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Anaerobic Digester Implementation on Small Dairy Farms in Michigan and Wisconsin: A Literature Review By: Ben Bailey Hello everyone, my name is Ben Bailey.

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Presentation on theme: "Anaerobic Digester Implementation on Small Dairy Farms in Michigan and Wisconsin: A Literature Review By: Ben Bailey Hello everyone, my name is Ben Bailey."— Presentation transcript:

1 Anaerobic Digester Implementation on Small Dairy Farms in Michigan and Wisconsin: A Literature Review By: Ben Bailey Hello everyone, my name is Ben Bailey. I am an undergraduate biosystems engineering student at Michigan State University. First off, I’d like to thank you for taking time out of your busy schedules to attend this webinar. We hope that you find the information presented today relevant and useful for your future plans. I am here today to present the process behind and findings of a literature review that I conducted over the past year. This review focuses on the implementation and installation of anaerobic digesters on small farms in the Midwest area of the United States.

2 Purpose The purpose of this literature review is to identify factors that encourage and discourage small digester implementation in Michigan and Wisconsin. Offer possible solutions to barriers that prevent building more small on-farm anaerobic digesters. The purpose of this literature review was to breach knowledge gaps between farmers and anaerobic digestion. Although some research has been done on anaerobic digestion in the past, there has been no full circle literature review previous that encompasses all aspects of the economical installation of anaerobic digesters, and as we saw earlier, farmers are very interested in learning about digester technology. This review seeks to bring together this spaced out information and provide answers to some of today’s most pressing questions.

3 Introduction Figure 1: Size distribution of US dairy herds in 2011
Overall, this review is an integral part of a larger research development in which 3 case studies were conducted and documented on small-scale digester projects. All together, these pieces of research are being used to collect data, background knowledge, and ideas in order to gain funding to build and test an economically viable digester on a small farm. Research like this is important because, as you can see from this figure, currently small dairies make up over 87% of dairy farms today. Many of these dairies are interested in adopting anaerobic digester technology on their farms. However, they don’t possess any knowledge on the economics or policy behind installing one. When I talk about a small dairy in this presentation, I am focusing on farms of less than 200 head. This is because the current the average herd size in the US is 187 head. Also, if I ever say small-scale digester, I am merely referring to a digester which operates on a small dairy. Figure 1: Size distribution of US dairy herds in 2011 Image from

4 Small Digester Implementation
Currently, there are 171 operational digesters in the United States. Of these 171, Michigan has six on-farm digesters, all of which are located on Confined Feeding Animal Operations (CAFOs). Wisconsin has 29 on-farm digesters (USEPA, 2012b). All but one of the Wisconsin digesters are located on a CAFO. Compared to other countries, the US has far less digesters. As of 2009, there were almost 50 million small-scale digesters operations around the world. There are an estimated 37 million small-scale digesters operating in China alone (Lansing and Moss, 2009). Image from Figure 2: Number of anaerobic digesters (2012) by state.

5 Results: Why install an anaerobic digester?
I will now go into the data analysis and discussion portion of the review, and talk about some of the results. Over all, there are many incentives to farms who want to install anaerobic digesters. These incentives are increased income, plant available nutrients, state policies, flexibility of digester systems and odor control.

6 Increased Income The first positive to anaerobic digester implementation is increased income. Digesters grant farmers increased income while still outputting great products. In a study conducted by Lansing and Klavon it was found that small digesters produced over $5,000 of revenue annually from biogas production. This combined income can from many sources such as, electrical generation and sales, use of methane for heating, sales of compost and bedding, carbon credits, and tipping fees. Figure 3: The anaerobic digestion process and its outputs Images from

7 Plant Available Nutrients / Odor Control
Another aspect of digestion that is often overlooked is the production of digestate as a byproduct. Digestate is what is left over from the feestocks when the digestive process is complete. This material has extremely high nutrient value that is nearly identical to manure. This means it can be used effectively as a fertilizer, allowing farmers who would regularly use their manure as fertilizer to follow old practices with the bonus of added income from digesters. In addition to the nutrient values portrayed by digestate, it is also almost odorless. Anaerobic digestion destroys about 60 to 75% of the volatile solids found in untreated manure. These volatile solids are what gives manure its smell when land applied. Also, the roof over digesters eliminated smells from the natural degredation process that manure undertakes when land applied. Images from Figure 4: Digestate

