BioCycle September 2010, Vol. 51, No. 9, p. 52
Great Plains Institute’s report suggests a suite of public policy options to grow the biogas industry in the Midwest.
A NEW resource – Spotlight on Biogas: Policies for Utilization and Deployment in the Midwest – is available for producers, industry officials and government leaders to help scale up biogas production and utilization in the midwestern United States. Those active in the biogas industry are well aware of the multiple environmental and economic benefits created by biogas projects, including economic development, renewable energy production and avoided greenhouse gas emissions, but currently public policy is a major limiting factor for increasing growth in this sector. Spotlight on Biogas, released in August by The Great Plains Institute (GPI), is a tool to build support for public policy mechanisms aimed at increasing biogas project development in the Midwest. Many of the suggestions apply to other regions, and the nation as a whole.
Biogas feedstocks in the Midwest are abundant and include manure, crop residues and a variety of wastes from food processing (particularly milk processing waste), wastewater treatment, biomass processing (such as ethanol stillage or biodiesel glycerol), fats, oils and greases. The biogas produced can be converted into reliable forms of renewable energy such as electricity, combined heat and power, natural gas replacement and vehicle fuel. Versatile utilization options and the technology’s ability to provide a steady and reliable stream of gas make biogas-to-energy projects a powerful tool in the renewable energy toolkit.
The report’s purpose is twofold: to provide an overview of the current policy environment that supports biogas project development, and to examine additional policy mechanisms and reforms to current policies that could provide a framework for the increased development of biogas projects. While there are many technologies, both new and emerging, to produce biogas, this report mainly focuses on anaerobic digestion, either at the farm or industrial scale, with an emphasis on agricultural feedstocks (manure, crop residues and food processing by-products). Landfill gas and wastewater treatment projects are included in the report, but are not the main focus.
DEPLOYMENT IN THE MIDWEST
Other countries are gaining value from producing natural gas substitutes for transportation, heat and other purposes. Based on operational experience abroad, the Midwest could produce more biogas from combining multiple organic feedstocks in the same system and developing centralized biogas plants. Such new production models would be instrumental in expanding biogas production beyond the large livestock facilities, where the technology has been most utilized.
To achieve its full potential, the industry needs to get past the conventional wisdom that biogas is mainly for electricity production, and that one of the only business models is on-farm digesters. The GPI report underscores that biogas has many uses beyond electricity, and the industry is only beginning to develop third-party management options that would relieve farmers from the burden of running their own energy facility. On its present course, biogas-to-energy projects will struggle to grow.
As the biogas industry has developed over the past several years, the number of experts working in the field has also grown. To gain a richer understanding of existing successful policies and those that could be implemented to further help develop the industry, informal discussions took place with a diverse group of industry stakeholders from January to May 2010. (The list of participating stakeholders is in the acknowledgements section of the report.) These stakeholders have experience developing and implementing individual projects, advancing policy at the federal or state level, analyzing the current industry and developing technical and policy solutions to grow the industry.
BIOGAS POLICIES FOR CONSIDERATION
Five categories were developed to organize stakeholder policy recommendations included in the Biogas Policies for Consideration section of the report. The categories and examples of policies from each are:
Existing Policies That Are Best In Class: Policies referenced by a majority of stakeholders as successful examples were placed in this category. While successful, additional changes could make these programs even more effective. For example, the Rural Energy for America Program (REAP), referenced in several conversations as one of the most successful programs for building biogas projects, could be modified to structure grants to cover project costs over time and not just the upfront capital costs. State-level grant programs such as the Wisconsin Focus on Energy anaerobic digester grant program is another example of a successful program to incentivize biogas projects, one that other states could offer as funding allows.
Existing Policies That Just Need A Tweak: Current policies where a change was recommended were placed in this category. Suggested changes were made in the spirit of improving the effectiveness of a policy for biogas projects. State-level Renewable Portfolio Standards (RPS) could be modified by adding a resource carve out for existing or new RPS policies, allowing renewable natural gas projects to count towards the RPS, setting higher percentage targets and adding enforcement mechanisms. Stakeholders also had suggestions for modifying policies such as net metering provisions, standard interconnection agreements and the U.S. Department of Treasury Section 1603 grant program.
Proposed Policies That Just Need A Push: Currently proposed policies at the state or federal level that have not been passed were placed in this category. Some have seen several attempts at passage at the federal or state level or have received previous policy debate. Examples include
S. 306, the Biogas Production Incentive Act, a federal cap on carbon emissions and an investment tax credit for biomethane projects.
Promising New Policies That Need A Champion: All new policy ideas not currently proposed as a formal piece of legislation or that have not had multiple attempts towards passage were placed this category. Feed-in Tariffs (FITs) or Advanced Renewable Tariffs (ARTs) were referenced by a majority of stakeholders as either a potentially promising or a problematic policy for agricultural-based and industrial and municipal projects. Other policies in need of a legislative champion include green pricing programs for natural gas, tradable tax credits, and a national or state nutrient trading program.
Other Ideas: Stakeholder recommendations that do not require or were not ready for legislative or regulatory action were placed in this category. Creative ideas put forward included offering carbon credit certification assistance through livestock organizations or farmer cooperatives, integration of existing USDA programs, developing model solid waste regulations for waste-to-energy facilities and standard gas quality specifications and pipeline injection best practices.
Model state-level policies that could be replicated in other states to increase biogas development and emerging industry trends outside of the policy arena that hold potential to drive the industry are discussed in the report’s policy section. One example is Iowa’s Program Implementation Guideline (PIG), which streamlines the permitting process for waste-to-energy facilities. Industry trends that could have an impact (positive or a negative, depending on regulatory burdens) on the biogas industry could be tightening nitrogen oxide (NOx) emission regulations or Confined Animal Feeding Operations (CAFOs) regulations, and Walmart’s Sustainability 360 Initiative (which could be favorable to livestock producers involved with biogas projects).
The policies, regulatory actions and ideas presented are solely a starting point for additional discussion and should be considered high-level recommendations. None of the recommendations presented are final and all need additional discussion on specific mechanisms or language required to actually implement them.
LEVELING THE PLAYING FIELD
A common theme expressed by almost all 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 utilization options. Private financing from traditional lenders is an obstacle to bringing projects online, and a reality that future biogas incentives must take into account. The right policy environment should provide the right 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 also includes highlights of innovative operating projects that showcase the many possibilities to produce and utilize biogas in the Midwest. The highlights include on-farm, industrial and municipal projects in addition to profiling the many uses for biogas from electrical production to transportation fuel.
Biogas-related energy represents only a fraction of total Midwestern renewable energy production. Despite its enormous potential, biogas project development has been limited due to the lack of a supportive public policy infrastructure. A deeper, more focused dialogue is needed in the Midwest to determine a comprehensive strategy to capture more energy from agricultural feedstocks and by-products. This report is only the first step in what the Great Plains Institute hopes will be a comprehensive policy process that allows Midwestern biogas development to step into the spotlight and become a part of our energy future.
Amanda Bilek is an Energy Policy Specialist with the Great Plains Institute in Minneapolis, Minnesota. Electronic copies of “Spotlight On Biogas” are available on the Great Plains Institute website at www.gpisd.net.
September 21, 2010 | General
Accelerating Deployment Of Biogas Production And Utilization
BioCycle September 2010, Vol. 51, No. 9, p. 52