1. Next Generation Technology Swine Waste-to-Energy Project Renewable Energy Generation and GHG Emission Reductions via Innovative Waste Management Presented To: BioEnergy Symposium 2013 Anaerobic Technologies April 9, 2013 Presented By: William G. “Gus” Simmons, Jr., P.E. Cavanaugh & Associates, P.A. 1

2. Why is NC Looking at Alternative Energy / Fuels from Ag Waste??? NC Ranks 2 nd in the US in pigs produced, with 15% of the US pig crop (IA) NC Ranks 2 nd in the US in turkeys produced, with 13% of the US turkey crop (MN) NC Ranks 4 th in the US in broilers produced, with 9% of the US broiler crop (GA) NC Ranks 10 th in the US in residential electricity consumption, per capita 2

3. North Carolina Swine Energy Potential Data provided by Duke University Carbon Offsets Initiative 3 Asheville TriadRaleigh/RTP Charlotte Wilmington

4. How to turn pig waste into electrons? 4

5. Case Study: Digester Systems for Animal Waste Solids – Loyd Ray Farms Project GHG Emission Reductions and Renewable Energy Generation via Innovative Waste Management 5

6. Step 1: Establish the Target Project Goals: (2006) Make it “Market Feasible” – farm owners perspective Energy Generation + Water Quality Improvement + Air Emissions Improvement Make it flexible - different farm sizes & types Process based, not technology based Innovative waste management : Achieve environmental performance standards as described by NC legislation – Substantial elimination of odor, ammonia, total nitrogen, and pathogens 6

7. BioEnergy Digesters in North Carolina

8. Commercial-Scale Demonstration Project: Loyd Ray Farms Swine Waste-to-Energy Project Converts waste from 9,000 pigs into electricity Improved Environmental Management

9. Raw Waste Mixed Digester Biogas Liquids Treated Water How it Works Existing Storage Lagoon

10. How it Works: 10 ~65% CH 4

11. Photos by: Marc Deshusses, Duke University, 2011 What it looks like… After Construction 11 What it looks like… Steady State

12. Covered Anaerobic Digester 12

13. Aeration System 13

14. Gas Conditioning System & Microturbine Microturbine Specifications: 65 kilowatt Generative Capacity First Scheduled Service @ 8,000 Hrs Only one moving part  @ >90,000 RPM Air bearings – no lubricant or coolant required 14

15. Expected Outcomes: 5,000± Carbon Offsets per Year, registered with Climate Action Reserve  Duke University & Google: Retire to meet carbon neutrality goal, retire for immediate internal demand, and/or sell when strong market signal arises 500± Renewable Energy Credits per Year  Utility: Motivated by NC Renewable Energy and Energy Efficiency Portfolio Standard Swine Waste Set Aside Electricity Generation  Farm: Energy to offset increased demand from innovative system and offset baseline electricity demand (projected to offset up to half of farm’s existing electricity demand) Compliance with Environmental Performance Standards for New & Expanded Swine Farms (ammonia, nutrients, pathogens, odors, metals and zero discharge of waste to surface and groundwater); Ensures compliance with offset standard to meet all air and water quality standards by controlling nutrient loads 15

16. RESULTS 16

17. 17 Condensate flooded compressor, required rebuild Controls system issues, supplier ‘tweaks’ Condensate pump issues

18. 18 Compressor cooler failure, controls Manual Operation Only – Gas Skid Replacement

19. Scorecard 19 ParameterGoalActualSuccess Gauge RECs learned that we have more potential 50034469% Carbon Offsets deductions due to venting, metering 5,000 Tons2,500 Tons50% Environmental Performance - Surface Water Protection Substantial EliminationAccomplished by Permit Passed Environmental Performance - Ground Water Protection Substantial EliminationAccomplished by Permit Passed Environmental Performance - Odor Emissions >7:1 D/T2:1 D/TPassed Environmental Performance - Ammonia Emissions WWTP = Farm = 106 kg/wk 476 kg/wk 23 kg/wk 341 kg/wk 460% (Passed) 140% (Passed) Environmental Performance - Vector Reduction <7,000 mpn/100mL<5,000 mpn/100mL 140% (Passed)

20. Costs and Benefits Costs Capital: $1.7M O&M: $80,000/year Funding sources NCACSP LCP CCPI/EQIP Sale of RECs to Utility Sale of Carbon Offsets (voluntary market) Benefits Cash flow for farm owner Improved animal health Other ecosystem services (N, P control) Variability in nitrogen output for fertilizer Reduced sludge management cost Improved air quality on-site Reduction of odors off site More choice in cropping plan Sustaining NC Agriculture Reduced GHG Emissions 20

21. A couple of firsts… First Swine Waste-to-energy project in the State of North Carolina to place RECs on the North Carolina Utilities Commission REC Tracking System First Transfer of RECs from a NC Swine Farm to Duke Energy First ‘Innovative Swine Waste Treatment System’ permitted that utilizes digester  First Expansion Permit Since 1997??? 21

22. Ongoing Research & Analysis: Digester Performance – DU is conducting continuous research of digester biogas composition, loading rates, and carbon destruction efficiency (monthly) Environmental System Performance – Water quality analysis by DU and Private Labs (monthly / quarterly) Emissions – DU performing flux analysis of ammonia and odor emissions (twice annually) Animal Productivity – Mortality rates, feed conversion rates, days to market, etc. Economic Performance – DU / DE / Cavanaugh 22

23. Challenges & Lessons Learned: Gas Skid Challenges – Gas skid has suffered from multiple outages, which prevents REC generation. Numerous issues with gas skid controls system and condensate removal. Abundance of Gas – Very conservative on gas production expectations – have not been able to utilize all gas produced. Electrical Load Balancing – Environmental system operating at full capacity requires more electricity (demand) than MT produces. Adjusted operational schedule to resolve. CAR Protocol Requirements – Adding additional gas flow meters, thermocouples on flare, etc. 23

24. Special Thanks Mr. Loyd Bryant, Loyd Ray Farms LNH Farms 24