8 State Policy: Wisconsin and Michigan
States and governments also offer many incentives for digester installation. In Wisconsin, the Renewable Energy Sales Tax Exemption offers sales tax exemption to all sales made by clean energy systems. Also, the Renewable Energy Grant Program offers grants for a variety of renewable energy systems, including digesters. The minimum and maximum digester awards are $5,000 and $500,000 respectively. This award at its maximum is enough to cover half of the capital (including generator) of a plug flow digester servicing a farm size of 500 head (AgSTAR, 2010). In Michigan, the Biomass Gasification and Methane Digester Property Tax Exemption offers farmers who are certified digester operators and have registered digesters on their property 100% exemption from real and personal property taxes. Also, the state offers Biomass Energy Program Grants for the adoption of anaerobic digesters. These grants average around $25,000. Michigan’s Renewable Portfolio Standard (RPS) mandates utilities to generate 10% of their retail electricity sales from renewable energy resources by 2015 (DSIRE, 2013). Figure 5: Portrayal of Wisconsin’s projected green energy output by 2025 Images from

9 Flexibility of Systems
Another benefit, is that digesters are not limited to treating a single type of waste. Digesters are often more efficient when a combination of organic feedstocks are added (Safferman, 2013). As feedstocks such as food waste are added, biogas output increases, which leads to more possible revenue for a digester system. Michigan State University recently built a digester that accepts food waste from on-campus cafeterias and mixes it with manure from the Michigan State University Dairy Farm. This digester continues to refine its methane output using these different types of feedstocks. Digesters can also exist in many fashions, as seen above. Figures 6 & 7: Examples of two very different digester systems that ultimately perform the same process Images from Wikipedia.com and

10 Results: Barriers to anaerobic digestion implementation.
With so many positives to anaerobic digestion technology adoption, it is odd that there are so few digesters in the United States. Why is this? I will now describe many barriers to digestion and why it is not as applicable in the United States.

11 Dairy industry consolidation trends
First off, we have dairy farm consolidations trends. Basically, the number of dairy herds in the US has dropped from approximately 190,000 in 1990 to its current level of 58,000 (NASS, 2011). This is a trend that will continue as the dairy industry consolidates into larger farms, leading to fewer opportunities for small-scale digestion in the future. Images from Figure 8: The decreasing number of dairy cows over a thirty year period

12 Farmer views on small scale digestion
“…digesters would not be a “real improvement” for farms that already utilize “good farming practices”.” “it burns carbon when methane is burned as fuel,” Another huge barrier to anaerobic digester adaption is farmer’s own views of digestion. In a survey conducted by Wilkerson, it was found that 45% of farmers were disinclined to adopt digestions. Farmers also believe that digestion actually burns carbon when methane is produced as fuel and it is bad for the atmosphere. In reality, the combustion of methane by digesters keeps carbon out of the atmosphere, which is why a source of income from digesters is the purchasing of carbon credits. “One respondent indicated that he had “no ability to do it”… “Overall, 45% of farmers surveyed were disinclined and 21% were inclined to adopt anaerobic digester technology.” From Wilkerson, as cited in literature review

13 State policies Figure 9 & 10: Michigan and Wisconsin
Although state policy helps digester adoption, it also hurts it. In Michigan and Wisconsin, the mandate to have 10% of a utility’s retail electricity sales from renewable energy resources has been met. This means that it will be less likely to obtain funding for anaerobic digesters in the future. Also, many permits exist that may make it difficult for farmers to install anaerobic digesters. In Michigan if biogas is not being pumped off site, operators will be required to obtain an air permit. Also, a water quality permit, a soil erosion permit, and a solid waste permit may be required if the digester is receiving feedstocks other than manure. The most common case is if the digester is being used to treat pre or post-consumer food waste. Also, farmers may be required to obtain a permit for land application of digestate if other substances are going into the digester besides manure (MDEQ, 2013). In Wisconsin permits are required no matter how much SO2 is emitted due to odor regulations. No malodorous gases may be released from a system without a permit (WDNR, 1999). Different digesters are allowed to emit different amounts of SO2 based on their size and feed-stock composition (WDNR, 2008). Other than this, most digesters are not required to have a permit unless a generator is connected to the system and combustion is occurring (Dunn, 2013). Figure 9 & 10: Michigan and Wisconsin Images from michfencing.net and wisconsinbroker.net

14 Cost of digesters ($3,500,000) (4,000 head) $875/cow ($1,000,000)
The high initial cost of digester implementation is probably the largest detriment to wide-range digester adoption. The smallest digesters often cost around one million dollars. This price would be extremely difficult for any small farmer to meet. Especially since the usual payback time for a digester is predicted to be around 20 years. From this image, you can see that as the number of head increases on a farm, the price goes up. Ultimately you might think this is good for small farmers, but it in fact is not. With some simple arithmetic, we can see here that the actual price (using numbers taken off of the Agstar chart) of implementing a digester system per head is actually much higher for smaller farms. This leads to a huge dilemma for small farmers. Digester technology is supposed to be scalable, but we can see here that it is clearly not yet economically scalable. Figure 11: Comparison of Capital Cost of implementing a digester to number of head Image from

