Creating a Biogas Empire
Synergy Dairy is located in western New York’s Wyoming County, one of the leading dairy production regions in the U.S. The 2,000-head farm is now the site of an important milestone for the state’s biogas industry.
It hosts a recently completed 1.4 MW biogas plant, which takes in about 425 tons of waste per day from local food processors, as well as the dairy’s cow manure. Not only is the facility the largest on-farm anaerobic digestion (AD) project in the state, it’s also New York’s first biogas project specifically designed for codigesting animal and food wastes.
It wasn’t a simple feat, and the project almost missed the deadline for $2.8 million in federal energy tax credits, which would have resulted in its demise. Last fall, the power purchaser notified the project's owners that it would be unable to complete hook-up to the power lines until March, delaying startup and disqualifying the project for the tax credits. But with the help of Sen. Charles Schumer, D-N.Y., a strong proponent of renewable energy in the state, the project was able to get back on track and meet the deadline.
A ribbon cutting ceremony was held in early April, followed by a grand opening in May, and since then, it’s been smooth sailing for CH4 Biogas, which owns and operates the facility. With such a significant success story under its belt, the company is ready to offer its experience, services and advice to other farms looking to implement similar projects. Biomass Magazine discussed the project with Lauren Toretta, vice president of CH4 Biogas.
Biogas projects seem relatively simple at a glance, but often take a great deal of time and effort to implement. What’s the most difficult aspect of bringing an on-farm digester project to fruition?
Toretta: Financing and legal paperwork are the most difficult aspects. They are the most time-consuming—lots of moving parts and steps to keep organized and stay on top of, in order to get the financing finalized and the project moving forward.
How much does a project like this one cost?
Toretta: Typically, the range is around $6 to 9 million. Financing and legal costs for our first project were over $1 million. We hope to reduce this on future projects by developing standard agreements.
Let’s talk feedstock. Aside from manure, where is the food waste coming from, and what kinds of contracts (if any) are in place?
Toretta: The waste comes from local food processors. It is waste that would otherwise be landfilled or land-applied without treatment. Most of our contracts are short-term, 3 to 5 years. The bulk of our feedstock at Synergy Biogas is manure that is pumped directly from the barns.
So it’s a co-digestion plant. What’s different about co-digestion than single feedstock?
Toretta: The plant is designed to take in and process food-grade organic waste along with manure. The manure is the same from day-to-day in terms of volume and consistency, but the supply and consistency of the food waste is variable. The plant is designed to manage this variability and keep the digestion process (a biological process) running on an even keel. We have front-end receiving tanks to equalize deliveries, as well as grinders and debris traps. We can adjust the relative proportion of manure to food waste fed to the digester from hour to hour.
What about permitting? What permits did you need, and were they difficult to obtain?
Toretta: Typically, there are local zoning permits and environmental permits, and state level air and waste/water permits. The air permits are linked to the engine emissions, which we have good data on through GE Jenbacher. In the case of Synergy, the permits were not hard to obtain. We followed the guidelines, provided documentation, and adhered to the filing and review procedures.
The project generates 1.4 MW of power. Can you give us any details on your power purchase agreement (PPA)?
Toretta: Our plant is a participant in the regional power market administered by the New York Integrated System Operator, which allows us to sell electricity and renewable energy credits to counterparties in New York and New England. We work with a broker, Evolution Markets Inc., to find the best offer. We are currently negotiating a three-year PPA with a New England utility. In the meantime, the local utility National Grid is buying the electricity we generate.
What makes a location a good candidate for a project of this size and scope?
Toretta: When we think about an on-farm project, the most important thing is having a good partner. The Synergy dairy is well-managed and progressive. And size matters. We want a farm with at least 1,500 cows and a land base for handling the digested biomass. Next, we look at the availability of food waste in the area and the cost of interconnecting to the power grid. In some rural areas, the cost of interconnection can be prohibitive. Existing infrastructure needs can be a critical limitation to the siting of a plant and for general economic development.
Has CH4 used a Jenbacher engine in existing projects? It seems they have a very good reputation and track record in the industry.
Toretta: For the size engines we’re looking at—1,000 kW/h (kilowatts per hour) to 2000 kW/h—GE Jenbacher is the market leader in terms of efficiency and reliability. Our partner, Bigadan A/S, builds and operates biogas plants in Europe and is having good success with Jenbacher engines.
How long, from beginning to end, did the project take to complete?
Toretta: From the time we close financing and can order equipment the construction period is less than 12 months. Synergy Biogas took nine months from groundbreaking to commissioning. The schedule is weather-dependent, but our facilities are modular, which makes site installation relatively quick.
Permits, zoning approvals, site design, construction budgets, feedstock agreements, power purchase agreements and loan agreements have to be in place prior to the start of construction. It can take several months of development work to get all these documents and approvals to bring a project to closing.
What other projects does CH4 own/operate? Any similar to this one?
Toretta: Synergy is our first U.S. facility. Our partner, Danish company Bigadan A/S, has built 45 similar plants around the world, predominantly in Europe. We have several projects in development and plan to start construction on a facility in Ohio in July.
Author: Anna Simet
Contributions Editor, Biomass Magazine