The Commonwealth of Pennsylvania is home to about 7,000 dairy farms with an average herd size of less than 100 cows. While nutrient and odor management are of great importance to these farms, their overall economic viability appears to be the primary factor driving installation of anaerobic digesters over the past few years. “Pennsylvania has 30 dairy digesters and about 5 swine digesters right now,” says John Frey, Executive Director of the Center for Dairy Excellence (CDE), a nonprofit initiated in 2004 by the Pennsylvania Department of Agriculture to enhance the profitability of the dairy industry. “About 10 of those digesters have been installed since 2010, and about another dozen were installed between 2006 and 2009.”
Historically, adoption of anaerobic digestion technology by the state’s dairy and swine farmers was driven primarily by odor management, notes Jay Howes, Deputy Secretary for Consumer Protection, Regulatory Affairs, and Dairy Industry Relations at the Pennsylvania Department of Agriculture (PDA). “One of the first digesters in the state was installed by Harlen Keener, a swine and dairy farmer on the outskirts of Lancaster, in the late 1970s. I remember him pointing to the skyline of Lancaster and saying, ‘this digester is the price of me being in business in this location.’”
While passage of the country’s first Nutrient Management Act in 1993 was a contributing factor to digester development in Pennsylvania, availability of financing from the state as well as the federal government has been the key contributor to installing systems over the past decade. These include loans and tax credits from U.S. Department of Agriculture’s REAP (Rural Energy for America Program) initiative, the stimulus dollars in the form of U.S. Treasury grants, and state financial assistance available through PennVest, the Commonwealth Financing Authority (CFA), Department of Environmental Protection and other entities. The financial support has made it possible for dairy and swine farms to build digesters.

“The CFA within the Department of Community Economic Development has grant funding and low interest loans available,” explains Frey. “The Board of the CFA has had favorable impressions of anaerobic digestion technology. It provides grants for up to 33 percent of capital costs up to a certain level, and about 33 percent cost coverage through low-interest financing. The CFA is funded through bond sales.”

Dairy Power Stakeholders Group

About two years ago, the CDE created the Pennsylvania Dairy Power Stakeholders group, which includes dairy producers with operating anaerobic digesters, and representatives from various state agencies, public utility companies, service providers and the Public Utility Commission. Facilitating implementation of on-farm biogas production to support the future profitability and viability of the state’s dairy industry and enhance its competitiveness is among the key points of agreement among stakeholders. Another key factor is use of digesters to control manure odors and enhance nutrient reduction, creating the ability for livestock operations to coexist with urban population centers.
“In addition to agreeing that AD plays a potential role in the future profitability of the state’s dairy industry, the group also agreed that the advancement and adoption of AD technology on dairy farms will require a commitment to the development and enhancement of a world-class Pennsylvania technical services and support infrastructure, explains Frey. “We also agreed that dairy-generated electrical power should be viewed as another locally produced Pennsylvania farm product and represents a potentially premium product for environmentally conscious markets.”
Identified barriers to adoption of AD by the state’s dairy industry include a lack of information and knowledge for dairy producers and advisors on the processes to plan, design, construct, implement and permit systems; need for capital costs to be subsidized by loans and grants to be economical; and lack of an ag-friendly permitting process for receiving off-farm substrates such as food waste. “A direct outcome of this group’s discussion was working with the Pennsylvania Department of Environmental Protection last year on a general permit for farm digesters to receive food waste and other energy-rich substrates,” says Howes (see sidebar). “From PDA’s standpoint, we would like to be able to facilitate solutions so we are not tripping over conflicting regulations. This is something that our department will continue to monitor and be of assistance. I think we will see more of that type of collaboration on rules and permits between state agencies and other stakeholders as the push continues to get food waste out of the landfill.”
To address the barrier related to a lack of knowledge for dairy farms to move ahead with projects, CDE is using a USDA grant awarded to the Center in 2010 to establish 10 “Dairy Transformation Farms.” Selected farms were already contemplating a transformational dairy business project and agreed to assemble a team of experts to help them navigate the process. Project areas included renewable energy. “Each transformation didn’t need to include a bioenergy or renewable energy component, but about half of them did,” explains Frey. “For example, one participating farm — owned by Clifford and Andrea Sensenig in Lancaster County — installed a digester that receives manure from their 100 dairy cows, along with an uncle’s 130 dairy cows and Cliff’s brother’s 200 hogs and 30,000 layer hens. Manure from the other two farms is piped underground to the methane digester on the Sensenig property.” CDE has documented their process of digester implementation; the information is available on the center’s website (www.centerfordairyexcellence.org). Plans are to have all “transformation case studies” catalogued on the CDE website by mid 2014.
More recently, the Dairy Power Stakeholders group partnered with a group of industry and nongovernmental organizations, including the Chesapeake Bay Commission, to conduct a research project to evaluate the pre and post digestion nutrient content of the manure. “The testing will be done on 10 dairy farms in Pennsylvania with digesters,” says Frey. “Nutrients will be measured pre and post digestion in liquids and solids. Some soil testing will be done as well.” Howes acknowledged that research should also be conducted on the effect that codigestion with food waste may have on the nutrient content of the digestate and effluent post digestion — and thus on the farm’s nutrient management plan. “That will be an interesting discussion to have going forward,” he notes, “and may be an unintended consequence of increasing biogas production by adding these substrates.”

