South African vs German South Africa Biogas sector: A comparative analysis

Transcription

1 South African vs German South Africa Biogas sector: A comparative analysis Gracia Munganga Project Engineer/Business Development Anaergia Africa South Africa

2 Presentation Overview 1. Introduction to Anaergia 2. Overview of German biogas sector 3. Overview of South African biogas sector 4. SA biogas industry challenges 5. Closing remarks

3 1. Introduction to Anaergia

4 Mission: To be the global leader in providing sustainable solutions for our clients by converting wastewater and organic wastes into beneficial reuse products such as energy, clean water and fertilizer. Anaergia (pronounced ana-er-gia) is a name derived from the core technology of our company s solutions to sustainability anaerobic digestion.

5 Established on a solid foundation Founder Dr. Andrew Benedek, Executive Chairman and Chief Technology Officer Professor of Chemical and Civil Engineering, specializing in water and wastewater Founder of ZENON Environmental Inc. which developed breakthrough technologies. Company sold to General Electric. Proven track record of developing and improving technology in environmental sector Clear vision that the world requires new solutions to manage challenges created by urbanization and climate change

6 Opened US Headquarters in California Opened Global Head Office in Ontario, Canada Opened Asian Headquarters in China and Singapore Office Opened Office in South Africa Acquired UTS Biogastechnik Opened Offices in UK, Spain and Italy Approved $40M Plan Research & Development and Manufacturing Strategic $47M Capital Raise Completed UTS Biogastechnik GMBH Established 1992 Market leader Significant R&D investment Core anaerobic technology Equipment manufacturer Proven German technology Projects Under Development 2015+: Maui Resource Recovery Facility Eastern Ontario Bioenergy Centre Bridgeport Bioenergy Facility Rialto Biosolids & Energy Facility Cape Dairy Project, South Africa

7 Company s Footprint Over 250 global employees Over 20 years of experience Engineering and design Equipment and system manufacturing Service and operations Focus on R&D with dozens of global patents Delivered over 220 turn-key facilities, Over 355MW of renewable power in production Projects in over 20 countries South African office established in 2014 (and daughter company of the Anaergia GmbH) Sales office, with technical support from Germany

8 Key Market Sectors Served Municipal Wastewater and Water Reuse Converting wastewater treatment plants into resource recovery facilities. Infrastructure retrofit Biosolids and digestate management Co-digestion Renewable energy, gas, and heat for operations Municipal Solid Waste (MSW) & Source Separated Organics (SSO) Harnessing the full potential of organic waste from municipal solid wastes (MSW) and enabling diversion from landfill. MSW pre-treatment Extraction of organics diversion Renewable energy, gas, and heat from organics High grade fertilizer Agricultural and Commercial/industrial wastes Secure, long-term solutions for organic waste management and regulatory compliance. Nutrient management High grade fertilizer Renewable energy, gas, and heat for operations

9 2. Overview of the German biogas sector

10 German biogas sector-snapshot Biggest/Most established biogas market in the world Collective turnover: 7.2 bn, jobs: 39,000 people Wagner, 2015 No. biogas plants: 9035 Capacity installed: 4 GW (~3.5-5% of the electricity generation) Wagner, 2015 Avg size of plant: ~440 kw Feedstocks: Crop to fuel: corn Wastes: Agricultural e.g. manure organic fraction of municipal solid wastes (OFMSW/SSO) Municipal solid wastes (MSW) Wastewater

11 German biogas sector: market context Context Comments 1 Management of municipal solid waste (MSW) and organic wastes 2 Renewable Energy Resources Act (EEG, 2014) RE targets 3 Environmental compliance process -90% diversion from landfill, Separation at source -Ban of landfilling of organics i.e. <5% Total Carbon; Fischer (2013) -High gate fees (~ 100/ton for MSW), European Environment Agency (2013) 40-45% by 2025 electricity production, 55-60% by 2035 & 80% by 2050 <500 kw: ~3 months >500 kw: 3-6 months 4 Market for digestate -Regulatory framework which allows the sale of fertilizer -Storage requirement in winter: 4-5 months /ton (Barth, 2011) 5 Financing kfw: up to 100% of the funding, term (5, 10 and 20 years), 3 first years repayment free Standard: R25 mil- (100 kw-2mw) Premium: R10 mil for heat, biomass (<100 kw) Storage: R10 mil for PV with battery

