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RNG initiatives give new life to anaerobic digesters on dairies

Progressive Dairy Editor Karen Lee Published on 23 August 2019

The adoption of anaerobic digesters in the dairy industry hit a roadblock as the original financial incentives expired. However, new policies have digesters powering up again in a push to provide renewable natural gas (RNG).

A webinar hosted by the AgStar program this spring looked at the current and developing market for RNG, the impact of various policies and projects taking shape in the agricultural sector.

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The first speaker was Johannes Escudero, founder and CEO of the Coalition for Renewable Natural Gas. The coalition was established in 2011 to create a policy platform, advocacy and educational voice for the RNG industry at federal, state and provincial levels.

When the coalition began, there were 31 operating RNG projects, with nearly 100% producing and selling for off-site electrical generation as incentivized at the state level.

As the state incentives matured, these projects could no longer compete with the low-cost production of electrical generation from wind and solar.

Newer federal and state policy programs like the renewable fuel standard administered by the EPA, the low carbon fuel standard administered by the California Air Resources Board and Oregon’s clean fuels program administered by the Department of Environmental Quality have emerged.

“Increasingly, these programs are driving production of RNG in recognition of the resource as an ultra-low carbon fuel available to a new generation of medium and heavy-duty natural gas vehicles,” Escudero said.

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“Because of these favorable policies, RNG production specifically for transportation fuel use has increased more than tenfold in the last five-and-a-half years,” he continued.

The coalition’s original priority was to double the number of operating RNG projects by 2025, with a target number of 100 projects.

There are now 96 RNG projects operating – 72% are for transportation fuel, and the rest are for electricity or heat production.

“We have 22 projects currently under construction and 40 in development [32 in the U.S. and eight in Canada]. There is still an enormous untapped potential for RNG deployment, development and utilization,” Escudero said.

The largest stationary feedstock sources in the U.S. for RNG production include 66.5 million tons per year of food waste, 17,000 wastewater treatment facilities, 8,000 large livestock farms and dairies, and 1,750 landfills.

In California alone, there are more than 200 dairies, 100 wastewater treatment facilities and 50 landfills that could be cultivated to produce RNG, creating between 1 and 2 billion diesel gallon equivalents of RNG.

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“That’s a significant volume,” Escudero said. “It’s enough to replace up to 60 percent of all the diesel currently consumed in the Golden State or to power between 2 and 3 million homes on an annual basis.”

In addition to its ability to provide RNG, California has been a big user of the product.

“When you look at the penetration RNG has enjoyed in terms of utilization as an ultra-low carbon transportation fuel, the vehicle market is pretty well saturated in California,” Escudero said.

Due in large part to policy support, RNG is used for around 90% to 95% of the existing vehicle demand in California. It is lower nationwide, somewhere between 25% and 38%.

“There’s very little market left for RNG deployment as a transportation fuel in California, but if you take a look at the market potential and availability for utilization of RNG in the commercial, residential or industrial sectors, there’s an incredible capacity and appetite there,” he said.

In addition, the desire for more electrification in transportation and other sectors will demand increased volumes of RNG available as a baseload power source that’s storable, dispatchable and can compensate for the intermittent production and availability of electricity from other sources.

Environmental benefits

“Our ability to capture these gases and then utilize them to displace fossil fuels on the back end is really a net-net win for everyone economically and environmentally,” said Matt Tomich, president of Energy Vision, a New York-based NGO.

Methane accounts for 10% of the total greenhouse gas emissions in the U.S. and 16% globally. It is 25 times more potent than carbon dioxide in its global warming potential over the 100-year time frame, but if you look at only the next 20 years, it is 86 times more potent than carbon dioxide. To counteract this, we not only need low-carbon strategies but also net negative strategies.

“If you are able to take dairy manure, put it into a digester, collect that gas, clean it up and ultimately get it into a natural gas vehicle, you’re talking about a highly net negative carbon strategy,” Tomich said.

The anaerobic digester prevents the gas from venting into the atmosphere, and the resulting fuel displaces diesel or fossil natural gas.

