Ontario, Canada: Favorable News On Biogas Feed-In Tariff
At its annual meeting in March, members of the former Agrienergy Producers’ Association of Ontario voted to become the Biogas Association. Soon after, biogas producers learned they’d get some of the changes they’d lobbied for during the Ontario government’s two-year review of North America’s first Feed-in Tariff (FIT), which pays premium rates, under 20-year contracts, for electricity fed to the provincial grid from solar, wind, hydro and biogas generating facilities. “There’s always room for improvement — overall, we’re very pleased with the result,” said Jennifer Green, the association’s executive-coordinator. While it’s too soon to say whether the revisions will reinvigorate an industry that’s stalled at 30 projects out of potentially hundreds, “it’s a step in the right direction,” she added.
Although the review didn’t increase the biogas tariffs as the association had proposed, it didn’t cut them either. That’s considered a win, because the government’s stated aim was to reduce costs, and it is substantially reducing the payments for wind and solar generation. For now, biogas producers will continue to receive a base price of 16 cents per kilowatt-hour (kWh) for electricity from generators with a capacity of 250 to 500 kW, and 14.7 cents for larger installations. Those rates are nearly double the current average paid by residential consumers and more than quadruple the wholesale price.
Equally critical to the biogas industry, the government also announced annual reviews of the tariffs for all renewable electricity sources. The new rates, to be based on estimates of capital costs and inflation, will apply to any contracts signed during the following year. In addition, it will increase the inflation adjustment for existing biogas projects — among the Biogas Association’s key demands. The original FIT rules for all projects included an annual cost-of-living increase based on 20 percent of their tariff. If, for example, a project’s contract paid 16 cents/kWh of electricity, and the cost of living rose 3 percent, the rate increase would amount to three percent of 3.2 cents, or 0.096 cents. Pointing to higher maintenance and replacement costs for biogas, the association called for and won adjustments based on 50 percent of the rate. At 3 percent inflation, the tariff would increase by .24 cents.
The Ontario government also announced regulatory changes that should reduce how long it takes for the Ontario Power Authority (OPA), which manages the program, to process applications for biogas projects. Other revisions might reduce the time and expense for environmental assessments of projects, particularly those aiming to include more than 25 percent off-farm material in the feedstock for their anaerobic digesters. The government may also alter a provision that gives the OPA, rather than producers, any carbon credits or other environmental attributes from their projects and has asked for comments on that issue. An Energy Ministry spokesperson says OPA will continue to claim 80 percent of any profits from new products that biogas operators develop from their digester wastes. While the FIT program has focused the industry on electricity production, there is increasing interest in converting biogas to transportation fuels or natural gas that could be fed into the pipeline grid.
Portland, Oregon: Biogas Project Eschews Public Funding
In the wake of controversy surrounding a potential public/private partnership to help finance a $55 million anaerobic digestion facility, the company developing the project announced it would now seek financing entirely through private investment. Columbia Biogas President John McKinney sent a letter to Portland Mayor Sam Adams dated March 30 explaining his company would no longer ask the city to guarantee loans with garbage and sewer fees. Portland is currently dealing with a lawsuit alleging that council violated the city charter by diverting water and sewer fees to projects tangential to the mission of the water bureau and Bureau of Environmental Services. In his letter to the mayor, who had expressed support of the project as well as the pledging of city funds to guarantee loans, McKinney stated: “Although the economic, environmental and public benefits of our facility provide a strong basis for a public/private partnership, we have recently experienced significant interest from the financial community to provide financing for the facility. Thus … we will finance the facility privately.”
The anaerobic digester — located on 11-acres within the Portland city limits — will initially process 100,000 tons annually of mixed food waste, industrial solids, liquids from local food processors and grease trap waste, provide 4.2 MW of power at build-out. It is scheduled for an August 2013 start-up. Although Columbia Biogas will no longer seek financial assistance from the city of Portland, it did qualify for federal dollars to cover up to one third of eligible capital costs through the 1603 Treasury Grant program.
Sacramento, California: High Solids Anaerobic Digester
As this issue of BioCycle went to press, developers were preparing to flip the switch on a new organic waste to energy project utilizing proprietary high solids anaerobic digester technology to convert separated organics into energy and soil amendments. The 3-stage High-Rate Digester (HRD) was developed by Ruihong Zhang, PhD, a professor in the Biological and Agricultural Engineering Department at University of California-Davis (UC Davis). It has the capability of digesting material containing up to 50 percent solids. Clean World Partners (CWP) was formed in 2009 to commercialize the new technology; the company was acquired by Synergex Ventures in January 2011. The digester is located at American River Packaging in Sacramento and is designed to process 7.5 tons of commercial food processing and retail food waste daily along with .5 tons of unrecyclable corrugated cardboard. The project broke ground on December 30 and began accepting and loading food waste in mid-March. “All of the mechanical and electrical equipment is built on skids and fabricated in our shop,” explains Synergex CEO Michele Wong. “Once we have all the permits in place, we can have the skids and components delivered to a site and be up and running in six to eight weeks.”
A feasibility study grant from the California Energy Commission and prior research and development funding from CalRecycle helped make the otherwise privately financed build-own-operate project possible. American River has a power purchase agreement with CWP and retains the option to purchase the digester outright for a set price. A local composter is processing the solids, and CWP is working with a handful of groups, including private companies and UC Davis, on pilot projects creating various soil amendments and fertilizer products in order to “identify the highest and best use of the effluent,” according to Wong. The biogas will power two C65 ICHP Capstone MicroTurbines to produce 1300 kWh/day of electricity, providing about 37 percent of the packaging plant’s power needs. Atlas Disposal will transport food waste from commercial clients, including Campbell’s Soup and retail grocery stores, and will pay CWP a tipping fee.