15 Natural gas market While the natural gas market can aid digester implementation, it can also discourage it. This is because natural gas prices are not fixed. When natural gas prices are high, the value of biogas increases. When natural gases are low, digester technology becomes less attractive. Currently, methane prices are the lowest they have been since 2000 at around $2.60 per thousand cubic feet, which means that digesters produce less income than they would have in 2008 when natural gas prices were around $7.50 per thousand cubic feet (EIA, 2013). This means that installing a digester that produces and sells natural gas would bring in less income now than it would in previous years. For this reason, using the methane produced from digestion for other purposes is often more profitable. With the recent boom in fracking, it is likely that natural gas prices will remain low. This will cause digesters to continue to be less profitable than they could be Image from Energytrendsinsider. com

16 Climatic conditions Figure 13: A comparison between heat
input requirement for digesters compared to daily temperature Climate also plays a large role in digester adoption. Anaerobic digestion requires a continuously high temperature to work. When the temperature drops below 35˚C during mesophilic anaerobic digestion, the bacteria do not function efficiently and digestion slows down. Thermophilic digestion requires an even higher minimum temperature of 55˚C (Zupancic, 2003). In the upper Midwest, temperatures often fall below 0 degrees celcius during the winter months. This can slow down the digestive process to a near standstill, leading to no income out of the digester. Also, energy created by the digester may actually have to be recycled back into the digester, leading to less profits. Image from

17 Electricity and connecting to the grid
Figure 14: Cost of electricity (cents/kWh) in leading countries For digesters that produce electricity, a major detrimental aspect of working in the US is the low electric prices. Compared to other countries such as Germany, you can clearly see from figure 14 that America’s electric prices are low (around 10 cents/kWh). This leads to less income from electric sales for digesters who produce electricity. Also, when digesters choose to generate and sell electricity, further maintenance and materials are required . Generating electricity and connecting to the grid are expensive. For digesters that produce electricity, 36% of the total capital cost is associated with electrical generation equipment. Also, the majority of yearly maintenance costs relating to digestion come from the upkeep of electrical equipment (NRCS, 2007). Gloy and Dressler (2010) state that the variable operating costs of generation for a large anaerobic digestion system are 4.22 cents per kWh, which is almost half of what digesters would receive selling back to the market. In the same report, Gloy and Dressler conclude that small digesters, which produce less electricity than large digesters, will have an even a harder time achieving a positive balance between income and expense. Now, many electric companies do subsidize green energy purchases, but with the 10% green energy goal being met in Wisconsin and Michigan, it is unlikely to see further subsidization in the future. One electric company out of Michigan named consumers energy however, has started a program in which they plan to increase their electricity influx from bioenergy by 9 percent. This means that a whole new market for anaerobic digesters has opened up in Michigan. Images from

18 What’s Missing? An economically viable way to install anaerobic digesters Federal funding High electrical reimbursement Stable market economy for digesters to gain footing State policies and permitting High farmer opinions of digesters With all this background knowledge, it is easy to see that anaerobic digestion could be a good thing for farmers, but there’s too much standing in its way.

19 How to Fix it? Model off Germany and other countries
Figure 15: Number of Anaerobic Digesters per Country Model off Germany and other countries Think outside the box Identify synergies with other forms of renewable energy that generate profits for the farm. Identify or develop less expensive materials that reduce the capital costs of the digester vessel. Images from

20 How to fix it? Research Educate Develop new digester systems.
Develop new uses of digestate to increase profits Develop new strains of methanogens that work more efficiently at colder temperatures Educate Develop new training programs focused for farmers Help policy makers understand the role of digesters Help policy makers identify and react to overcome digester barriers

21 Thank you for your time! Questions will be held after the next presentation. I now direct you to Charles Gould for the next segment of the webinar

22 Small digester design and small digester case studies results
M. Charles Gould Extension Educator-Agricultural Bioenergy and Energy Conservation Agriculture and Agribusiness Institute Michigan State University

