The Case for Smaller Scale Biogas Plants in the UK

Transcription

1 The Case for Smaller Scale Biogas Plants in the UK Introduction Anaerobic digestion (AD) is a technology that is suited to energy production from non-woody organics, at all scales from a single household (where it is widely used across the world) through to large-scale centralised merchant sites. This document is intended as a relatively high-level briefing paper, the purpose of which is to support the case for smaller scale AD on farms (and other applications), to highlight current barriers to appropriate farm-scale AD, and to suggest possible solutions. In the UK, there is considerable interest in the potential for AD and a recognition that we have lagged behind other EU member states in the development of a sector with great potential as a source of renewable energy. At a time when innovation should be driving renewable energy generation, development of smaller-scale AD is being restrained. The industry should work with Government to address a number of issues. DEFRA s Anaerobic Digestion Action Plan, developed in conjunction with industry, contains a number of actions focused on the wider development of AD. However, limited input into the strategy was provided from farmers or other businesses with an interest in smaller scale application of the technology (under 250kW 1 output). Hence the Plan is focused on larger digesters, while comments on smaller and micro scale units are limited to questions surrounding economic viability (Action 41). Current Government incentives encourage production of electricity and heat from AD, but do not really support small farm-scale slurry digesters (or local organic waste) where the main benefits lie in improved slurry handling, reduced water/air pollution and a significant reduction in the farm carbon footprint. The primary drivers for small community digesters may be combining livestock slurries with other locally available organic wastes - to recover energy, supply local users and make use of nutrients. Development of Small Scale AD To date, policy has supported the development of a growing large scale food waste AD industry and larger farm digesters. These rely heavily on food waste or energy crops. Until recently, there has been little support for development of smaller, onfarm AD which does not benefit from gate fee income. The involvement of major waste management firms has pushed the sector towards larger scale centralised units, sometimes at the expense of more environmentally appropriate solutions. Also lack of recognition of the energy value of a diverse range of potential feedstocks, which has limited efforts, often with innovative approaches, to use such materials. 1 The output of AD plants can be measured in kw of renewable energy generated the thermal value represents net heat output electric output from a CHP engine is about 35-42% of the thermal value. RG/AB/WRK Jan 2012 Page 1 of 10

2 The recent RASE report on farm scale digestion acknowledges that slurries form a significant part of the agricultural sector s carbon footprint. The majority of livestock farms have less than 150 cows (or LSU equivalents). Hence, they will require relatively small digesters (<300m 3 ) that will generate relatively limited renewable energy. If UK policy was to encourage a larger number of these smaller scale decentralised biogas plants, it would help reduce the environmental impact of farming (through reduced pollution from slurries, some local energy production and reduced fossil fuel derived fertiliser use), plus the carbon impact from the digestion of locally sourced organic wastes), resulting in a measurable impact on national emissions targets. Small plants should be encouraged to have access to diverse feedstocks that can found locally. There is inherently less risk in building local AD plants and generating energy closer to locations where it can be used. Also, if emission reductions, fuel oil displacement and environmental benefits were aggregated from multiple small AD units, the impact would be comparable to a centralised plant. See the table below for the potential CO 2 e savings from a slurry digester these would increase should co-digestion with locally available feedstocks (inc. food waste) be allowed (due to a reduction in food waste miles and the high GHG emission potential of such wastes). Potential Farm CO2e Savings (application of 150 kg/ha digestate (slurry only) 2 Methane Reduction (73%) 4,410 kg Fertiliser (18%) 1,120 kg Renewable Electricity (9%) 533 kg TOTAL CO2e Savings (max) 6,063 kg This vision for multiple small scale plants includes AD on farms (using primarily livestock slurry), plus institutions like prisons or military bases, as well as in communities, smaller towns and industrial sites should deliver further significant reductions in emissions at a local level. Also, in difficult economic times, uptake of large number of smaller AD plants will offer significant employment opportunities. Development of an indigenous renewable technology base (not just smaller modular AD units, but across other renewable sectors) will stimulate job creation and also help export earnings. The Case for Farm-Scale AD The report produced by the Royal Agricultural Society of England (RASE) 3 highlighted numerous benefits of AD for the farmer himself, including a reduced/nil reliance on fossil fuel fertilisers, as well as localised energy generation. AD also offers farmers a valuable source of supplementary revenue at a time when farm incomes are under pressure. However, it should also be stressed that carbon reduction and creating renewable energy are not the only benefits of AD. Its primary advantages on farms include slurry treatment and handling, nutrient recycling and pollution mitigation. There are a number of emerging UK-owned/based AD companies with innovative technologies suited to smaller scale applications. On-farm AD provides the greatest opportunity for these applications. Currently, many established technology providers offer larger AD systems and the existing renewable energy incentives do not favour small slurry-based systems. Also the UK-based production of innovative smaller AD systems is being restricted by the tendency of some financial institutions to favour continental technology providers (due to a perceived track record of plant builds). 2 ADBA R&D Conference, Nov 11, John Walsh, Bangor University presentation, theoretical maximum 3 A Review of Anaerobic Digestion Plants on UK Farms, report produced under the Practice with Science Group of the Royal Agricultural Society of England (RASE); April 2011 AMB-Sep 11 Page 2 of 10

