BioCycle May 2010, Vol. 51, No. 5, p. 49
Anaerobic digestion projects are a great opportunity for the food and beverage market to recycle their food waste streams to create renewable energy as well as other beneficial by-products.
Sara Martin and Paul Greene
A SIGNIFICANT portion of the food waste stream still making its way to landfills is created through food production and processing activities. This portion is easier to target for renewable energy projects as there are typically larger quantities of food waste available in a centralized location.
Because of more stringent processing and sanitation requirements, the volume of food production and processing waste has increased in recent years. Disposal can be difficult for food processors due to rising hauling costs, as well as more stringent practices for animal feed and land application. Unfortunately, many food processors still landfill food waste if this is the most economical disposal available.
At the same time, rising wastewater surcharges, utility costs and consumer pressure for products to be “green” are leading food processors to pursue on-site anaerobic treatment and energy recovery as an option for food waste. Another trend is forming partnerships with other food producers and/or with local municipalities to provide mutually beneficial codigestion opportunities, utilizing existing or new anaerobic digester infrastructure.
Anaerobic digestion (AD) has typically been utilized by the food and beverage industry for wastewater treatment and/or pretreatment purposes, as opposed to solid waste disposal and alternative energy production. Applications have been primarily limited to the following: High rate technologies for liquid carbohydrate wastes with low solids; Lagoon type applications for higher solid wastes where land is available; and medium rate conventional mixed technologies for wastes containing fats, oils, greases and moderate solids. The high-rate technologies are the most common application of the three listed.
High solids anaerobic digestion (>10-15% solids) is relatively new to the United States and the food and beverage market. This is mostly because the economic drivers have not been present in the past to support development of the technology. In contrast, Europe has been practicing high solids digestion for years. The primary driver has been the ban on organic waste disposal to landfill and land application as well as preferential prices paid for the generated energy. These European technologies are now being introduced to the U.S. market.
Since it is not part of most food producers’ core business to own or operate AD facilities, opportunities are mostly being pursued as design-build-own-operate (DBOO) projects by developers, with the main goal of reducing overall operating costs to produce food. Manufacturers are being solicited by developers and/or technology providers to initiate AD projects. In turn, they are contracting with consultants to conduct independent feasibility studies and technology reviews to evaluate the variety of processes available. This article provides an overview of two recent feasibility studies performed by O’Brien & Gere Engineers.
LARGE FOOD CONGLOMERATE
This first case study is included to detail critical factors that make on-site AD feasible at one facility location versus another, as well as provide insight on how to identify those opportunities with the most potential. A large food conglomerate with over 50 North American production plants requested assistance to help create a business plan for implementation of AD waste to energy projects. The goal of the business plan was to reduce operating costs and provide a 10 percent overall corporate renewable energy offset.
The company had already implemented two successful DBOO projects utilizing high-rate anaerobic technologies and wanted to pursue more if economically feasible at other plants. This company was being pursued by many European and North American technology providers and was having difficulty sorting through both the individual plant and vendor information to decide which plants and technologies made sense financially.
O’Brien & Gere had worked with this company on other water and energy sustainability projects, and had been the design-build firm for the two existing waste to energy facilities. The firm was retained to develop a plan to identify the top opportunities within the production plants, as well as type of technology to pursue.
Existing information for each of the individual plants was collected and utilized to develop a model to estimate potential energy production and overall cost offsets at each plant. The data collected included: Total waste quantities and types; Cost (or revenue) to dispose; Current utility usage and cost; and Current wastewater disposal costs.
Waste quantities were further characterized at each plant per major substrate category – fats, bakery waste, dairy, meat, etc. Utilizing published empirical data, biomethane potential (BMP) was estimated for each type of major substrate category. A model was developed to estimate the potential energy from each type of waste produced; total energy potential per plant utilizing anaerobic technology was quantified. If applicable, “clusters” of plants within a 25 to 50 mile radius were also evaluated to determine if there may be a synergistic AD opportunity between plants.
