Digesting Change in the Biogas Sector
The biogas sector is transforming and expanding its market presence by diversifying acceptable feedstocks and the types energy products that it generates. In the upcoming July issue of Biomass Magazine, the quarterly Biomass Construction Update celebrates the completion of two food waste digesters, FCPC Renewable Generation by Symbiont and UC Davis Renewable Energy Anaerobic Digestion by CleanWorld. The two commercially operating digesters are receiving pre-consumer and post-consumer food waste along with agriculture waste to generate electricity, heat, and transportation fuel. The ability of Symbiont and CleanWorld’s recent installations to accept a range of feedstocks, coupled with their ability to produce a variety of energy products, imparts elasticity on the front and back end of these biogas units and instills market resiliency that any financial planner would deem wise.
In the past, biogas project development and deployment predominantly occurred on confined animal operations and sewage treatment plants where the biogas was used to generate electricity. At the beginning of the decade, Fair Oaks Dairy in Indiana along with their many partners were the first in the U.S. to use biogas on a broad scale as a transportation fuel, replacing 1.5 million gallons of diesel a year. At a $2 per gallon (diesel equivalent) cost savings, Fair Oaks and their partners are saving $2 million a year by fueling the trucks used to haul their milk. Fair Oaks does have electricity generating capacity at the dairy, but at a $0.03/kWh buy back rate by the local utility, the high cost of transportation fuel leads Fair Oaks and their partners to prefer filling the fuel tanks of dairy trucks with biogas rather than spinning a dynamo in a genset.
Despite the higher capital cost of gas cleaning equipment, a filling station, and trucks that run on natural gas (biogas and natural gas are molecularly the same and completely fungible), activity in the biogas sector indicates that the market is swaying towards transportation fuel development, particularly where electricity is realtively cheap. George DeRuyter & Sons Dairy in Yakima County, Washington is converting their digester, which was installed in 2006, from only generating electricity to one that cleans the gas for pipeline injection or use as a transportation fuel. Once completed, the dairy will have a capacity to replace 4,300 gallons of diesel a day and generate revenue for DeRuyter. “My biggest thing is, if we can improve what we are doing and not lose money, that’s a benefit,” he is quoted as saying in the linked article.
The diversification of feedstocks is a more recent development for the biogas sector than that of the energy products. The notable accomplishments by Symbiont and CleanWorld in scaling food waste digesters indicates that waste processing technology has matured sufficiently for commercial application. Whereas manure is a consistent product with few contaminants (plastic, metal, & other non-digestible products), food waste is the opposite and often contains a considerable amount of contaminants. The preprocessing of food waste, particularly post-consumer waste, is a vital step to making an acceptable feedstock to add to a digester.
There has long been a demand to remove food waste from MSW. The decreasing capacity of landfills and the EPA’s reluctance to permit the construction of new landfills has driven innovation around food waste preprocessing to a point that now makes it deployable on a commercial scale. This has encouraged local and state governments to enact policy that diverts food waste from landfills. Vermont has enacted a mandatory food waste diversion program that will keep food waste from grocery stores, restaurants, food processors, and households out landfills by 2020. As the squeeze on landfill capacity will only increase, more municipalities, states, and regions will follow Vermont’s lead and require food waste diversion.
To what extent the biogas sector fits into the context of food waste diversion in MSW is unknown. Luckily, biogas is a highly maliable energy product with proven capacities in the power, transportation, and thermal sectors. Biogas development also has the benefit of supporting waste management strategies that maximize the life of landfills, reduce odor, and minimize the climate impact from organic waste emissions. The biogas sector is currently an animated market with significant capacity for growth of new projects and expanding upon existing infrastructures. DataPoints and the quarterly Biomass Construction Update will closely follow the sector’s growth.
I welcome your comments on where and how you see the biogas sector growing over the next 10 years.