Keys Keys to to Successful Successful Operation Farm Based Digesters g

Transcription

1 Keys to Successful Operation Farm Based Digesters

2 Energy Systems Group Founded in 1994, ESG is an ESCO Energy Services Company Successfully delivered over $1.2B in energy projects Subsidiary of Vectren Corporation (NYSE: VVC) Develop, design, build and operate Central Energy Plant and Renewable Energy Solutions Focused on self funding renewable energy projects Biogas specialists

3 ESG Capabilities and Experience Extensive Supply & Demand Side Experience Develop, Design, build & operate Performance guarantees Comprehensive Renewables Capabilities Bio Gas Expertise: direct, medium & high BTU Biomass / Waste to Energy Solar, Wind, Geothermal Heat Pumps, etc. CHP / Central Steam Systems VA Medical Centers College & University it Traditional Building Systems Self funding ECM Energy Service Performance Contract Live Oak Landfill Biogas Project North Chicago Energy Center

4 Anaerobic Digestion Business Business and Process Flow Cycle Complex system (AD) set within a complex system (modern CAFO operation) Seek and implement complementary operating strategies Simple concept: deeply integrated solutions

5 ESG Development Plan Motivations, Interests & Assumptions Viable farm based model suitable for third party funding Third party tax equity and debt funding No cash investment or debt from farm partner Manage business and operating risks Managing operations for value Energy driven business Environmental dimension carbon credits Substrates and additional by-products Defining success Financial measures Operating measures

6 Farm Based Digester g General Concept

7 Key Elements of Success Development, Design and Operation Development Responsibilities defined and documented Contract precision & flexibility Design control Practical Operations feedback to design Operation Process integration & control Performance measurement Feedback systems

8 Preparation for Success Farm Partner Profiles Dairyland Farms, New Franken, WI 3 rd Generation Dairy, 42 years in dairy business Milking 3,400 Cows growing to 4,800 Deer Run Dairy, Kewaunee, WI New partners merging two smaller dairies Milking 1,050 Cows growing to 2,000+ Wakker Dairy, Kewaunee, WI Transitioning to 2 nd generation Milking1,850 Cows growing to 3,000 (Jerseys)

9 Planning for Success Major Project Participants ESG & Vectren - Energy Plant Owner WPS - Public Utility, power purchaser, biogas FIT ESG - Developer, designer, builder, operator Dairy Farm Partner, fuel supply & operator DVO, Inc. - Digester technology provider & operator Yes: three operators! Manure handling (Fuel Supply & Operating Agreement) Digester operations (Operating Agreement) Energy operations (Self performed) Integration and flexibility!

10 Practical Dimension of Success Single Points of Control Control of all of the engineering Site, Ag-based, manure storage, building and structures Digester components: manure and substarte reception, process, effluent control, by products Power generation, heat recovery Project and Power Plant instrumentation and control AD to energy presents a simple system that requires precise Instrumentation and Control Fuel & effluent character, quality, temps, psi, flows Integration of AD and Engine plant into the Dairy system Farm and plant impact each other (manure collection and flow, pumping control, flushing method, foot bath diversion) Elevations are important: gravity rules

11 Practical Dimension of Success Goals, Roles and Contracts Define Expectations ti clearly l Operations, roles, response times Know your partner, understand what the growth plan really means and dthe timingi Understand the mix of cultures: developer, utility, engineers, the technology providers, the farm-partner Farmer uncomfortable with s and conference calls Ambiguity in contracts creates problems The investor/owner is looking for % uptime of the generators which drives revenue Clear, fair effective Communication solves almost all issues!

12 Practical Dimension of Success Understand the Farm System Know what is in the manure/bedding mix Materials the AD does not like (sand, straw, floatables) Integrate into the operation of dairy Flushing, pumping, feeding, bedding AD daily tasks and logistics a priority Understand who/how is the dairy O&M person Dairy is responsible for substrates and manure-in, and solids-out Specific person, skill level, dairy farmer Develop, and Manage, the Operating Plan Procedures for manure transfer, digester feed, solids removal Testing of critical digester parameters of performance Temp, ph, volatile solids destruction, ti alkalinity, li it etc.

13 Practical Dimension of Success Anaerobic Digestion Basics Anaerobic Digestion Science Typical Biogas Constituents

14 Practical Dimension of Success KISS: Keep the Methane Formers Happy Maintain anaerobic conditions Consistent, correct temperature (+/- one degree) Small, regular feedings Consistent feedstock & flow Neutral ph Good mixing give them access No toxins Give them time to work (HRT)

15 Practical Dimension of Success Top Ten Digester Management Variables Measure, monitor and control Volatile acids Alkalinity levels CO2 ph Temperature Additional substrate character and content Organic loading Hydraulic loading Gas composition and volatility Volatile solids reduction

16 Design & Start up Practical Insights Earned Wisdom Toxin diversion, surface water diversion Equipment specification and installation Additional material handling equipment: tanks, pumps, mixers Everyday operating issues Overfeeding: flush water, farm waste, substrates Equipment issues: 10% reserve inadequate Moving parts: blowers, pumps, filters System integration: it must all work to work

17 Practical Insights Earned Wisdom Management and monitoring still a few bugs Programming and automation Equipment Variables Contract mechanisms Integration Responsibilities Equipment specification and performance Operating Agreements Staff PM and operations Staff partner training and operations Staff defining full time

18 Black Swan Barn Fire Overload, toxin Practical Insights Expensive Lessons Solution exacerbated problem Ongoing recovery plan Hydrogen sulfide Permit versus practical We are all learning Heat Rate (engine efficiency) i Promises, problems and truth Assumptions can save or sour

19 Practical Insights Success Has an Unexpected Face Financial Revenue and production below expectation Unexpected expense profiles, overall lower ongoing cost Start up budget and operating reserves Gas production has been excellent: above planning! Overall project up time has been over 90% Carbon values We will do it again Partnership adjustments, better integration Expectations, risk management, guarantees

20 Summary on Digester Success Future of the Farm Based Business Model? Scale Finance and regulatory volatility Federal tax and renewable policy State legislative initiatives Environmental regulation Commodity market volatility Electricity, Natural Gas RIN & CNG Carbon values Organics market development

21 Summary on Digester Success Thank you! Questions?

22 Reserved