3 Rural Britain has 17.1 million hectares of agricultural holdings, with around 222,000 commercial agricultural units, of which approximately 66,000 are livestock farms. 4 It is estimated that the animal slurries alone in these units contribute an estimated GHG potential of 3Mtonnes CO2 equivalent 5. This material has a methane potential of around 1 billion m 3 or 10 billion kwh of thermal energy (that can be used for heat or power) per year. This is currently unexploited. By adding a range of locally available organic resources (including grass, break crops or food residues), farmers could add considerably to the renewable energy they produce, as well as efficiently recycling local organics that are already spread directly to farmland or disposed of elsewhere. Annex 1 illustrates the potential for developing renewable energy production, as well as better slurry management and emissions reduction that could be delivered with lots of smaller scale (some under 500kW but most under 150kW thermal potential) onfarm AD plants. However, harnessing renewable energy potential by transporting cattle slurry to centralised AD plants is unlikely to be effective. For such lower strength materials, the energy content does not justify anything other than on-site digestion. At present, farmers are being put off from investing in AD due to a number of factors: Limited access to clear and independent information about the agricultural and environmental benefits of AD at farm scale, and to demonstration sites. AD is being typically presented to the farming community as a large-scale system (which need extra energy crops or wastes in order to be economic ) and not as slurry treatment systems, where the biogas can be used locally. Complexity of regulation creating additional expense (or fears over potential risk). Hence, farmers are encouraged to employ expensive consultants in order to help them through the planning, financing and permitting process. Issues with finance providers because AD is not seen as an integral part of onfarm activity or because for some it is still regarded a relatively unproven technology. Also the banks can require excessive performance guarantees. Lack of investment in smaller scale AD systems due to perceived lack of suitable small scale systems (this is being addressed by WRAP (supported by RASE) - through its On-farm AD Challenge, which is now backing projects. Farmers inability to access on-farm feedstocks without regulatory approval, including materials from other farms and local shops or food processing sites. The reluctance of some planners to work with farmers to develop on farm AD. There are still significant variations in knowledge of, and confidence in, AD amongst planners and planning is an expensive and time-consuming business. Also, handling of organic commercial wastes is not normally part of the remit of District Councils. They are often unaware of how much waste is privately handled and therefore can be reluctant to accept that local on-farm solutions need to be considered. They can regard transport of the feedstocks to AD sites as creating new vehicular movements. Not only are farmers put off by planning, but over-regulation is a major driver towards larger AD units. Farmers are pushed towards larger scale projects that bear these costs. The recent T24/T25 exemptions have begun to address this issue with a lighter touch for some AD configurations. However, under the T24 exemption farmers can be penalised (due to inclusion of pre/post-storage in the 1250m3 digester capacity limit) for using organic wastes of plant origin (energy crops grown specifically for AD 4 Agriculture in the United Kingdom, 2010, available from Defra website. 5 Introduction to RASE Review of Anaerobic Digestion Plants on UK Farms, by Prof Charles Banks. AMB-Sep 11 Page 3 of 10

