The Biogas Opportunity


Published In: EnergyBiz Magazine March/April 2011


BIOGAS IS IN THE STARTING POINT of an exponential growth curve, according to a white paper from the Global Intelligence Alliance. The United States could follow the global trend with a greater number of biogas to energy facilities if policy and economics were to align.

Currently, Europe and other parts of the world are rapidly utilizing anaerobic digesters to create a distributive network of biogas electrical energy, heat, pipeline-quality gas and even compressed natural gas vehicle fuels. The United States is still slowly coming out of the biogas energy opportunity starting line. The Environmental Protection Agency's AgSTAR Program projects that the United States could have upward of 8,000 anaerobic digesters producing biogas on farms across the land, with a total generating capacity of around 1,500 megawatts, which is about 2 percent of all electricity.

The problem is that the United States has only 151 anaerobic digesters on-farm. Wisconsin leads all states with more than 30 on-farm biogas systems. Biogas remains a relatively untapped resource in the United States due to concerns with economic viability and a lack of policies to catalyze growth. Globally, 75 percent of biogas potential lies in anaerobic digestion of agricultural crops, by-products and manure, while 17 percent is in municipal waste and industrial organic waste, and another 8 percent is in sewage and wastewater treatment. One bottleneck to exponential growth is the cost to upgrade technologies needed to boost biogas to the same quality as natural gas, and the current low price of natural gas.

To better understand how the United States and Wisconsin can catalyze the development of more biogas energy, a delegation of University of Wisconsin - Madison graduate students and some energy policy experts traveled to Germany last September to study the global biogas energy leader. The fact-finding team wanted to know what political, social and economic factors contributed to Germany developing more than 5,000 biogas plants, the majority being on-farm plants, in only about a decade.

The explosive growth in the German biogas industry can be attributed to a policy that guarantees electric grid connection and a premium rate for the renewable electricity supplied. If the United States could jump from 151 anaerobic digesters on-farm to 8,000 farms, it would create significant economic and environmental benefits. The research shows that the agriculture sector will realize environmental and economic benefits from reducing odor, increasing nutrient management flexibility and reducing greenhouse gas emissions, combined with revenue from energy generation sales and potential sales of by-products such as animal bedding. Additional business sectors that can use digesters include landfills, beef-finishing lots, poultry and hog operations, and industrial-scale operations including food processing and cheese-making facilities.

Taking a waste product and making homegrown renewable energy in Wisconsin and the United States just makes sense. On the local level, food processing and dairy agriculture are two of Wisconsin's signature industries generating billions of dollars in state revenue and providing key jobs. Food processing and dairy farms are prime locations for anaerobic digesters. In the United States, some 30 percent of food is thrown out and taken to costly landfill operations. Food waste can prime the pump for anaerobic digesters to produce more biogas energy.

The UW-Madison delegation that went to Germany saw all kinds of creative business partnerships and innovation at the biogas facilities. The team was convinced that if the United States were to follow the lead of Germany and other parts of the world, we could create thousands of new jobs from more biogas energy plants, help reduce waste buried in landfills and clean the environment, but it will require policy-makers to show greater leadership here at home.

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Anaerobic digesters

There are also numerous digesters on dairy farms in New York. Without grant incentives and attractive utility buy-back rates, the payback on these huge investments is very long. The distributed generation aspect of these facilities needs to be considered. Many large dairy farms are located on remote distribution feeders. Farm electric loads are growing rapidly, which stretches the capabilities of rural substations and distribution lines. On-farm digesters and biogas electricity generation can handle much of the farm load, taking the strain off the utility system. The reliability of these generation systems is improving, and we should make a concerted effort to encourage many more digesters. I have found that the US has been working for years trying to reinvent the biogas production technologies rather than adopting proven technologies from Europe. The great world wars forced the Europeans to develop these technologies many decades ahead of us, and they continue to make refinements that we can adopt in America. Wisconsin may have the most digesters, but other states and land grant universities are heavily involved in the development and proliferation of biogas production. Cornell University has also sent groups to Europe to study their successes and to transfer that knowledge to the industry in New York.

Fact-Finding Visit to Germany

So the the fact-finding visit to Germay determined that the "explosive growth in the German biogas industry can be attributed to a policy that guarantees electric grid connection and a premium rate for the renewable electricity supplied." One didn't need to visit Germany to relaize that. Basically, a farmer or whoever contructs and operates a biogas facility is guaranteed that the enregy generated by such a facility will be taken and that the facility owner is awarded a premium rate for the delivered electricity! Germany is providing a rather attractive economic incentive to connect and operate biogas facilities. The article doesn't quantify or detail the specific value of these incentives. Are there other incentives such as tax relief or grants to build the facilities? Again this is not revealed in the article. The basic question remains: Are this incentives offered by the Governmemt overshadowed by the other economic and environmental benefits described?