Conference presenters at BioCycle REFOR17 in Portland, Oregon discussed policies, trends and opportunities in the agricultural digester sector.
BioCycle December 2017
Strategies to advance anaerobic digester developments were discussed and brainstormed in many sessions at BioCycle’s 17th Annual Conference on Renewable Energy From Organics Recycling (BioCycle REFOR17) in Portland, Oregon in October. Several focused on the agricultural digester sector, including a national overview presented by Nick Elger, U.S. EPA AgSTAR Program Manager, and a West Coast state overview presented by Jenny Lester Moffitt, Deputy Secretary of the California Department of Food and Agriculture (CDFA).
AgSTAR is a voluntary program, sponsored by EPA and the U.S. Department of Agriculture, to advance economically and environmentally sound livestock manure management. It works with industry, government, nongovernmental organizations and university stakeholders. In his presentation, “Farm Digestion Trends, Successes In The U.S.,” Elger began with the latest AgSTAR data on livestock manure digester projects in the U.S. — a total of 249 facilities processing dairy, swine, poultry and/or beef manure. “Overall, we are seeing a slowdown in new livestock manure digester project development on an annual basis,” noted Elger (Figure 1). “One factor could be a correlation to the lower price of natural gas (Figure 2). Other factors that create challenges are low milk prices, interconnection hurdles, and market and policy uncertainties.”
Elger presented several case studies to highlight project and end market opportunities. One is use of a third party model for project development, illustrated by Bar-Way Farms in Deerfield, Massachusetts. The facility is financed, owned, operated and maintained by Vanguard Renewables. Built in 2016, the 660,000-gallon capacity digester system manages manure from 250 cows milked daily. Annual digester inputs include 9,200 tons of manure and 30,000 tons of food waste. Annual energy output is 7,700 MWh, with a daily offset of 5,500 lbs of carbon dioxide emissions.
Examples of end market opportunities include Freund Farm in East Canaan, Connecticut, a small family-owned farm with 300 dairy cows feeding a horizontal plug flow digester and, at the other end of the size spectrum, Prairie’s Edge Dairy in Fair Oaks, Indiana, comprised of 12 family-run dairies with a total of 12,000 dairy cows feeding a horizontal plug flow digester. Freund Farm utilizes its digested manure solids to manufacture Cow Pots, which are biodegradable planters and displace peat moss and plastic planters.
Prairie’s Edge was among the first on-farm anaerobic digesters in the U.S. to upgrade it biogas into compressed renewable natural gas (RNG) vehicle fuel, which is used for its fleet of 42 tractor-trailers hauling milk to processing facilities. The RNG displaces about 2 million gallons of diesel fuel annually.
In her presentation, “Policies and Incentives To Advance AD in California,” Lester Moffitt of CDFA opened with some key dairy industry statistics:
• California is the #1 dairy state in the U.S., producing 20 percent of the nation’s milk. There are 1.7 million milking cows on 1,400 dairies, with an average herd size of 1,215.
• SB 1383, signed into law by Gov. Jerry Brown in September 2016, requires a reduction in dairy and livestock methane emissions (short-lived climate pollutants) by 40 percent from 2013 levels by 2030.
• Approximately 91 percent of the state’s dairy cows and more than 80 percent of dairies are in the Central Valley (primarily freestall barns with flush systems or drylots); 5.6 percent are in southern California (primarily on drylots), and 3 percent are in the North Coast region (primarily on pasture).
About a dozen dairy manure digesters are operating in California. CDFA’s Dairy Digester Research and Development Program provides financial assistance for installation of dairy digesters in the state. Grants are for a maximum of 50 percent of the total project cost, up to $3 million. In 2017, the agency received $99 million from the Greenhouse Gas Reduction Fund for methane emissions reductions from dairy and livestock operations. About 65 to 80 percent is being allocated to support digesters. The remainder of the funding appropriation will incentivize development of nondigester practices, e.g., switching to scrape or solid manure management and composting, through CDFA’s Alternative Manure Management Program.
In late October 2017, CDFA announced $35 million in grants to build 18 new dairy digesters. All the facilities funded in this latest round will process manure only, utilize covered lagoon digester systems, and upgrade the biogas to RNG for pipeline injection. One of the funded projects is a dairy cluster in Kern County that already has one digester built, and two in construction. The cluster includes 15 large dairies, with capacity to generate 5 million diesel gallon equivalents of compressed RNG.
Lester Moffitt discussed the pluses and minuses of utilizing biogas for electricity versus compressed RNG fuel. “On the electricity generation side, developers are more experienced, and the combined value of the electricity and carbon credit is about $20/MMBTU,” she explained. “Digesters producing electricity less than 3 MW in size are eligible for the California Public Utility Commissions Bioenergy Market Adjusting Tariff (BioMAT), a fixed price standard contract feed-in tariff program. However, with electricity generation, concerns exist with nitrogen oxide (NOx) emissions. On the compressed RNG side, this market is new in California but proven elsewhere. The approximate value is $40 to $60/MMBTU from sale of renewable fuel credits, which is potentially very lucrative. The NOx concerns are addressed, but on the minus side, no long term contracts for the fuel are available at this time.”