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Ontario’s Green Energy Act and the Ontario Power Authority’s new Feed-In Tariff (FIT) program that accompanies it, is helping give new impetus to the long-held dream of some Ontario farmers of turning manure into a money-making part of the farm.
“We’ve been chasing biogas for a number of years,” said Jake DeBruyn, an engineer for New Technology Integration with OMAFRA, speaking in January at the Grey-Bruce Farmers’ Week’s dairy day. The Green Energy Act has helped reduce the tangle of red tape producers have had to manoeuvre through in the past. Meanwhile FIT provides a guaranteed revenue source for 20 years to help farmers amortize the cost of their investment.
“They’re not banking on a grant or a future opportunity,” DeBruyn explained.
The FIT price for electricity generated from biogas pays 19.5 cent per kilowatt hour, not quite the startling 80.2 cents paid for small solar installations but still well above the 11 cents we normally buy our electricity from the grid for. Of course the advantage biogas has over solar is that it can produce power (and therefore income) 24 hours a day, not just when the sun shines, and wen the wind doesn’t blow, unlike wind turbines. All on-farm systems must be nutrient management systems in order to qualify for the program.
The Green Energy Plan also makes it easier for farmers to accept off-farm by-products such as used cooking oil, that when added to a manure-based system can increase the gas production.
Aside from a few adventurous pioneers, biogas has remained a dream as a source of green energy in Ontario up until now. Meanwhile in Germany there are 4,000 biogas systems in operation.
Until the FIT program most of the biogas projects in Ontario were assisted by the Biogas Systems Financial Assistance Program. In all, 21 projects were funded. Seven of these are operational.
To help farmers get a sense of the potential for biogas DeBruyn gave a few examples of systems currently working in Ontario.
Paul and Fritz Klaesi had experience with producing renewable energy in their native Switzerland before coming to Canada and starting dairy farming near Cobden in the Ottawa area. In 2003 they set up a small biogas plant on their farm, using net metering to feed electricity into the grid and reduce their $25,000 a year in electrical charges. The biogas fueled an engine which powered a 50 kw generator to create the electricity, enough to supply the needs of 50 homes. The heat created by the engine was captured and used to heat the anaerobic digester tank to keep the gas generation going (it needs to remain at 40 degrees celsius), as well as heat the water needed for the 140-cow operation. It cost $250,000 to set up the system.
The brothers worked out an agreement with a waste management company to accept the used grease the company picked up from restaurants. The put the grease through a pasteurization process before adding it to the mix with the liquid manure. They extended the cover over their manure tank to cover the whole tank instead of just a small portion as they had done previously. They put in a 500 kilowatt system that now turns out electricity 24 hours a day, seven days a week.
Donnandale Farms of Stirling, put in a 500 kw biodigester system in late 2008 making use of manure from their 300-cow milking herd and 600- head total. The family operation makes use of a Harvestor tank as a digester and has two 250-kw co-generation systems producing electricity and heat for use on the farm.
Laurie Stanton’s 750-cow dairy farm at Ilderton near London utilizes a system from a Utah company and large vertical tanks. Raw manure is introduced at the bottom of the tanks. As well as producing electricity and heat, the Stanton’s biodigester will help reduce a major cost on the farm: bedding. After going through the digester, the effluent will be processed through a separator with the liquid being spread on fields as fertilizer and the solids being dried to a matted, grey-coloured material that resembles peat moss that can be used for bedding for the cows.
While most of the plans use the gas output of the biodigester to power a generator to make electricity, the gas produced is really the same as the natural gas used to heat people’s homes and power industry. There are companies that foresee scrubbing the gas produced and feeding it into the natural gas distribution system. Before this can be done the same battle will have to be fought for access to these pipelines the small electrical generators fought in getting access to the electrical distribution system.
While the Green Energy Act has opened doors for farmers to produce power from their manure, there are still hurdles, DeBruyn explained, while going through the economics of setting up a system. He based his calculations on a 170-cow dairy herd, producing 7,700 cubic meters of manure generating 250 kw of power. The model operation would get 25 per cent of the fuel for the digester from off-farm products such as fats, oils and grease, charging $22,000 a year in tipping fees. (Using more than 25 per cent off-farm fuel for the process can be tricky, he said. In Europe farmers are boosting gas production by feeding corn silage into the mix.)
This size of operation would generate revenue of $400,000 a year from electrical sales. Operating costs would be about $60,000 a year. Interest costs on the money borrowed to finance the system would be about $70,000 a year, leaving about $200,000 a year to pay back the $2 million capital costs (DeBruyn felt this was a relatively high estimate of the costs).
The net profit is about $65,000 a year, he estimated. This profit can be boosted because there’s an accelerated tax write-off for green energy equipment.
“When you look at all the figures the system comes out profitable,” he said.
However for a unit with fewer than 170 cows, it’s hard to make the system profitable, DeBruyn said.
“You can do it if you keep your costs really low,” he said.
Access to the electrical grid has been a problem for new energy projects, especially in western Ontario but small projects under 250 kw aren’t restricted. Still, he reminded would-be electrical generators, you have to pay for all the improvements that need to be made on your own property in order to connect to the grid.
To assist farmers who might be interested in becoming biogas producers, OMAFRA brought in experts from IBBK, an internationally recognized group for their expertise in anaerobic digestion, to develop and deliver the Ontario Biogas Systems Operators’ Course, for owners and operators of farm and food biogas systems and people directly involved in biogas system development. The four-day course, held in St. Catharines last November and Belleville in January, taught day-to-day operation guidelines; testing methods; biogas system safety and monitoring procedures to optimize performance.◊
MANURE INTO MONEY: biogass production on the farm
Ontario’s Green Energy Act and the Ontario Power Authority’s new Feed-In Tariff (FIT) program that accompanies it, is helping give new impetus to the long-held dream of some Ontario farmers of turning manure into a money-making part of the farm.
“We’ve been chasing biogas for a number of years,” said Jake DeBruyn, an engineer for New Technology Integration with OMAFRA, speaking in January at the Grey-Bruce Farmers’ Week’s dairy day. The Green Energy Act has helped reduce the tangle of red tape producers have had to manoeuvre through in the past. Meanwhile FIT provides a guaranteed revenue source for 20 years to help farmers amortize the cost of their investment.
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