Biogas Markets

Most of the operating farm digesters in Pennsylvania have engine generators to utilize biogas to produce electricity and heat. According to a 15-year schedule established by the state, electric distribution companies and electric generation suppliers are mandated to have certain minimum thresholds of renewable energy resources. For example, energy derived from solar photovoltaic energy, wind, hydro and biogas units must comprise 4.5 percent of the total electric sales during the upcoming June 1, 2013 – May 31, 2014 time period, explains George Beam, Senior Engineer-Regulatory Compliance with PPL Electric Utilities. Today, biogas generators in PPL Electric’s territory contribute more than 14 MW toward this goal.
“PPL Electric Utilities has interconnected with 14 biogas units,” says Beam, adding that these units are at farms, landfills and wastewater treatment facilities. “The farms are interconnected with a net metering system using a bidirectional meter. Any power the farm produces that is not utilized on site is supplied to PPL Electric Utilities’ grid.”
To qualify for a net metering interconnection, renewable energy producers start by completing an application on PPL Electric’s website. The application is reviewed, starting with assessing the size of the unit generating the power and determining the adequacy of the line to interconnect the generator. “For larger projects, we evaluate the application to determine if system reinforcements are needed,” explains Beam. “Next, our engineering department reviews the service requirements to ensure that the interconnected system will operate in a reliable manner.” The final step in the approval process is an actual inspection, known as the Certificate of Completion, of the interconnection facility to assure the system is safe to operate.
Once those three steps are completed, an account is set up to track monthly exports and imports of power, e.g., a farm may generate excess power some months, and need to utilize some of those “banked” kilowatt hours another month, adds Beam. PPL Electric is part of the PJM Interconnection LLC (PJM), a regional transmission organization in the Eastern (U.S.) Interconnection grid. This energy is monitored within a one-year cycle, which starts in June and ends the following May.
“May is when the PPL Electric customers can cash out the kilowatt hours that have been accumulated,” he explains. “Our price (cents/kWh) is based on a ‘price to compare,’ which is what the generator is paying for its load as a PPL nonshopping customer. For example, the current price to compare for residential power is 7.237 cents/kWh. That is the value during the cash out period that will be used for the customer. If the generator falls into a different customer category, they can go on our website to determine the current price to compare.”
In terms of possible interconnect challenges to farm digester power generators in PPL Electric’s service area, they typically are related to size of the engine installed (i.e., total nameplate kW), distance from the substation, size of the conductor, is it single phase or three phase, and if the lines are already heavily loaded. “Each installation is unique,” notes Beam.
Looking to the future of farm digesters in Pennsylvania, Frey and Howes emphasize that attention needs to be focused on servicing the needs of smaller dairies in the state, e.g., with 100 to 200 cows. “In general, our dairy farms are smaller and any digester technology that can be economical at a smaller scale would be ideal for Pennsylvania’s dairy industry,” concludes Frey. “The margins of dairy farming are increasingly volatile, and CDE focuses many of its initiatives at improving profitability. Anaerobic digesters are of interest to our dairy farms if they can provide supplemental revenue.”