4 are unaffected). The trend towards standard rules is helpful, but more could be done to support on-farm projects and encourage farmers to consider suitable sites. Government and its agencies can do more to stimulate AD on farms. If the UK is serious about the AD sector, then we must invest in smaller scale AD technology. To achieve this, Government and UK AD technology companies need to work together, to eliminate barriers that hamper the installation of smaller scale on-farm AD systems, but also to showcase what on-farm AD offers as part of low carbon farming systems. Farm-Scale AD Policy Proposals Annex 2 of this paper proposes some policy actions that should be taken to ensure that thousands of small AD plants can be built in the UK (as has already been done on the Continent and elsewhere). If DEFRA, DECC and the agencies can work with technology providers and other stakeholders to help deliver small scale AD plants on farms, in communities and in other sectors, it will ensure that AD has a much more prominent and wider role in decentralised renewable energy generation in the UK. It is clear that multiple small farm-based units will provide a range of farming benefits but, to date, policy support for AD has been focused on landfill diversion and the development larger food waste plants. This needs to be matched by an equivalent focus on smaller-scale plants. It is time for DEFRA and DECC to develop a strategy that will encourage farmers to develop AD as an integral part of slurry management. The key Issues that need to be addressed if smaller scale AD is to flourish include: Funding & Design: DECC & DEFRA should do more to support farm scale and community AD including technology development and better provision of information targeted at farmers that might be interested in farm scale plants. Planning: More must be done to facilitate planning for well-designed smaller scale plants that represent no more risk than other manure handling systems. Planning for farm AD should be no more onerous than for slurry storage tanks. Regulation: To free up regulation of small scale plants, DEFRA should consider a traffic light approval system to limit regulation for low risk feedstocks or ask the EA devise a new system that reduces the burden on small scale plants. Incentives: to provide stability and incentivise small scale AD projects with an under 100kW FIT band and carbon incentives for using digestate as a fertilizer. An option is to reduce the FITs upper limit to 2.5 MW, as the system is intended for smaller plants. (The authors will present this case as part of the FIT review). On-Farm Uptake: Provide better information to farmers on husbandry benefits of AD and digestate, as well as access to more AD demonstration sites. This is being addressed with the current WRAP initiative, but sites are required across the country so that more farmers can see AD working in their locality. Also it is important that farm-scale AD (whether slurry or crop based is fully integrated with husbandry systems on farm. For many farmers, a primary motivation to consider AD is slurry (or nutrient) management. However, current Single Farm Payment rules require preservation of permanent pasture and it would help with this objective if perennial green crops, used for AD, were included in a farm s permanent grassland area, enabling the conversion of such grassland into energy crops without penalty. Note: This document was produced by a group of authors that are active in the small scale AD sector and are keen to promote the use of British technology where possible, but above all to encourage onfarm adoption of smaller scale AD. We wish to recognise work undertaken by RASE, WRAP, NNFCC and others to promote smaller scale AD and also are very appreciative of the comments that have been provided on drafts of this report by a number of stakeholders, but particularly the CLA and the REA. AMB-Sep 11 Page 4 of 10

