Assessing the Commercial Feasibility of Manure to Energy

SystemsKraig Westerbeek

AVP, EHSMurphy-Brown LLC

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3. Evaporation pond Sludge Land, Landfill

Manure to Energy?

• Manure from animal operations does have energy value

• Swine manure = app. 8000 BTU / pound

• Animals are not 100% efficient in converting feed energy into body mass

• Relative measure of efficiency is feed conversion (swine 3 : 1)

Manure to Energy?

• Energy not used by animal can be recycled to other forms of useful energy

• While gasification and or combustion are options for some dry manures, anaerobic digestion seems to have the most potential for deriving energy from animal manure

*tpy: tons per yearSource: AMI, 2011

Chicken: 18,750,000 tpy*

Cattle: 13,300,000 tpy*

Swine: 11,650,000 tpy*

Turkey: 3,100,000 tpy* Others (veal, lamb, mutton): 158,500 tpy*

Manure energy: 10,000 – 20,000 MW power equivalence

“Anaerobic digesters, commonly in the form of covered lagoons or tanks, are designed to stabilize manure and optimize the production of methane.”

EPA AgStar – AD101

Number of Operating Anaerobic Digester Projects (US, July 2010)Dairy 126

Swine 24

Poultry 5

Beef 2

Biogas Use for Operational Projects

Cogeneration 78

Electricity 48

Boiler / Furnace Fuel 20

Flared Full Time 15

Unknown Use 7

Pipeline Gas 4

Vehicle Fuel 1

Methanol 1

Energy Production by Anaerobic Digester Systems: 2001-2010 (EPA AgStar)

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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Million kWh/yrEquivalent

Swine barn

Develop: Dewatering system to produce dry organic fertilizer

Swine manure is scraped and collected in the surge tank.

Develop: Solids are further dried with waste heat and processed into organic fertilizer or used as fuel for combustion at a biomass plant

Wastewater is pumped to existing lagoon and irrigated with existing irrigation equipment

Biogas

Electricity distributiongrid

Biogas

Digesters

Buffer tank

Generator

Surge tank

Combination of above-ground and in-ground fermentation leverages the cost and engineering advantages of both design.

Manure to Energy – Commercial Feasibility

• Fact: The technical feasibility of creating energy from manure has been proven

• Question: Can energy be created at a cost that makes manure to energy commercially feasible on a large scale?

Commercial Feasibilty

• To be attractive, manure to energy projects must create value for:– Investor (long term, stable return)– Farmer (avoided costs / increased

revenue, improved manure management system)

– Energy User (reasonably priced renewable energy)

Cost of Manure to Energy Systems

• High capital investment typically required (example – swine manure $5-10M per MW electricity)

• Various state and federal renewable energy credits help reduce initial investment

• Operating costs vary depending upon system used, but are significant, particularly if transportation of manure is involved

Revenue from Manure to Energy Systems

• Direct payment for energy based on current market value

• Renewable energy credits – vary from state to state depending upon legislative requirements

• Tax benefits (state, federal)• Carbon credit value (destruction of

methane)

Benefits to Manure Management Systems

• Significant destruction of volatile solids / reduced organic loading on existing system (increased treatment capacity)

• Reduction of total solids leaving a more nutrient dense solids stream

• Potential reduction of odor and emissions

• Reduction of pathogen loads

Commercial Feasibility

• Investments in manure to energy projects are risky due to the constant variability of manure characteristics

• Advances in technology (anaerobic digestion, etc.) have reduced the risks substantially

• State level renewable energy mandates have created a market for manure to energy projects by making returns more attractive

• Depressed carbon market has been a negative

Circle 4 Farms Project

• In the late 1990’s and early 2000’s, our company invested a significant amount of money in an anaerobic digester project at Circle 4 Farms in Utah

• The goal of the project was to capture methane generated from the anaerobic digestion of swine manure and convert it into biodiesel

Circle 4 Project

• The project failed due to problems associated with manure transport and lower than expected manure energy value

• While technically feasible, the economics of the project did not work

• The digesters built for this project are no longer in use

• This project may have worked with today’s renewable energy incentives

Murphy-Brown Strategy

• Instead of investing internal capital in manure to energy projects, MB has sought out partnerships with project developers and investors

• Current projects– Alpental Energy – Utah– Pacolet/Millikan – North Carolina– Ag Power – North Carolina– Roeslein - Missouri

Summary

• The technology is available today to support manure to energy projects – continues to improve with experience

• Economic drivers have been added to provide the necessary revenue to support projects

• The number of manure to energy projects continues to increase

Summary

• I believe manure can compete well in the renewable energy marketplace based on both its price relative to other renewable energy sources, and its reliability in delivering continuous energy

• I expect a continued increase in the number of manure to energy projects