23 Small digester design Dairy Farms in the United States (2009)
Herd Size (hd of cattle) Number of Farms Percent of Total Farms 1-29 20,400 31.4 30-49 11,500 17.7 50-99 17,300 26.6 8,600 13.2 3,850 5.9 1,700 2.6 1,000-1,999 910 1.4 2,000+ 740 1.1 Total 65,000 99.9 75.7% 88.9% 13.2% 94.8% 5.9% Let’s look at the big picture first. There are 65,000 dairy farms in the United States. <click> Over 75 percent of those farms have less than 100 cows. <click> If we add herds with 100 to 199 head, 88 percent of dairy farms in the United States have less than 200 cows. That catches the average herd sizes of Michigan, Wisconsin, New York, Minnesota and Pennsylvania, all of whom are in the top ten milk producing states. You will note that they are all cold climate states. <click> Then if we add the herds with head, 95 percent of dairy farms in the U.S. have a herd size less than 500 cows. <click> This represents 61,650 head of cows. This represents an untapped market for digester vendors. Yet if you look at what size of farm has digesters, it is not small and medium sized farms. In the database of US-based AD systems maintained by the USEPA AgSTAR Program, nearly 90% of dairy farm AD system installations are on farms with greater than 500 dairy animals. <click> 61,650 farms <500 cows 94.8% of total farms Adapted from: USDA, NASS Farms, Land in Farms and Livestock Operations

24 Small digester design Average U.S. Digester Cost: $1.5 million (U.S. EPA, 2009) This graphic is one we’ve seen many times. It illustrates the point that as the number of cows increase the capital costs of a digester on a per cow basis decreases. Economies of scale favor larger dairies. The average digester cost for dairies in the United States is $1.5 million. That is way beyond the budget for a small dairy. Digesters that cost this much are not an option for small dairies. <click> Source: AgStar Anaerobic Digestion Capital Costs for Dairy Farms.

25 Small Digester Case Studies
Farm Number of cows Total Project Cost ($) $/cow with grants $/cow without grants Joneslan Farm1 230 823,000 278 3,578 Keewaydin Farm1 90 512,000 277 5,688 Bakerview EcoDairy1 44 600,000 ? 13,636 Cornell Case Studies2 1,078 1,782,558 1,653 With this in mind, I was interested in comparing the digester cost per cow for the small dairies in our case studies with the digester cost per cow for large dairies. The first three farms listed in the table are small dairies from our case studies. As you can see, the cost per cow without grants increased as the herd size decreased. However, the cost per cow was substantially reduced with grants. Federal and state grants covered 92% of the capital costs for Joneslan Farm and 96% of the capital costs for Keewaydin Farm. The exact dollar amount of government grants received by the Bakerview EcoDairy was not provided. Now let’s compare this against the digester cost per cow for large dairies. The number of cows, total project cost and the digester cost per cow are averages extracted from eight Cornell University case studies authored by Curt Gooch and others. As you can see, even though the average number of cows and the total project cost are higher than for the small dairies, the average digester cost per cow was lower at $1,653. <click> If we dig a little deeper to find out what components of a digester system are the most expensive, we find that the digester vessel and energy conversion technology are the two most expensive components of a digester system. Based on information from the case studies, for small farms with digesters this amounts to approximately 50% of the total capital cost and for large farms approximately 76%. Federal and state grants are necessary to get technology from the lab to the farm where it can be further studied and perfected, but the digester industry needs to mature to a point where grants are not needed to have an economically viable project. I propose that if digester vessels are made with less expensive materials and the focus shifts to producing heat rather than electricity, then I think that digester projects will become more affordable. An explanation of an inexpensive digester that was designed as one of the deliverables of this project serves to explain this concept. <click> What components cost the most? Digester vessel and energy conversion Small farms – approximately 50% Large farms – approximately76% Source Source:

26 Small digester design Humza standing on a Sistema Biobolsa BB20 digester. Jose Luis’ milking parlor. He ships his milk to Nestle. Installing a Sistema Biobolsa BB40 digester. Concrete ramp to manure receiving basin. In March of 2012 I traveled to Mexico at the invitation of Alex Eaton, CEO of the NGO Sistema Biobolsa. Over 1,000 Sistema Biobolsa digesters have been installed in eight countries. Sistema Biobolsa targets livestock operations in the head range and provides electrical and mechanical energy production from the biogas. The purpose of this trip was to gain hands-on experience installing small anaerobic digesters on Mexican farms. It was one of the most intense educational experiences I’ve ever had in my Extension career. I was imbedded with Alex’s crew as they made farm visits to troubleshoot digesters with problems and install one digester. All total, I made eleven farm visits over four days. I saw first hand how robust the bladders were. The picture of Humza standing on a bladder is one example of this. I saw simple, functional digesters that produced more than enough biogas to meet the needs of the farmer. I heard numerous farmers say how pleased they were with their digesters. In fact, at a field day I attended one farmer lamented that he should have purchased more digesters. I came away convinced that bladder-type digesters could work in Michigan given the right system to address our cold temperatures and dairy production practices. On the first day I was with Alex he told me “Don’t let the perfect get in the way of the practical”. I saw that philosophy woven throughout the digester systems he developed and installed. His mantra has been in the back of my mind as I have thought about what a small digester system might look like for dairy farms in Michigan and Wisconsin. <click> Photos courtesy of Charles Gould. Sistema Biobolsa web site:

27 The Small Digester Concept
H2S and moisture removal, piping, valves, electrical, and pumps I have been working with others in designing an inexpensive digester system for a horse farm. You may be chuckling about using horse manure to produce biogas. There were four reasons for doing so. First, horse farms require warm barns to house horses in the winter. Second, warm barns in the winter equals warm manure. Manure going into the digester would not be cold and contain ice crystals. The significance of this is it takes one BTU to raise the temperature of one pound of water one degree Fahrenheit. So if manure has ice in it, for every pound of ice it takes 1,000 BTUs to melt it. A small amount of ice can drastically increase BTU requirements, thus reducing the effectiveness of a digester to produce biogas. Third, horse farms use a lot of hot water for washing horses. And fourth, manure management on horse farms is still primarily done by hand. These reasons made designing a small digester for a horse farm attractive to us. We figured we could make our mistakes on a horse farm and then graduate up to a dairy farm. <click> The concept is based on inserting a bladder inside a cargo container. The bladder in the slide is a Flexitank and is made by Big Red out of Zeeland, MI. Big Red is world renown for their shipping container bladders. The bladder is made from two multi-layer barrier films surrounded by a polyolefin mesh outer layer. The mesh outer layer provides durability and protects the barrier films. The barrier films are made from linear low density polyethylene and ethyl vinyl alcohol. The barrier films are designed for wine storage as an oxygen and carbon dioxide barrier. Bladders come in 20 and 40 foot lengths. <click> Both easily fit inside a cargo container. Cargo containers are easy to find and inexpensive. They provide structure and containment. Cargo containers would need to be insulated and properly vented. <click> Next add hydrogen sulfide and moisture removal technology, piping, valves and pumps. <click> The entry point for the manure is the grinder. Horse manure has to be ground as it is a more fibrous manure. Moisture is added to help it flow. Moisture does not have to be water. It can be milk house wastewater, liquid swine manure, food waste or some other high moisture feedstock. <click> The bladder will need to be heated to maintain mesophilic temperatures. A boiler that uses biogas can provide that heat. <click> Biogas can be stored in bladders until it is used. <click four times> Digestate would be stored in some kind of below or above ground manure storage structure until it can be land applied. This system is modular and can be expanded or contracted as needed. <click> Pictures courtesy of EPT (http://eptpac.com/index.html), Garb-el Company (http://www.garb-el.com/) and M. Charles Gould.

28 Small digester design Assumptions
21 day HRT Daily volatile solids loading rate – 0.33 lb/ft3 Three 40’ bladders would be needed for 100 cows. One 40’ bladder would be needed for 38 horses. Bladder dimensions are 40’x7.66’x3.92’. Estimated cost for equine digester system described in previous slide using a 40’ bladder and cargo container is $20,000. <click> If I assume a 21 day hydraulic retention time and a daily volatile solids loading rate of 0.33 lb/ft3, <click> I need to have three 40 foot bladders or six 20 foot bladders for 100 milking cows or one 40 foot bladder or two 20 foot bladders for 38 horses. A digester sizing spreadsheet is available on the NCRCRD web site. <click> Bladder dimensions are 40 feet by 7.66 feet by 3.92 feet. The 20 foot bladder has the same height and width, just 20 foot shorter. <click> The estimated cost for the equine digester system described in the previous slide, using a 40 foot bladder, is $20,000. I do not have an estimated cost on a dairy system but it would be more expensive. This is an unproven system but I am looking for sources of funding to build and verify this design. Maybe the more logical thing to do is to team up with an entity like Sistema Biobolsa who already has a proven digester system. All that would be needed is to make it ready for cold temperatures. Regardless, I welcome anyone who would like to collaborate with me on a project like this to contact me. <click>