5 Annex 1 Background Data Table 1 - Holdings and Average Stock for AD (source: Defra) Number of holdings (thousand) Number of livestock (thousand) Dairy cows 1 to 149 dairy cows and over Total ,844 Energy potential using AD (slurry only) Ave no of dairy cows kwe Ave no of dairy cows on holdings with >=10 dairy cows Beef cows 1 to 99 beef cows , and over Total , kwe Ave no of beef cows kwe Ave no of beef cows on holdings with >=10 beef cows Total pigs 1 to 299 pigs to ,000 and over 1.3 3,643 Total , kwe Ave no of pigs* 416 3kWe Ave no of pigs on holdings with >=10 pigs* Broilers 1 to 99,999 broilers , ,000 and over ,576 Total , kWe Ave no of broilers 41,024 *** Ave no of broilers on holdings with >=10,000 broilers 104,141 *** Table 2 - AEA graph showing AD potential (from work by AEA undertaken for DEFRA) Key: Runs A, B, C, D, E, F seasonal housing (majority practice); AYH all year housing of livestock. Run A: Current capex, 11.5p FIT. Run B: 20% reduced capex, 11.5p FIT. Run C: 40% reduced capex, 11.5p FIT. Run D: Current capex, 23p FIT. Run E: 20% reduced capex, 23p FIT. Run F: 40% reduced capex, 23p FIT. AMB-Sep 11 Page 5 of 10

6 Annex 2 - Problems Problem Funding & Design: 1. Capital cost: Because of other factors noted below, there is little market incentive to develop low-cost, plug and play digesters which can compete against current farm slurry management systems. Consequently, a great deal of capital cost for current AD units is comprised of educating users/public/planners /regulators and complying with legal and construction regulations more appropriate to a waste treatment facility than the heated, mixed slurry store that it actually is. 2. Aversion to Risk: Reluctance of funders to invest in a novel technology, which they unfairly perceive to be problematic and unknown territory. 3. Plant Design: This is also a key issue that has been highlighted in the RASE report and it is a challenge that technology providers need to address by designing effective, smaller scale AD plants that are cheaper to build and easier to install on farms and other sites. Example/Case Study/ Evidence Supplier quote, Even though we know these tanks have been used for years as digesters, we feel we now have to adhere to CDM for the technology and the cost of compliance raises the cost of the tanks by at least 20% Banker quote, We know it works in Germany, but aren t sure if it works over here. Solutions/Actions 1. In part, this problem will resolve itself if the onerous level of planning, performance and permitting costs rule out everything as a feedstock except energy crops. There is some evidence of that happening with a number of low-risk small-scale AD costed to make existing FIT s look attractive. The challenge is to remove the appellation waste from a number of feedstocks that bring an increased permitting burden, such as inter-farm transfer of feedstocks (e.g. horse manure). For this reason, competitions like the WRAP Challenge are welcome as a lever into opening up regulatory amendments. Action DEFRA to help promote farm scale/community AD. 2. The WRAP/RASE Challenge is providing financial support to encourage the demonstration of new technology. This should address some of the other capital-cost issues (see solution below). Action - DECC & DEFRA to support Farm-scale AD Challenge. 3. Work with banks/lenders to develop a list of mutually acceptable criteria that a project has to meet to receive funding. Action publish informed lenders list that will support smaller AD - e.g. on the AD Portal ( 4. Ensure that people who are involved in advising farmers have got a track record of building digesters, to avoid inadvertently adding excessive and unnecessary cost. Action REA to task a couple of people, with support from a small working groups to write document for the NNFCC website RG/AB/WRK Jan 2012 Page 6 of 10