Many major urban centers are struggling to deal with NOx emissions, a precursor to smog. Only 3% to 4% of vehicles on the road are heavy-duty diesel, yet they account for 25% of on-road fuel use and 18% of total NOx emissions, as well as large quantities of particulates and VOCs.

“From a public health standpoint, there are major benefits in being able to take [RNG] and put it into trucks that would otherwise run on diesel,” he said.

Even though diesel engines have improved drastically over the past decade, NOx emissions from new natural gas engines are 90% lower than the most stringent regulation level. They also have up to an 80% reduction in carbon monoxide emissions and are 50% to 80% quieter than comparable diesel models.

Initiatives in California

In 2017, California’s state legislature passed a bill for a 40% greenhouse gas reduction by 2030, and it is looking to the dairy industry to do its part.

Roughly 55% of methane emissions in the state come from the dairy industry. About half of that (or 26% of the total amount) comes from manure lagoon systems, while the rest is enteric emissions (gas released by the animals).

“There are approximately 100 diesel gallon equivalents per cow per year. If you were to use that in a car, one cow’s emissions could enable you to drive across the country,” said Neil Black, president of CalBio.

As a dairy digester developer, CalBio focuses on reducing methane in the state by capturing it at the manure storage. Founded in 2006, they partner with the dairy industry and benefit from oil and gas industry expertise. They are supported by grants from the state, as well as lenders and investors.

“California has provided a lot of grant funding to dairy digester projects. The investment the state has made in dairy is about the most cost-effective as measured by state dollar per ton of greenhouse gases reduced,” Black said.

At the time of the webinar, they had five projects operating for electricity and were developing 40 more dairy digesters in seven clusters to put the gas into the pipeline.

Utilizing a hub-and-spoke model, the digesters are located on the dairy with hydrogen sulfide removed from the gas before it enters a gathering line. Once piped to a central location, the carbon dioxide is removed, leaving a nearly pure methane that can be injected into a natural gas pipeline.

“We integrate what we do in the existing manure management system,” Black said, noting covered lagoon digesters work well with the state’s climate and flush barn systems.

“The results are very significant,” he said, pointing out the benefits of replacing diesel trucks with RNG. “The NOx reduction from a 3,000-cow dairy is nearly equivalent to removing 6,000 cars. A cluster of dairies could be the equivalent to removing over 40,000 cars.”

These projects would be difficult to achieve without the monetary support made possible by the current policies.

“Grant funding and the value that’s able to be achieved from the two credit systems – California’s low carbon fuel standard and the D-3 RINS from the EPA – create very, very strong economics helping create the significant development of dairy digester projects in California and across the country,” Black said.

Nick Elger, program manager for AgStar, pointed out projects do not have to be located in California to take advantage of the credits as long as they can show a connection in the pipeline to the state.

The longer these programs remain in place, and as other states look to create similar policies, it will bring stability to fund more projects on dairies and in other industry to meet the potential demand for RNG in North America.  end mark

Karen Lee
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Wisconsin dairy converts to RNG production instead of electricity

One year ago, Pagel’s Ponderosa Dairy and Dairy Dreams entered into an agreement with DTE Energy on a project to create renewable natural gas (RNG) from the farm’s existing anaerobic digester in Kewaunee, Wisconsin.

Built in 2008, the anaerobic digester is an integral part of the dairy to reduce the bacteria load in the biosolids used for bedding and to reduce odor. However, the original model to burn the gas to create electricity was no longer profitable.

“It just got to the point where the purchase power agreement was actually less than our cost of production in order to create electricity. It basically became a money pit, so we were just flaring the gas off,” says J.J. Pagel, owner of Pagel’s Ponderosa.

“When the opportunity came along to do the CNG [compressed natural gas] plant, we were interested because it’s another revenue stream on the dairy that basically is very little maintenance,” he adds.

