Gary Floyd is an alumnus of Georgia Tech and an industrial segment manager for Georgia Power Company. He serves as a member of the Georgia Tech Research Institute’s Agricultural Technology Research Program Advisory Board.
In the Spring 2008 issue of PoultryTech, an article on heat recovery was written to provide information on the potential savings from taking waste heat from refrigeration systems. The last two paragraphs of the article also pointed out the potential reduction in greenhouse gases. Waste heat recovery is still a win-win solution today, but I would like to discuss other opportunities to invest in clean energy technologies that support renewable resources.
Anaerobic digestion is one of those opportunities. This digestion process occurs naturally through which organic matter such as manure, feed spills, poultry wastes, and crop residues are fed, heated, and mixed. During the process, in the absence of oxygen, the anaerobic bacteria thrive by consuming the solid waste resulting in the release of methane and carbon dioxide known as biogas. The biogas can then be used as fuel for boilers, which can offset the cost of natural gas usage.
Sanderson Farms has installed a digester at one of their poultry plants that captures methane gas from the anaerobic lagoon that treats the plant’s wastewater. The captured gas is piped back to the plant and then used to fuel the gas boiler. The plant, according to Sanderson Farms, has reduced their natural gas usage by 80 percent.
Biogas itself is typically composed of 60 percent methane and 40 percent CO2. Natural gas is 97 percent methane. There are technologies that can remove CO2 from the biogas and then convert it to renewable natural gas, enabling it to be injected into a natural gas pipeline for resale.
The technology to upgrade biogas is becoming more popular because it does not have the heat loss and emission issues related to an internal combustion engine. And, since the final product is natural gas, it can be moved efficiently using the existing natural gas grid. Finally, unlike natural gas, which contributes gas emissions to the atmosphere, the combustion of upgraded biogas actually reduces greenhouse gas emissions to the atmosphere by displacing natural gas.
Electricity can also be produced from biogas using internal combustion engines and generators. Plants that install these systems may be able to off-set their plant electrical energy costs and be eligible to sell back to their electric grid provider. Two types of biogas engines are available: diesel and gas. Gas engines are designed to burn a gaseous fuel instead of liquid. In a diesel biogas engine, 5 percent of the produced energy will come from diesel oil, which will be used as a pilot fuel to ignite during combustion.
Biogas generators are relatively simple systems, but their efficiency is close to 40 percent at best when converting the biogas to electrical energy. The remaining biogas is converted to heat and noise. The heat can be recovered and used for other plant processes.
Gas turbines are used in the electric utility industry to convert natural gas into electricity; however, biogas, which has a lower BTU value than natural gas, is wet and corrosive, and therefore, not the best fuel for the turbine. Also, the biogas would require additional conditioning, which makes it not economically feasible.
Economics should be considered if an anaerobic digester is to be used solely to produce electricity or off-set a plant’s electricity usage. Georgia Power, a subsidiary of Southern Company located in the Southeastern United States, will purchase the energy produced from renewable generation that meets the Federal Energy Regulatory Commission (FERC) requirements to be a Qualifying Facility (QF) (greater than 100 KW, less than 80 MW). The payment for energy is calculated on an hourly avoided cost rate.
The avoided cost rate represents the value of the electricity the utility avoids generating or purchasing. When a poultry plant delivers electricity from its generating system, the electric utility will reduce the equivalent amount of electricity generated at its most expensive operating unit. The costs avoided consist of the cost of fuel needed to produce that electricity and unit’s operation and maintenance costs. This is the energy component of the electric utility’s avoided cost.
The electricity supplied by the poultry plant also contributes to the electric utility’s system reliability. As demand (KW) grows in the electric provider’s service area, the reserve margin decreases and at some point the electric utility will need to add capacity to meet demand. The poultry plant’s contribution to the electric utility system allows the utility to defer the addition of capacity.
A component of the avoided energy rate gives credit for the generation and transmission capacity that is avoided. And, when Georgia Power has a capacity need, QFs can bid their capacity into Georgia Power Requests for Proposals (RFPs) and may receive payment for their capacity.
Because avoided cost depends on system operations and needs, the avoided cost for each utility is unique and the amount determined to be a utility’s avoided cost changes over time. Georgia Power purchases energy at the hourly avoided cost rate, currently forecasted to be around 5.6 cents per kWh in 2012.
Anaerobic digesters are complex biological systems requiring careful planning and operation. Well-designed systems require considerable capital investment and operational costs, but there are tax credits and incentives available.
Incentives in the form of federal and state tax credits, accelerated depreciation, and low-interest financing may be available. The Energy Policy Act of 2005 increased the business renewable investment tax credit to 30 percent and is not set to expire until 2016. Another incentive available is Georgia’s Clean Energy Property Tax Credit that provides up to a 35 percent tax credit for renewable generation assets. This tax incentive is reaching its upper limit, so contact the Georgia Environmental Finance Authority (GEFA) to find out if funds are still available (www.gefa.org/index.aspx?page=423). The Database of State Incentives for Renewables and Efficiency website provides all current state and federal incentives available.
Finally, electricity through “Green” energy programs may be another investment opportunity for poultry plants. Georgia Power’s Green Energy Program enables industrial customers to support the growth of renewable energy resources in Georgia. The Large Volume Purchase Option offers customers the opportunity to buy Green Energy at a lower, customer-specific price. This option is available to businesses that wish to purchase a minimum of 90,000 kWh (900 blocks) of renewable energy per month.
Customers must purchase at least 400 blocks of either Standard Green Energy ($3.50 plus tax per block) or Premium Green Energy ($5.00 plus tax per block). In addition, they must purchase at least an additional 500 blocks of renewable energy under the Large Volume Purchase Option at a reduced price.
Georgia Power will contract with customers to determine the price, quantity, term, and source of the additional certified Green Energy. Also, customers who act as a single brand under common ownership or under common control via a written franchise agreement with a single controlling entity may aggregate their load for the purposes of participating under the Large Volume Purchase Option.