7 Problem Planning 1. Role of AD: Planners do not treat the AD plant as primarily the slurry / manure treatment system that it is; they treat it as a hazardous waste treatment facility. 2. Planning Risk: Without incurring significant upfront expense, farmers have no recourse if planning is refused, other than to keep spending money and re-submitting applications. Regulation 1. Feedstocks: materials fed into a digester are controlled more closely than fodder for livestock and the costs of allowing some high energy feedstocks in the digester are prohibitive. The process of licensing the feeding of these benign organic feedstocks into a digester is also expensive, ensuring that only larger digester operations can afford to do so. 2. Digestate: Currently, farm generated compost and manures can be sold/given to local gardeners or adjacent farmers. However, unless a great deal of expense is occurred, digestate, a much more benign and lower-risk product cannot be. These waste regulations should not apply to digestate from a digester using acceptable, benign, low-risk feedstocks. Instead, normal agricultural nutrient loading Example/Case Study/ Evidence Wrexham The vehicle movements associated with the digester are far fewer than those that would be associated with my farm if I ran an intensive dairy operation Kemble Farms I can feed things to my animals that I cannot feed to my digester. I can spread raw slurry, with all its attendant odour and pollution concerns on land where I am not allowed to spread digestate (unless I incur a great deal of extra cost). Solutions/Actions 1. Unblock the planning system for low risk plants. Action - Create a fast-track arbiter, possibly within DEFRA as deliverable of the current planning review 2. Deregulate farm scale AD. Action - Where more than 60% (by volume) of input to a digester is slurry / manure, it must be treated in the planning process the same as an equivalent slurry store. Small scale digesters could also be deployed under the permitted development scheme if they are largely slurry digesters which do not exceed the nutrient loading for the farm s land base. 1. Deregulate feedstocks for digesters. Where organic materials (crop/food processing waste/co-product) can be fed to animals, it should qualify for AD. Action - establish a traffic light system with three categories Green for crop feedstocks i.e. no permitting, Orange for low risk non-abpr feedstocks such as FYM, slurry or vedge waste or a lighter touch use of standard rules permitting approach with simple low cost auditing, Red for ABPR wastes e.g. mixed food waste with existing compliance. 2. Any of such audited feedstocks should be capable of reaching End of Waste Criteria (EWC) either by audit compliance or PAS 110. It is overkill to require non-meat content feedstocks to be pasteurised or considered in the same way as abattoir wastes. Action limit ABPR compliance to appropriate those ABPR wastes, where there is a clear health risk. RG/AB/WRK-Jan 12 Page 7 of 10

8 Problem and spreading regulations should apply. 3. Localism: As part of the localism agenda, small scale community digesters that service their local village should be able to take in food waste from the community and hence stimulate the development of local waste solutions with farms providing a service to shops and retailers within 5 miles of the farm. 4. Agencies: There is real concern that the agencies that regulate the industry (EA, SVS, H&S Exec and planners) do not operate to national guidelines and that there is too much local variation in the application of rules and this is blocking perfectly safe/ viable AD plants and inhibiting investment. EA/Animal Health field officers changed with implementing regs. need to adopt a more flexible approach based engineering criteria rather than form filling. The training of these enforcement and compliance officers should be improved and must have an engineering problem solving approach to accommodate varying systems within agreed outputs, for example dwell times will vary and must be included within the award of a permit. Example/Case Study/ Evidence At a recent meeting of industry digester builders and associated bodies, not a single person would say that they could confidently explain what licences and exemptions were needed for which feedstocks and what regulations surrounded digestate spreading and use. This is not atypical. Solutions/Actions 3. Deregulate land spreading of low risk post digestion residues. Action - Where an organic material is currently being spread to land, it should be able to go through a digester, provided farmers apply for the same license as would be required if the original material had been spread to land. 4. Information on feedstock availability and suitability for use in AD. Action - Create a definitive list of acceptable feedstocks (e.g. the CLA s Dutch list) should be published and allowed to be put into digesters, without any additional controls. 5. Encourage farm AD plants to take feedstocks from their community. Action Free up regulations for non-farm feedstocks (e.g. locally sourced- less than 5 miles provided that all residual digestate is applied on the farm where the AD plant is located 6. There is a serious need for a single, clear informative and educational website that lists the regulations. Action provide increased resources to NNFCC to upgrade site and do more outreach with farmers. 7. Government Agencies need clear guidelines on future development of AD and other renewable technology as part of a de-regulation process. Action Closer co-operation between DECC and EA - with a single body to be put in charge of rural renewables and the regulatory framework. A body (NNFCC?) is needed to provide advice / address grey areas, plus to include a remit for improved training of enforcement and compliance officers RG/AB/WRK-Jan 12 Page 8 of 10