29 Small digester design Increase digester efficiencies Digester design
Scale up, not down Reduce hydraulic retention time Modular components Cheaper digester vessels Use materials other than concrete and steel Focus on biogas as the end product Improve digester performance Feed digester high energy feedstocks such as fats, oils and grease, food waste, etc. Manipulate methanogenesis? Methanogens that are more efficient at producing methane? I believe increasing digester efficiencies is a way to reduce costs. Scaling up instead of down, using less expensive materials, and designing modular digesters have already been discussed. Digesters with short hydraulic retention time reduce the overall footprint of the digester system and eliminate the need for expensive storage tanks. <click> Focus on biogas as the end product for uses such as heating, cooking, and refrigeration rather than electricity production. If there is a need for electricity production, use it to meet specific selected on-farm needs rather than sending it to the grid. <click> Improve digester performance and increase biogas production with high energy feedstocks such as fats, oils and grease, food waste, etc. Increased biogas production results in increased power output. For example, an increase in the methane content by 5% results in a rise in the generated electrical power of about 9%. Receiving high energy feedstocks can be a source of income and generate a profit for the farmer. Do we completely understand methanogenesis? Are there efficiencies to be found in manipulating the process of producing biogas? Are there methanogens that are more efficient at producing methane? Can a digester be developed that selects for those type of methanogens? <click> Sources: Lansing. S and Moss A.R Small-Scale Anaerobic Digestion: Technology and Applications presentation. Siemens Industry Inc Process analytics support higher yields in biogas plants

30 The bioenergy industry with smaller-scale digesters
US annual natural gas consumption (MMcf/yr) MMt CH4 emissions from livestock manure/yr Small scale digesters have the potential to have a significant impact on reducing natural gas consumption and methane emissions. The graph on the left shows that small scale digesters can reduce the natural gas consumption in the United States by 25%. The graph on the right shows that small scale digesters can reduce methane emissions by 5% per year. These are not insignificant amounts. <click> US methane emissions reduced by 5% per year (reduction of 34.5 million tons of CO2 equivalent) US natural gas consumption reduced by 25% (equivalent to 1 billion barrels of oil annually) Source: Lansing. S and Moss A.R Small-Scale Anaerobic Digestion: Technology and Applications presentation.

31 Small Digester Case Studies
Bakerview EcoDairy - BC 44 milk cows Avatar digester Joneslan Farm - VT 230 milk cows UEM Inc. digester Keewaydin Farm - VT 90 milk cows Two Wisconsin case studies will be posted shortly. Now, I would like to talk about the case studies. Three case studies were written and provide information to better understand the economics associated with installing, operating and maintaining a digester on a small dairy. Two additional case studies are pending and will be posted on the web site you logged in on to view this webinar. As you can see, there are two Vermont dairies, one British Columbia dairy, and two Wisconsin dairies. A brief description of each farm is listed. Components of each case study included a description of the farm, a brief overview of the anaerobic digestion system, an explanation of why the farm chose to put in a digester, an in-depth description of the digestion system including diagrams, economics of the system including itemized capital costs, parameters that are tested, time commitment for selected tasks, description of, amount received and problems encountered with co-feeds, amount of revenue received from digester, reported problems and failures in specific areas, and lessons learned. I am going to share with you some of the financial data, reported problems and failures, and lessons learned from the first three farms. <click>

32 Small Digester Case Studies
Joneslan Farm Financial Below are the projected estimated percent of revenue: Total revenue from tipping fees (0%) Total revenue from electrical generation (61.9%) Total revenue from “avoided cost” of purchasing fossil fuels for heating (4.6%) Total revenue from “Other” sources: Fiber sales (11%) Avoided cost - On-farm bedding use (22.5%) It is difficult to arrive at a true value of the electricity produced because of generator issues, but at a minimum, the value of the electricity produced is approximately $50,000. In terms of annual operating expenses, if the generator engine was functioning correctly the annual operating expenses would be approximately 5% more than what was predicted. The digester at Joneslan Farm performed very well but there were genset problems. The genset went online in August of 2012 but as of August 2013 had only ran an estimated 4,900 hours. The poor performance was due to an engine that was not properly designed for biogas combustion. A new engine will be installed this winter. The WEG generator performed as it was designed to perform. <click> As you can see, the primary source of revenue will come from electrical generation (61.9%) with bedding a distant second. <click> At a minimum, the value of the electricity produced is equal to the Joneslan Farm’s yearly electric bill, which is approximately $50,000. Anything above that is income coming into the farm. No carbon credits are accumulated or sold. Other potential sources of revenue include sales of solids, displacement of sawdust bedding, reduced fuel oil consumption, and reduced synthetic fertilizer consumption. <click> In terms of annual operating expenses, if the generator engine was functioning correctly the annual operating expenses would be very close to what was projected when the project was put together. If everything was running correctly, the annual operating expenses would be approximately 5% more than what was predicted. It should be noted that the genset never ran steady for more than two months. The farm has spent a great deal of time trying to keep the genset running. <click>