A ranking matrix was developed to identify the top opportunities based upon highest cost offset potential (waste disposal, utility offset, avoided surcharges, etc.). Budgetary capital and operating cost estimates for top opportunities were quantified. A preliminary economic pro forma with internal rate of return (IRR), year one savings, and life cycle costs for the top opportunities was prepared.
The following cost offset potential was recognized: Combined heat and power (CHP) offset of up to 11 percent, meeting corporate goal of 10 percent alternative and renewable energy; Year one savings of $6.4 million in operating costs across all plants; Life cycle savings of up to $89.1 million over 10 years across all plants; and Carbon emission offset of up to 1,500 tons/year. The ranking reduced a total of 55 plants down to the 10 most feasible. The next phase of this project will further refine the technology, project requirements and associated costs for the 10 most feasible plants.
CODIGESTION – YOGURT PRODUCER AND WWTP
This second case study has been included to provide detail about some synergies that can be found between food producers and municipalities to create potential renewable energy projects – in this instance, a local municipality and a yogurt producer.
The yogurt facility discharges wastewater to the municipal wastewater treatment plant (WWTP); its discharge comprises most of the WWTP’s organic loading capacity. The treatment plant is operating at its maximum organic loading capacity and cannot accept additional wastewater from the yogurt producer. The yogurt production facility pays for the most of operating costs at the municipal WWTP through surcharge fees.
In addition, a high strength yogurt waste stream is being hauled away for animal feed. The cost to dispose this waste has increased over the years and an alternative method has not been identified. Recently this food manufacturer reached its maximum production capacity, as waste and wastewater disposal costs (approximately $1.2 million annually and projected to increase) have become limiting factors to profitability and the potential for expansion.
Treating this organic load also results in elevated electrical and biosolids disposal costs. At the same time, the municipality has a vested interest in helping the yogurt facility achieve its production expansion to create additional jobs and opportunity in this region.
To solve the problem, the yogurt producer and municipality teamed up to try to identify an anaerobic renewable energy solution that would be synergistic to both parties. Because this project is located in a state with incentives for economic development and alternative energy production, the manufacturer and municipality also teamed up with the state’s Economic Development Authority and Department of Agriculture.
Phase One of the project assessed the economic viability. The initial findings include:
• Convert the WWTP’s existing aerobic digester to an anaerobic digester for codigestion of municipal solids and yogurt waste to generate biogas.
• Use the biogas in a CHP process, utilizing the electricity and heat on-site to power equipment and heat buildings, as well as the digester. Depending on the final outlet for digestate solids, the waste heat may also be utilized to dry these solids to a lower moisture level.
The digester would have capacity to accept an additional 1,000 gallons/day of fats, oils and greases (FOG) and/or waste glycerin from biodiesel manufacturing. These additional feedstocks would boost biogas production. The state Department of Agriculture has helped to identify potential sources.
There is also potential that a higher rate anaerobic digester can be added to the overall anaerobic process to accept the wastewater from the yogurt facility as well as the liquid portion of the digestate from anaerobic treatment. This will produce additional biogas and decrease the organic loading to the WWTP from the yogurt facility and the residual digestate liquid fraction – and may enable the yogurt facility to discharge additional wastewater to the treatment plant, creating the opportunity for expansion.
A commercial composting facility that is interested in joining the team to provide an economically viable option for the biosolids has been identified. The codigestion solids are more appealing to the composter than just municipal solids as the addition of the food wastes may increase the nitrogen-phosphorus-potassium (NPK) content in the compost, making it more valuable.
By teaming with the municipality, the overall project may be eligible for low interest funding and grants. Partnering with the local economic development agency will be critical to identify and obtain these opportunities. The codigestion of municipal solids and yogurt waste has the potential to save both parties over $500,000/year in disposal costs as well as generate additional revenue from tipping fees.