9 Problem Incentives 1. Market Stability: Incentive levels have been in a period of flux, which has had the effect of reducing confidence from funders and farmers in the value of AD and willingness to invest. 2. Slurry management: Current incentives (FITS and RHI) encourage farmers to produce renewable energy, NOT to reduce pollution; therefore use of relatively low-energy potential slurries is being ignored as a feedstock for AD. There is still a place for higher value organics (inc. energy crops), to help minimise payback time and maximise ROI and incentives. While there is a role for energy crops, many farms lack the land to add energy crops to their rotation and locally available waste feedstocks offer a solution. If there is to be a major uplift in farm scale AD, an incentive band for under 100 kwe is required. This can be offset by reducing the 5MW upper limit for FITs - an extra band will increase interest in slurry only AD plants. Example/Case Study/ Evidence REA Press Release 22 Mar 11: Gaynor Hartnell said, The solar experience has been sobering and has exposed worrying failures in our approach to new technologies and green growth. Worcestershire farmer, We are waiting to install a 27kW generator but are hoping that FITs for small-scale AD can be re-visited so they are more in line with other renewable technologies Solutions/Actions 8. Propose a rebate on regulatory compliance as an interim. Look at rebating the cost (by not charging it in the first place) based on size and feedstock, so a sub 50Kwe crop plant would be able to gain an 80% rebate on PAS110 and ADQP, a 100Kwe by 70% and so on. This would remove the high percentage annul cost of continued compliance. Action look further at whether more can be done to exclude farm AD from regulation for lower risk digesters. 1. Incentives must be guaranteed for the period for which they were originally intended. If the uptake of AD in the small scale sector is still not sufficient, other short-term incentives should be considered for that sector alone. See above. Action look at scope for small scale incentives, with a new FIT band of under 100kW output. 2. Explore supplementary CO2 reduction incentives for slurry AD. As well as the current incentives NPK diversion credits could be given to compliant farms that displace fossil derived fertilisers (i.e. nitrogen). This can be calculated as carbon incentive to users of digestate. It would need to be based on analysis and tonnage returned to land. This should strike a chord with Government plans to manage carbon in the UK and to introduce carbon labelling in areas as diverse as construction or white goods, This will also mitigate against global fluctuations in availability and price of P & K. Action look at carbon based incentives for farms or add a new FIT band RG/AB/WRK-Jan 12 Page 9 of 10

10 Problem On Farm Uptake 1. Investment Drivers: AD is incentivised as a waste handling or renewable energy process rather than as a holistic slurry manure management, nutrient recycling, pollution control and renewable energy system, 2. Feedstock Evaluation: Farmers need to have a reliable rule of thumb tool to estimate biogas production, plus fertiliser replacement value, of their feedstocks ideally with a range of benchmarked outputs Example/Case Study/ Evidence Recent sales enquiry, I have a small farm with 10 cows, 20 chickens and a small vegetable plot. Can I use AD to heat my house and a small poly-tunnel? Solutions/Actions 1. Stress value of AD in on-farm management of slurry. Action Commission NNFCC to advise on AD s role in land management 2. A simple tool is required to predict gas potential for a wide range of feedstocks, Action Set up a simple rule of thumb calculator to estimate biogas production for common feedstocks, based on an existing system like the Dutch or German VDI list. 3. A definitive list will also provide a base calculator for some permitting categories or incentives and the permitting initiatives suggested above. Action Making the Anderson calculator more accessible and easier to use would improve decision making. 4. There is a broad link between biogas yield, permitting category and potential emission reduction through digestate use etc. Could this be linked to a gas yield calculator, to offer simple assessment of overall benefit of any proposed AD plant- except cost, which will remain commercial. If approved data is centralised, there will be less risk of farmer customers being confused or misled. Also, competition will drive delivery to the more effective systems and reduce perceived risks and exaggeration of rewards. Action establish systems for farmer education working with farming bodies. RG/AB/WRK-Jan 12 Page 10 of 10