ENER-G biogas CHP improves ROI of small-scale U.K. AD projects

By ENER-G | April 29, 2015

ENER-G has turned up the heat on the anaerobic digestion market by launching a new sub 200 kWth combined-heat-and-power (CHP) unit that maximizes financial returns on both the highest rate renewable heat incentive (RHI) and feed in tariffs (FIT).

This will help to stem the shortfall from FIT digression following the 20 percent reduction in FIT rates last year and ongoing tariff reductions. ENER-G says that its new biogas CHP technology makes small scale anaerobic digestion viable for a wider customer base, particularly smaller farms and dairies, as well as industrial processors.

The new ENER-G E200 biogas CHP unit provides a thermal output of 195 kWth (qualifying for the highest rate RHI of 7.5p per kWth), together with an electrical output of 205 kWe—at a total efficiency rating of 77.1 percent.

"Our U.K. design team have packed a mighty heat punch of 40.7 percent efficiency into the new E200, without compromising on high electrical efficiency of 37.6 percent," said ENER-G's Laurence Stephenson. "The heat efficiency for a unit of this size is unmatched in the market, which is critical in boosting RHI returns to bridge the shortfall from dwindling FIT rates.

"It will accelerate the pay back on investment—making anaerobic digestion feasible for smaller farms and other sites. This could provide a valuable lifeline for dairies, which are under huge financial pressure from falling milk prices."

ENER-G's U.K. research and development team has achieved the high thermal output by using a high efficiency turbo-charged MAN engine and then reducing the cooling level of exhaust gases to achieve a sub 200kWth heat output that falls below the threshold for highest rate RHI.

The higher rate of RHI payment, available only to sub 200 kWth sites, provides customers with an extra 1.6p per kWth compared to the next tariff band for sub 600 kWth sites. This provides a guaranteed income over 20 years that increases with inflation.

FiTs are payable on electricity generated from a CHP unit of this size at the highest current rate of 10.13p per kWh.

At current rates, a typical farm or dairy operating the E200 on a 24-hour cycle at 92 percent availability would receive annual payments of up to £167,361 ($258,272) for FITs and £117,866 for RHI—amounting to a total guaranteed 20-year income of up to £5.7 million. This would be around £455,340 more than the lifetime income from the lower band RHI tariff.

Government grants of up to £10,000 are available to farmers to undertake anaerobic digestion feasibility studies.

Stephenson added, "Many pre-accredited anaerobic digestion projects are stalling because of finance issues, particularly due to FIT digression. But with guaranteed higher rate returns from RHI, a typical small scale anaerobic digestion project should offer a payback within four years, providing a guaranteed profit stream thereafter. ENER-G's maintenance package guarantees a minimum 92 percent availability of power and heat production—providing added certainty in negotiating finance".

The ENER-G CHP system can be supplied in a container on a 'plug and play' basis—simplifying and speeding up the commissioning process, which must take place within 12 months of pre-accreditation approval.

For the past 30 years ENER-G has been European market leader in small scale CHP (4kWe to over 10MWe). The company has developed over 170MW of biogas power generation from AD, landfill, and associated gases. ENER-G provides a complete package—from design and manufacture of CHP systems—to installation, commissioning and finance—through to maintenance and service via its national engineering team. It also supplies pre-treatment technology required to clean and dry biogas from digestion processes, such as effluent and AD.