33 Small Digester Case Studies
Keewaydin Farm Financial The digester has not been in operation long enough to arrive at a reasonable estimation of profit and loss. From January through August 2013 the gross value of the electricity produced was $4,178. Operating expenses are much higher than projected when the project was designed because of many costly repairs. The Keewaydin Farm had both digester and genset problems. Unfortunately, the digester has not been in operation long enough to arrive at a reasonable estimation of profit and loss. Because the digester did not reach consistent operation until summer of 2013, it is difficult to determine a true value of the energy produced. However, a window to what that value might be was provided from January through August Based on power company records, the gross value of the electricity produced was $4,178 and the net value after subtracting the digester parasitic load was $3,182. <click> The operating expenses are much higher than projected when the project was designed because of many costly repairs. However, the digester vendor has covered the cost of the majority of those repairs and continues to service the digester and genset. <click>

34 Small Digester Case Studies
Bakerview EcoDairy Financial Ongoing operational challenges had made it difficult to assess long-term operational requirements, as the system has yet to operate as a stable system for any length of time (>6 months). Net annual cash flow: $3,480, based on the period of June 1, 2011 to December 1, 2012 when electrical production was metered and fiber was used as bedding. Bakerview EcoDairy is located on the edge of an urban area near Abbotsford, British Columbia. The farm is both a fully functioning dairy operation and a demonstration farm which showcases the latest advancements in dairy industry technology. Visitors who tour the operation can learn about the history of dairy farming and the farm’s efforts to be sustainable and eco-responsible. Examples include a robotic milker, a free stall barn, a green roof with rain water collection, naturally ventilated buildings, induction lighting, and of course the anaerobic digester. Construction on the Bakerview system began in November of 2010 and was completed in January of Biogas production was first documented in April/May of The digester was assembled in an existing calf barn that was retrofitted to house the new system. The primary use for the biogas is electricity production. Excess biogas is flared off. Generally, the system produces about 12 kW per hour based on a 14 hour per day run time (60%). <click> Ongoing operational challenges had made it difficult to assess long-term operational requirements, as the system has yet to operate as a stable system for any length of time. Key operation challenges have been related to the interconnection (harmonizing power), combined heat and power unit, digester mixing and solid liquid separator. It is important to note that the digester vendor is providing ongoing support for the system. <click> The net annual cash flow, based on the period of June 1, 2011 to December 1, when electrical production was metered and fiber was used as bedding, was $3,480. <click>

35 Small Digester Case Studies
Reported problems/failures Site planning and design Engineering Construction and equipment Biogas utilization and systems System control and operation monitoring and control As you can see, power generator or digester problems have significantly impacted the income stream to each farm. Each farmer was asked to describe problems and failures with the digester system installed on the farm. Problems and failures were separated into five categories and I will provide an example of each one: <click> One - site planning and design, which includes site plan development and integration into existing facilities. One farm reported that both time and money could have been saved if the design work had been completed beforehand and the farmer consulted about the placement and design of the digester system. Had the farm known where the pipes were coming into the solids separator from the digester, the solids separator would have been set closer to the digester to prevent so many elbows in the piping. <click> Two - engineering, which includes all engineering related activities whether they be civil, structural, electrical or mechanical. One farm reported the failure of the original mixing system to provide sufficient mixing resulted in significant solids accumulated in the system. The digester vendor drained the system and installed a new, more efficient mixing system which operated automatically instead of manually and externally. The new automatic mixing system pressurizes biogas through a gas blower and injects it into the bottom of the digester through 400 injectors. The system has been operating well since the installation. <click> Three - construction and equipment, which includes construction quality and equipment selection for the digester. One farm reported that the inability of factory-applied insulation on a digester to hold heat necessitated applying spray-on foam insulation to maintain mesophilic temperatures. <click> Four - biogas utilization and systems, which includes equipment selection and system integration of the biogas utilization system. One farm reported that the spec sheet provided by the genset manufacturer indicated that their gensets could run on biogas with 100% humidity. Consequently, no moisture removal equipment was installed. Water now condenses in the line between the blower and the flare. The line has to be emptied of water before the blower is turned on otherwise the blower seizes up due to the weight of the water on it. The digester vendor is designing a biogas moisture removal system. <click> And finally, system control and operation monitoring and control (including personnel issues). One farm reported that originally it was using milk fat solids as a co-feed, but soon noticed that gas production was erratic, did not consistently produce expected biogas increases, and on a couple occasions resulted in the complete loss of biogas production. While unproven, it is believed that sanitation water from the processing plant may have been mixed with the solids, creating a toxic feedstock. The farm stopped feeding their digester milk fat solids and instead feed it whey permeate. Since making the change, biogas production has been stable and responds normally to permeate feeding events. <click>