12 German biogas sector: market context (2) Feed-in tariffs (German Energy Blog 2015) EEG years offtake -Grid access priority -250 plants/yr EEG Bonus for fermentation plants -Bonus for manure -340 plants/yr EEG Bonus for energy crops -Bonus for heat -450 plants/yr EEG MW cap -Reduced tariffs -230 plants/yr EEG (2014) 150 kw 13, 66 cents/kwh 500 kw 11,78 cents/kwh 5 MW 10, 55 cents/kwh 20 MW 5,85 cents/kwh Bonus EEG Bonus for manure -Technology bonus for innovation -Gas reprocessing bonus -CHP bonus plants/yr Small manure plants Waste fermentation plants 15,26-23,73 ct/kwh 15,26 ct/kwh

13 German biogas sector: Challenges Amendments to the Renewable Energy Resource Act i.e. EEG (2014) Removal of some bonuses/incentives Energy crops and large scale manure Biogas upgrading Reduced feed-in tariffs 15 % overall decrease from 2012 tariffs Basic tariff degression~ 2% each year, German Energy Blog (2016) Capacity allocated to biogas capped at 100 MW per year Saturated market No. of new plants reduced from 1000 to ~230

14 3. Overview of the South African (S.An) Biogas Sector

15 South African (S.An) biogas sector -Snapshot No. biogas plants: ~300 only Capacity installed: Biogas to electricity: ~14 MW (1.1 MW Johannesburg Northern waste water works) Avg size: Mostly rural (biogas for cooking/lighting) with ~10 commercial plants (i.e. >~70 kw) Feedstocks: No crops Waste based i.e. Municipal solid wastes (MSW)/Organic fraction of municipal solid wastes (OFMSW) commercial/industrial wastes i.e. SSO agricultural (manure, abattoir) Wastewater

16 S. An biogas sector-market context 1 Management of municipal solid wastes (MSW) 2 Renewable Energy framework Comments -Waste diversion targets (i.e. 25% by 2019, NEM:WA, Act 59 of 2008; No 26 of 2014)-not necessarily enforced outside of metros -Limited pilot separation at source programmes (~90% of waste landfilled) -Low landfill gate fee: R /ton for MSW (~ 9-26/ton) Renewable Energy Independent Power Programme (REIPPP) from the Department of Energy Biogas : 60 MW, (90 c/kwh, currently being reviewed-no project awarded to date) Biomass: 150 MW (R1.4/kWh) Landfill gas: 40 MW ( 94 c/kwh) 3 Use/Sale of Digestate -No current regulatory framework -private agreement between developer and farmer -Disposal of digestate: liability/cost

17 S. An biogas sector-waste to landfill 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Sweden Denmark Germany France Netherlands United Kingdom Canada South Africa Landfilled Recycled Waste-to-energy Composted

18 S. An biogas sector-market context (2) Comments 4 Availability of feedstock Municipal solid wastes (MSW) -Governed by the Municipal System s Act (No 32 of 2000) and Municipal Finance Management Act (No 56 OF 2003). Required public procurement programme for contract > 3 years) 5 Financing -Industrial Development Corporation 50-70% of the funding -Department of Trade and Industry Grant e.g. MCEP grant -Various of donor funding in grants and/or soft loans 6 Access to the grid/wheeling agreement 7 Environmental Authorisation/compliance No standardized framework from NERSA. Pilot projects at municipal level (e.g. CoCT, City of Tshawne) 6-18 months (can be longer)

19 S.An biogas-municipal procurement example GreenCape (2014) 3-7 years process

20 4. South African biogas sector: challenges

21 South African biogas-challenges Project development 1. Licensing and regulatory requirements cumbersome and lengthy conflicting treshholds between different legislation (e.g manure) 2. Mixed organic waste streams as largest feedstock MSW availability pre-treatment with cost implications 3. Lengthy process to secure feedstock from municipalities (3-7 years) 4. Connection to the grid outside of REIPPP for private users through wheelingchallenging Business case 1. Bulk price of electricity in SA historically low (70-90 c/kwh, though changing) 2. Limited appreciation/value adding of multiple benefits of biogas e.g. fertilizer value, carbon mitigation 3. Financial viability challenging due to low returns/long payback periods 4. REIPPP has not boosted industry as expected -Cost of complying a bid too high -90 c/kwh ceiling too low -Size cap: 1 MW vs avg 400 kw plant in Germany