London, England: Famous AD Investors In Britain
The Prince of Wales and financier Jacob Rothschild are among a group of investors staking a total of more than 65 million pounds ($103 million) on Tamar Energy, a clean technology start-up which plans to build 40 anaerobic digestion (AD) plants that combined will be capable of delivering a total 100 MW of electricity when completed over the next five years. Other investors include Fajr Capital, the Duchy of Cornwall, supermarket chain J Sainsbury, Sustainable Technology Investments and Low Carbon Limited.
Sainsbury, which has adopted a zero-waste-to-landfill policy and is the country’s leading retail user of AD technology, plans to direct its suppliers to the new plants in order to further reduce the waste stream. “This investment shows there are great business opportunities in this technology, creating heat and power to run homes and businesses and reducing the amount of organic waste that would otherwise lie rotting in landfill,” said Caroline Spelman, the country’s Environment Secretary. The projects will add significantly to the United Kingdom’s total AD arsenal, which to date includes 214 plants producing around 170 MW.
St. Paul, Minnesota: State Funding For Ad Projects
Of three biomass projects in Minnesota recently receiving funding approval from the Minnesota Department of Agriculture (MDA), two are anaerobic digestion (AD) facilities. “These grants support the innovation, research and development in which companies are investing to help us get a step closer to the production of new biofuels,” said Dave Frederickson, chair of MDA’s Next Generation Energy Board. Renville Renewable Energy, LLC, will receive $220,000 to move into Phase 2 of a research project adjacent to a poultry facility in Renville. The project will begin codigesting agricultural and food production waste streams. The developer, Agri-Waste Energy, Inc. (AWE), recently finished its Phase 1 feasibility study (funded by a grant from the St. Paul Port Authority) and will begin Phase 2 work immediately, according to spokesman Ray Davy.
Jer-Lindy Dairy Farm in Brooten received a $137,000 grant to update its equipment. Jer-Lindy has been testing an anaerobic digestion system suitable for use on smaller farms. The venture was initiated by the Minnesota Project, a nonprofit focused on promoting renewable energy, local foods and sustainable agriculture. Jerry and Linda Jennissen’s farm is set on 240 areas, with 215 Holsteins producing around 3,000 gallons of manure daily. The farm has been producing electricity from biogas since May 2008.
Rosemont, Illinois: Sustainable Dairy Farmers Honored
Big Sky West Dairy in Gooding, Idaho, Brubaker Farms in Mount Joy, Pennsylvania, Werkhoven Dairy in Monroe, Washington, Blue Spruce Farms in Bridport, Vermont, and Holsum Dairies in Hilbert, Wisconsin, were honored in March at a White House ceremony recognizing their efforts in generating renewable energy while managing nutrients through anaerobic digestion (AD) technology. The inaugural U.S. Dairy Sustainability Awards were presented by the Innovation Center for U.S. Dairy (based in Rosemont), which has been working with the dairy industry to reduce its carbon footprint by 25 percent by 2020.
Several categories of awards were created. Winners of the Center for Advanced Energy Studies/Idaho National Laboratory Award for Outstanding Achievement in Energy have each created a new revenue stream while managing potential environmental problem for themselves and other local and regional institutions and businesses. At Big Sky, the DF-AP, LLC, project is a partnership between Dean Food Company and Ag Power Partners and funded entirely through the private sector. Manure combined with organic waste from a local retailer fuel a digester to produce 1.2 megawatts of electricity. At Brubaker Farms, AD — driven by both manure and institutional and commercial food waste — and photovoltaic solar combine to produce enough power to run the farm, with surplus sold back to the grid.
Winners of the Elanco Award for Outstanding Dairy Farm Sustainability have worked with their local communities to form lasting partnerships. Werkhoven Dairy, the Tulalip Tribe, Northwest Chinook Recovery and the Sno/Sky Ag Alliance (neighboring dairy and beef producers) formed a nonprofit and build a digester to process agricultural and industry food waste and produce green power for the region. Blue Spruce Farm was the first dairy to sign up for Central Vermont Public Service’s Cow Power program allowing consumers to purchase renewable energy generated on a dairy farm and has also implemented new technology to cut its energy use during milking by 60 percent.
Washington, DC: DC Waters Invests $4.1 Billion In Renewables
DC Waters recently signed an agreement with Pepco Energy Service, Inc., to build and operate a combined heat and power (CHP) plant at the 153-acre Blue Plains Advanced Wastewater Treatment Plant, which services approximately 725 square miles of Washington, D.C., Maryland and Virginia and processes an average of 370 million gallons/day of wastewater. The $81 million CHP project will produce at least 13 MW of power to supply the facility with about 30 percent of its energy needs. It is part of a larger $1.4 billion project that includes thermal hydrolysis technology, which utilizes high-pressure steam to increase the rate of biogas production while neutralizing contaminants in the waste stream.
“Although our current biosolids management approach — land application of Class B biosolids — is successful, we recognize that the future is somewhat tenuous, and to rely entirely on this option poses some level of risk,” says Chris Peot, Biosolids Division Manager for DC Waters. “In order to reduce risk and improve program sustainability, we chose a technology that reduces volume by converting half the organic matter to methane for energy and produces a Class A biosolids product with the other half. With a Class A product, we can continue to support agriculture and reclamation projects and produce soil products for use in LID [Low Impact Development] projects, tree planting, landscaping, etc. By treating to Class A levels, we can make use of this resource in the service area from which it is produced.” The upgrade comes with substantial cost savings as well. “There is no user rate impact from implementing this program, and in fact future rate increases will be less than if we did not do this project,” adds Peot. “This is very unusual with large wastewater projects, which are usually mandated and have no cost recovery component.