. “We still have value-added producer grants — feasibility planning grants that can be used for AD or any other biofuel projects,” says Linn. The planning grants max out at $150,000 and require a one-to-one match.
Tom Williams, director of USDA Rural Development for the state of Pennsylvania, explains that AD projects have a multiplier benefit within the communities where they are built. “It’s very beneficial to the local economy,” he says, adding that the projects utilize services from local companies and provide jobs, green power and help farms manage nutrients. “There is quite a ripple effect.” With a calculated net gain of $175,000 a year — including money saved on electricity and bedding and revenues from selling excess power — estimated payback on the project is 7.6 years.
Feed-In Tariffs Could Boost Biogas Projects
Biogas producers hope a review of Ontario’s feed-in tariff (FIT) for renewable energy will generate higher returns for them, even though the provincial government aims to cut the program’s costs. “Biogas projects need to be priced factoring in the unique complexity and operation and maintenance demands of this technology and an investment incentive that is comparable with other renewable technologies,” says Agrienergy Producers’ Association of Ontario (APAO), the industry advocacy group, in a brief prepared for the review.
The association wants higher basic FIT rates for electricity generated from on-farm anaerobic digesters. The current price ranges from 10.4 cents/kilowatt-hour for projects with capacity greater than 10 MW up to 19.5 cents for the smallest projects. The industry proposal would increase the lowest fee to 16 cents and the highest to 26.5 cents. It also says the 20 percent cost-of-living adjustment built into all FIT contracts — which run 20 years — should be increased to 50 percent for biogas projects. These and other proposed changes would let operators make the 11 percent annual return on investment the Ontario Power Authority envisioned when it designed the system, APAO says: “No biogas project is capable of attaining such a target based on existing prices.”
The two year review was included when the government introduced the feed-in tariff, North America’s first, in 2009. The program pays premium rates for electricity generated by wind, solar, small hydro and biogas. During last fall’s provincial election campaign, which reduced the Liberal government from a strong majority to a minority, the opposition Conservative party attacked the program for driving up electricity prices and promised to scrap it.
The government now appears set on lower rates. “We want to continue with a very strong, clean, green-energy economy,” but “at the right price,” says Ontario’s Energy Minister Chris Bentley. “We’ve had the start-up phase. Where these reviews have been conducted around the world — and there have been lots of them — they’ve seen price reductions.” APAO Executive Director Jennifer Green says biogas might not face cuts: “I don’t know that the minister’s comment on price regression was painted with a full brush across the renewable energy sector.” The APAO brief was among 2,900 submissions the energy minister says it received during a comment period that closed December 14, 2011.