22 South African biogas-challenges (2) Not enough commercial projects in operation to give confidence to the market Some of the projects operating experiencing challenges Suboptimal operation and underperformance (biogas yield and electrical output) Uncertainty of supply of suitable wastes Limited SA experience with commercial biogas (i.e.technical/biological/process) & availability during crisis

23 South African biogas -challenges (3) 1. Mechanical problems -Adequate design and sizing of equipment: -Feeding system, esp. plants receiving mixed e.g. clogging of substrate line -Mixers to avoid pressure build-up, maintain constant reactor conditions -Quality of equipment & reliable civil works (e.g. tanks that leak) 2. Process Adequate calibration and seeding of biological start-up Adequate composition and loading rate of feedstock (C/N ratio) Maintain constant OLR and HRT 3. Adequate monitoring to identify red flags -Biological parameters (seeding and adaptation of adequate bacterial population for feedstock; monitoring of inibihition from NH3 & H2S, measuring of VFAs, ) -Other process parameters (Temperature, ph for optimal microbial growth) -Instruments and control 4. Training of operators, e.g. -Availability of key staff: 24 h (close to site) -Isolate inadequate feedstocks -Routine check and record keeping Understand mechanical equipment and process parameters

24 5. Concluding remarks

25 South African biogas sector outlook Local support structure for biogas industry Establishment of an industry association (i.e. Southern Biogas Industry Association, SABIA) in 2012 Support from the German Cooperation Agency (GIZ) Support from other national dpt: Department of Energy (DoE), National Treasury (IPP), Department of Environmental Affairs (DEA), Department of Trade and Industry (dti) Milestones/Positive development Awareness at national level of the benefits of biogas for SA Simplification of environmental compliance (GIZ) e.g. Norms and standards for biogas industry Basic Assessment rather full EIA (18 6 months) Revision of biogas tariffs in REIPPP (to be confirmed) UNIDO (3 year project to support the development of biogas in SA

26 Anaergia s positioning in SA/Africa biogas market Anaergia has therefore positioned itself as able to provide full Engineering Procurement Construction (EPC) rather than developer Over 20 years of combined experience Key staff qualities/experience: Engineering design biological/process commissioning Operation and maintenance Key own equipment supply Waste processing/sorting equipment e.g. organic extrusion press (OREX, BIOREX, CLEANREX), wind sifter, roller screen, lamella screen, etc. Biogas plant: feeding system, mixers, service boxes, pumps, solid-liquid separators

27 Anaergia s RDF production

28 Municipal solid wastes (MSW) to biogas- PFD example

29 Many thanks! Questions?

30 Anaergia Africa (stand #L2, Hall 4) Gracia Munganga Tel: Cell: E- mail:

31 Reference List Reference List Wagner, L. (2015). Trends from the use of biogas technology in Germany. Available: file:///c:/users/g.munganga/downloads/03_fvb_wagner_biogas%20in%20germany%20(1).pdf. Last accessed May Barth, J.. (2011). Markets for compost and digestate in Europe - Situation, requirements, future development. Available: %20Barth.pdf. Last accessed May

32 Back up slides

33 Anaergia s AD equipment related Anaergia s AD related equipment

34 S.An biogas-municipal procurement example Online regulatory tool created by GIZ, GreenCape and the Department of Environmental Affairs,

35 Anaergia s Aproach to Waste Management Wastewater Biosolids Renewable Power Source Separated Organics Renewable Gas Municipal Solid Waste Food Processing Waste Agricultural Waste Integrated Solutions Fertilizer Reuse Water

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37 Biogas tariffs EEG (2014) EEG (2012)

38 Biogas tariffs (2) EEG (2009)

39 Biogas tariffs (3) EEG (2009)