There is potential for 300 to 500 kW of electrical generation with 40 to 60 MMBTU/day of residual heat. This electrical generation, in addition to the reduction in aerobic capacity associated with the current practice of aerobic sludge digestion, has the potential to save the municipal WWTP up to $300,000 in electric and natural gas costs. The WWTP’s savings for solids disposal and energy costs will in return save the yogurt manufacturer money, as most of the treatment plant’s operating costs are currently covered by the yogurt manufacturer through wastewater discharge surcharge fees.
This project is still in the initial development and approval phase; however it shows high potential with the grant money available in addition to low interest funding and tax incentives. The next phase will be to further refine costs and energy potential through testing activities and further site development, including identification of additional grants and funding opportunities.
IMPACT ON INDUSTRY DECISIONS
Points from the above case studies and recent experiences further emphasize the factors that are critical to the successful implementation of renewable energy projects in the food and beverage industry. The most important is to adequately characterize the food waste substrate, namely: Waste material quantities including variability and future changes in production; Waste characteristics including quantifying of cellulose, inert material and packaging fraction; Energy yield and stability of anaerobic process via BMP testing and/or bench-scale testing; and Presence of inhibitory substances that can be toxic to the anaerobic microorganisms.
It is also critical to understand the project drivers and influences crucial to economical feasibility and project viability. These include: High food waste disposal costs; High utility costs; High wastewater disposal and surcharge costs; Sufficient biogas yield associated with quantity of waste and/or energy potential; Other environmental drivers such as landfill and/or land application bans; Instability of current animal feed practice; Potential for production expansion with additional waste and/or wastewater disposal capacity; “Clusters” of food plants where there may be synergy in a regional digester.
The potential AD energy project does not necessarily need to have all these drivers and influences to be economically feasible. Typically however, the more of these factors on the list, the higher the potential for a project.
Anaerobic projects do not typically fall within the project approval requirements in the food and beverage market, which predominantly require a payback of three years, or greater than a 30 percent return on investment. It is critical for the food and beverage market to modify these requirements and review these projects for long-term savings and sustainability.
This industry also needs to project out the long-term stability of project drivers and influences to verify that these will be in place over the life cycle of the project. Operations at food and beverage plants tend to be highly variable; product lines can be changed or removed, food waste disposal costs can become revenue (a profitable outlet may arise such as a by-product for other food manufacture or animal feed). For instance, if one of the critical factors for an AD energy project to be successful has a high risk to be removed in the future, the economics should be run without that factor. This will help guarantee the project will still be viable and sustainable over the life cycle of the project.
The increasing trend in partnerships with local municipalities for codigestion typically need to have the following drivers in addition to the economic drivers outlined above: Grant opportunities, low interest funding or tax incentives; Additional substrates and tipping fees at a reduced cost to the disposer; Beneficial use for the waste heat from CHP processes on-site; and Viable and economical outlet for the digestate liquid and solid fraction.
When adding food waste, project developers need to make sure that downstream processes can handle the additional loading (organic and nutrient) that the liquid fraction of the digestate may have on downstream treatment processes and/or find another beneficial outlet for this material. Research is being done to economically concentrate the nutrient fraction in the digestate to create a beneficial fertilizer product. The success of this research will be critical for codigestion opportunities.
In summary, AD waste to energy projects are a great opportunity for the food and beverage market to recycle food waste to create renewable energy as well as other beneficial by-products – and to make their impact on the sustainability of the environment. However, these projects do not always make economical sense unless the critical factors and influences are present. The upfront feasibility work outlined in this article should be performed for the complete life cycle of the project to guarantee its success and long-term economical viability.
Sara Martin, P.E. is a Project Associate, specializing in the food and beverage industry, and Paul Greene is Vice-President and Waste-to-Energy Practice Leader, with O’Brien & Gere Engineers (www.obg.com).