36 Small Digester Case Studies
Lessons learned from farmers It is best to have a turnkey contract with performance guarantees. Choose a digester vendor with capital and experience behind them. Keep the system as simple as possible. Hiring local skilled labor and making digester components locally reduces the overall cost of the project. Digester vendors should include farmers in the design of the digesters as farmers may have suggestions that can save a project time and money. Digester vendors should talk among themselves and share information to avoid the same costly mistakes that seem to be repeated when on-farm digesters are built. Be careful with assumptions. We asked the farmers to summarize the lessons they learned from their experience in installing, maintaining and operating a digester. This is what they said. <click> It is best to have a turnkey contract with performance guarantees. One farmer suggested talking to an attorney and to current owners of other systems to get their recommendations on contract content. <click> Choose a digester vendor with capital and experience behind them. Hire companies based on their expertise. Roles and responsibilities of the project should be divided up based on the technology providers experience area. One company may not be available/or responsible for providing a complete turnkey system. Clear and honest communication between the farmer and the digester vendor promote trust and feelings of goodwill. <click> Keep the system as simple as possible. Minimize moving parts and combine processes as much as possible. Ideally this will result in a system with lower capital and operational costs. <click> Hiring local skilled labor and making digester components locally reduce onsite costs, which keep the overall cost of the project down. <click> Digester vendors should include farmers in the design and construction of the digesters as farmers may have suggestions that can save a project time and money. <click> Digester vendors should talk among themselves and share information to avoid the same costly mistakes that seem to be repeated when on-farm digesters are built. <click> Be careful with assumptions such as there are no contaminants in the feedstock, biogas has a low water content, and hydrogen sulfide levels are low. If found to be not true it could prove to be disruptive to the stable operation of the digester and costly to work around. <click>

37 Project Summary Less expensive digesters and favorable policies will support small digester growth in the U.S. Need more basic and applied research. Targeted farmer educational programs. This project sought to understand what is needed to make small digesters part of the rural economic engine in Michigan and Wisconsin. What we discovered is what we thought we would find – there is limited information out there due to the lack of small digesters in the United States. The literature review asserts that designing less expensive digester systems and adopting policies that are favorable to small digester implementation are two factors that would spur building more digesters on small dairy farms. It was pointed out that there is a great need for more applied and basic research, as well as targeted farmer educational programs. Specific research and education suggestions were offered that could increase the number of digesters on small dairy farms in Michigan and Wisconsin. What we have learned from the case studies supports the conclusions of the literature review. The potential to make a profit is there is digester and genset problems are eliminated or greatly reduced. Additionally, we learned that farmers still feel positive about digesters notwithstanding the problems they have had producing biogas and generating electricity. This is significant because their experience will convince or discourage other dairy farmers to install digesters. I encourage you to go to the web site and read the case studies and the literature review. There is a great deal of information in them that was not shared in the presentations you’ve heard this morning. I also remind you that the two Wisconsin case studies will be posted shortly, so check back later. <click> Ben and Jerry’s Ice Cream store in Vermont. Photo credit: Charles Gould.

38 This project was made possible by funding from The North Central Regional Center for Rural Development (NCRCRD). I would like to acknowledge and thank The North Central Regional Center for Rural Development (NCRCRD) for funding this project. <click>

39 Thank you! M. Charles Gould
Extension Educator-Agricultural Bioenergy and Energy Conservation Agriculture and Agribusiness Institute Michigan State University 12220 Fillmore St, Suite 122 West Olive, MI 49460 Toll Free: (888) , Ext Direct line: (616) Thank you! Thank you for taking time out of your schedule to participate in this webinar. We will now answer any questions you may have. Please contact me if you have questions not answered in this webinar. MSU is an affirmative-action, equal-opportunity employer, committed to achieving excellence through a diverse workforce and inclusive culture that encourages all people to reach their full potential. Michigan State University Extension programs and materials are open to all without regard to race, color, national origin, gender, gender identity, religion, age, height, weight, disability, political beliefs, sexual orientation, marital status, family status or veteran status. Issued in furtherance of MSU Extension work, acts of May 8 and June 30, 1914, in cooperation with the U.S. Department of Agriculture. Thomas G. Coon, Director, MSU Extension, East Lansing, MI This information is for educational purposes only. Reference to commercial products or trade names does not imply endorsement by MSU Extension or bias against those not mentioned.


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