November 22, 2006 | General

California Dairies Have More Anaerobic Funds

BioCycle November 2006, Vol. 47, No. 11, p. 40
Producers must be able to sell excess electricity and have markets for that power if projects are to be viable, says the CEO of Western United Resource Development.

APPLICATIONS are now available for funding construction of anaerobic digestion systems on California dairies. The California Energy Commission has funds of $2.3 million provided through the Dairy Power Production Program (DPPP). To date, the program has funded ten methane digester projects with an estimated generating capacity of 2.5 megawatts.
Development and construction of approved projects must be substantially underway by July 1, 2007 in order to receive funding. Target date for completing project installation and having systems capable of generating electricity is March 31, 2008. Funding is available through buydown grants that will cover up to 50 percent of the capital costs of a digester system, based on estimated power production, but not to exceed $2,000 per installed kilowatt.
Applications that are complete will be reviewed upon receipt. Grant funds will be awarded on a first-come, first-served basis to projects that pass technical due diligence review. It is anticipated that applications for funding will exceed the total amount of available funding, so applicants are urged to submit packets as early as possible. Applications can be downloaded from the Western United Resource Development (WURD) website –
Economics of dairy digesters should become more appealing if current negotiations between WURD and Pacific Gas and Electric (PG&E) over a draft power purchase agreement are successful. “Producers must be about to sell excess electricity and have markets for that power if these projects are to be viable in the future,” explains Michael Marsh, CEO of WURD. Currently, dairy biogas projects can be interconnected to the utility grid, with electrical producers receiving offsets of their utility bills for energy generated. However, producers are not paid for excess electricity. “Power purchase agreements could make methane digester projects much more economically viable for dairy producers,” predicts Marsh.
Objectives of the program include developing commercially proven biogas electricity systems that help dairies offset electricity purchases, and providing environmental benefits by reducing air and groundwater pollutants. The grant program is overseen by an advisory board that includes representatives from the California dairy industry, California Energy Commission, Department of Food and Agriculture, Water Resources Control Board, Sustainable Conservation, University of California, and the U.S. EPA AgSTAR Program. Projects that received DPPP funds that are now on-line include: Castelanelli Dairy; Hilarides Dairy; Joseph Gallo Farms; Meadowbrook; Straus Family Creamery; and Van Ommering Dairy. WURD was selected by the California Energy Commission to be the contractor for the program.
Two types of assistance were made available by the DPPP program: Buydown grants (described earlier), which cover a percentage of the capital costs of the proposed biogas system, and incentive payment grants for generated electricity. Electricity generation incentive payments are based on 5.7 cents per kilowatt-hour of electricity generated by the dairy biogas system, which totals the same amount of a buydown grant paid over five years. – J.G.

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