DTE is leasing 1.5 acres from the farm where it constructed a CNG processing plant, just west of the parlor and 500 feet from the digester. The dairy is responsible for cleaning the barns and running the digester, just as it has been doing for the past decade. As the raw gas is piped from the digester to the plant, it is sold to DTE. They clean the gas, remove the hydrogen sulfide and carbon dioxide, then put it on a truck to travel to an unloading station in Newton, Wisconsin. There it enters a natural gas pipeline and is ultimately used for transportation fuel.

“We’re personally not selling the RNG,” Pagel says. “They are paying us for what they take out of the digester and take care of everything after the digester.”

“In a market where milk prices have been down and dairy farmers have been struggling, this has allowed us to create a revenue stream off of something we weren’t making money off of before,” he adds.

Plus, it allows the dairy to further its commitment to improving the environment. The daily production is 2,128 diesel gallon equivalents, equating to 13,000 cars taken off the road.

“We have tours that come through every day and hear about what we’re doing. That’s one thing we promote here at Pagel’s Ponderosa and at Dairy Dreams is what we’re doing for the environment, how good the digester does, and what the CNG plant does,” he says.

This new partnership allows the dairy to capitalize on its existing infrastructure and expand its social benefits.

“I think there’s a bright future for renewable natural gas. If it’s better for the environment, I think it’s a win-win for everybody,” Pagel says.  end mark

Amp Americas expands its investment in dairy RNG projects

Amp Americas launched the first dairy biogas-to-transportation fuel project in the U.S. back in 2011 at Fair Oaks Farms in Indiana. It has since expanded and grown its dairy projects to meet the growing demand for renewable natural gas (RNG).

“We brought two projects online in the last 12 months that more than doubled production,” says Grant Zimmerman, CEO of Amp Americas.

In October, its second biogas facility producing RNG from dairy waste became operational and started delivering RNG into the NIPSCO natural gas pipeline system to be used as transportation fuel. Located in Jasper County, Indiana, it converts 600 tons of manure per day generated from 16,000 head of milking cows from the Bos, Herrema and Windy Ridge dairy farms into 100% renewable transportation fuel.

Then, in February, an expansion at the original Fair Oaks Farms site increased its production by 30%.

“Together, we make about 5 million gallons of renewable fuel per year,” Zimmerman says.

“The reason we’re growing is because there is growing demand for ultra-low carbon transportation fuel,” he explains. “That growth and demand is led by California, and the movement is spreading to other states as well, including Oregon, Washington, New York and Colorado.”

State and federal policies incentivize these renewable fuel projects by establishing a credit market. “Our revenue from one of these things is more than 90% RIN and California LCFS credits,” Zimmerman says.

That’s the most valuable market, but they can also sell the renewable gas to make renewable power or as a renewable fuel that people are willing to pay a premium for over fossil fuel. There is interest in using it to fuel cruise ships and cargo ships as well as power generation in other countries.

“We create a huge benefit for our communities and our world by capturing and using – for a beneficial purpose – what would otherwise be waste, what would otherwise be harmful methane emissions. From a business perspective, the world recognizes that, and the right policies are in place to help make these things economically viable at the moment. We should seize that opportunity and take advantage of the right timing and go do as many of these things as we can,” Zimmerman says.

Their investors agree, as Amp Americas just announced it received a $75 million investment for new dairy RNG projects. The company is set to break ground on two additional Midwestern dairy biogas projects later this year, with operations to begin in the fall of 2020.

Looking to the future, Zimmerman says the next five years will be similar to where we are today in using RNG for vehicles, ships and electric generation. The light-duty fleet will likely switch to electric, but heavy-duty fleet vehicles will still require natural gas.

Longer-term, he sees the market evolving to use renewable methane as a feedstock for renewable hydrogen to power fuel cell applications both in transportation and stationary. Methane is also a feedstock for a variety of chemicals, such as fertilizers, plastics and other consumer products, and it could be replaced with RNG.

“I think over time, the market will evolve,” Zimmerman says. “The next five years will be pretty similar to what it looks like now. In another 10 or 15 years, it’s going to look very different.”  end mark

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