BioCycle January 2011, Vol. 52, No. 1, p. 49
Article examines factors that have led to widespread adoption of farm AD projects in Germany, contrasting those with realities in Australia.
DRIVERS influencing the decisions of farmers to invest in renewable energy technologies are strongly context-specific. With this in mind, it is interesting to contrast the example of Germany with various factors in Australia.
Interest in anaerobic digestion (AD) in Australia has never been higher, perhaps because of increasing regulatory, financial and climatic pressures faced by the agri-industrial sector. There are AD systems located at three dairy factories, at least 20 wastewater treatment plants, the Berrybank piggery in Victoria and a meat rendering plant in Queensland (see “Organics Recycling Down Under,” October 2010).
Germany has more than 4,300 farm-scale AD plants in operation. The government has ambitious plans to expand that number to about 10,000 to 12,000 to help meet a target of 30 percent renewable energy production by 2020. In addition to environmental drivers – Germany plans to cut greenhouse gas emissions by 40 percent by 2020 – energy security plays a huge role: The country imports over 60 percent of its energy needs. It produces less than 20 percent of its natural gas needs domestically, relying on imports from five countries (especially Russia) to cover for the shortfall. Nuclear power supplies 12 percent of Germany’s primary energy consumption, although public concern about nuclear safety remains high.
In comparison, energy security is less of a driver for Australia since it is a net energy exporter, exporting about two-thirds of its domestic energy production. Coal is Australia’s largest energy export earner, with a value of $AU 24 billion ($US 23 billion) in 2007-08, followed by crude oil and liquid natural gas. Victoria has enough brown coal to last 500 years, while the states of New South Wales and Queensland have enough black coal reserves to last over 100 years. As a result, Australia’s retail electricity prices are among the lowest in the world.
The German government has used a range of policy instruments to expand the renewable energy sector, including combinations of capital investment grants, soft loans and premium fixed prices for renewable energy. Its feed-in tariff law, for example, obliges utilities to buy electricity from producers of renewable energy at a premium price that is guaranteed for 20 years. This has been a very significant incentive to invest in AD infrastructure.
Australia’s response to cutting emissions and promoting investment in renewable energy is much more modest in comparison. The Federal Government is committed to “putting a price on carbon,” but it appears divided over the merits of an emissions trading scheme versus a carbon tax. In the Government’s previous term, legislation for an emissions trading scheme was not successful in gaining passage through Parliament. The Australian Government also has in place a renewable energy target (RET) scheme with the aim of achieving 20 percent electricity supply from renewables by 2020.
The German model of financial incentives is often viewed as a possible solution for promoting the renewable energy sector in Australia. Applying this approach uncritically to Australia is problematic since the two countries have very different energy security issues. In addition, it must also be recognized that the German model found favor in the agricultural sector because of the unique character of farming in the country, which has historically been dependent on agricultural subsidies and support programs. A decline in subsidies from the European Union prompted a search for alternative approaches to farming and additional means to diversify farm incomes. Bioenergy served this purpose to some extent.
Australian farmers receive fewer subsidies than any other farmers in the global Organization for Economic Cooperation and Development aside from New Zealand. Australian farmers are highly competitive and therefore have not experienced an economic crisis to the same degree as their counterparts in Germany. Although there has been consolidation in the number of farms in Australia and diversification of farm income has been the norm, farmers have not yet had the same incentives available to them to become energy producers on any large scale.
Agricultural Production Systems
Agricultural production systems in the European Union (EU) are well-suited to the efficient capture of manure slurry. Animals are typically housed in free-stall barns and fed a ration of grain and silage. As a result, biomass production based on the use of the manure slurry and bioenergy crops (e.g. maize for silage) in an on-farm AD system is complementary to intensive animal production in much of the EU. In contrast, animal production systems in Australia are largely pasture-based with the majority of farmers managing their pastures with intensive rotational grazing.
Effluent disposal methods have changed significantly in Australia over the last two decades, largely in response to environmental concerns and changes to regulations. A system of two or more ponds in series is typically used to treat dairy-shed and piggery effluent at a total solids (TS) content of less than one percent. In these systems, an anaerobic treatment pond is typically followed by facultative ponds that also are used for effluent storage. These ponds could be retrofitted with a floating cover to capture and potentially utilize biogas emissions, but even this option is usually considered to be cost-prohibitive in Australia. Feedlot manure, at 70 to 75 percent TS, is typically too dry for AD, and water for dilution is often scarce. Feedlot manure is also collected sporadically, which would limit potential biogas yields in a given AD system.
In contrast, manure slurries and effluents are more heavily regulated in most parts of the EU as a result of the Nitrates Directive (91/676/EEC). This has facilitated investment in AD systems in Germany since building tanks for the sole purpose of storing manure is cost-prohibitive. However, when an AD system is installed, farmers can earn valuable income from biogas and more easily comply with requirements of the Nitrates Directive for manure storage.
Prospects for Australia
Climatic changes and competition for resources (especially water) in the future could be a force for major land-use change in Australian agriculture. Supplementary feeding is now becoming increasingly common in the Australian dairy industry as a result of drought and reduced irrigation allocations, and we may see wider use of free-stall barns. Such land-use change could potentially remodel Australian farming systems to take advantage of newly emerging opportunities in bioenergy production.
Although AD has considerable potential for application in Australia, it is unlikely to be widely adopted unless new incentives emerge to strongly encourage investment. Stronger Australian regulation (e.g., of dairy effluent) may serve as an incentive to a limited extent in the future. Yet regulation on its own was not sufficient to force large numbers of German farmers to invest in AD systems – this only came about with the introduction of financial incentives such as investment grants, soft loans and fixed-price premiums for utilization of biogas.
Dr. Kevin Wilkinson is a Senior Research Scientist with Future Farming Systems Research Division in the Department of Primary Industries, Victoria, Australia (email@example.com).
January 25, 2011 | General
Development of On-Farm Anaerobic Digestion (Australia)
BioCycle January 2011, Vol. 52, No. 1, p. 49