Methane Recovery from Small Dairy Operations

Final Report for SW04-007

Project Type: Research and Education
Funds awarded in 2004: $123,834.00
Projected End Date: 12/31/2008
Matching Federal Funds: $450,000.00
Matching Non-Federal Funds: $127,000.00
Region: Western
State: Montana
Principal Investigator:
Ron Carlstrom
MSU Extension- Gallatin County
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Project Information

Abstract:
2.0 SUMMARY

This project designed and constructed an anaerobic digester system on a smaller sized (350 cow) dairy commonly found in the region. The system demonstrates a waste management system that: produces renewable energy; diversifies family farm income; reduces odors, pathogens, and greenhouse gas emissions; produces fertilizer, bedding material, and compost all while protecting the quality of the environment.

Project Objectives:
4.0 OBJECTIVES/PERFORMANCE TARGETS

This project has the following objectives:

Develop a benchmark of sustainable agriculture for the dairy industry to increase profitability, lessen reliance on non-renewable energy sources, and showcase the power of partnerships to maintain the economic strength of local agriculture;

Demonstrate the environmental benefits of anaerobic digestion: greenhouse gas reduction, nutrient conservation and recycling, odor and pathogen reduction, renewable energy production and utilization, and water quality protection;

Showcase a sustainable agricultural practice that is designed with heavy producer involvement, which result in a reliable, easily maintained system; and

Widely promote the project’s environmental and economical benefits to increase public education of the use of this technology.

Introduction:
3.0 INTRODUCTION

Background: The biological process of producing gas from organic wastes is referred to anaerobic digestion. “Biogas” is composed mainly of methane (CH4) 50-70%, carbon dioxide (CO2) 30-40%, and hydrogen 5-10%. Anaerobic digestion is a complex physio-chemical and biological process. This takes place in three steps: 1) Hydrolysis: large molecularly complex substances are solubilized into simpler ones with the help of an enzyme released by bacteria; 2) Acidification: acid forming bacteria break down the molecules into atoms, which are in a more reduced state; and 3) Methanization: processing of acids by methanogenic bacteria to produce biogas. Typically the process operates in temperature ranges of 95 to 105 degrees F. The digested effluent is uniform, consistent, and flows through the solids separation process with greater efficiency. This ultimately results in greater control of the waste stream and application at agronomic rates.

Anaerobic digestion has been used as a means of waste management and energy production technology for many years. Anecdotal evidence shows that biogas produced through anaerobic digestion was first used in heating bath water in Assyria during the 10th century B.C. and in Persia in the 16th century. The U.S.’s first farm-based digester was initiated in 1972 in Iowa as a result of urban encroachment. The number of digesters for farm application increased greatly during the late 1970s and early 1980s as a result of higher energy prices. Many of these early digesters failed due to poor design and construction and lack of producer involvement in the project. Since 2000, methane reduction attributed to anaerobic digesters has been steadily increasing.

Several digester designs exist. These include covered lagoons, plug flow, stage mix, complete mixed, and attached media. Seventy-seven percent (77%) of the systems installed in the U.S. are either plug flow or complete mixed. While these systems can be fairly effective, they suffer from long detention times (20-30 days) necessitating large areas for construction of the digester vessel, and require complete digester shut down in the event the digester plugs.

Selection and design of the digester configuration is highly dependent on the operational characteristics and location of the individual dairy. Success depends on the matching and modifying the digester operating parameters to the individual dairy characteristics. Proper design, operation, and maintenance of a digester will result in the production of a consistent supply of usable gas and post digested material (fiber and liquids).

Until just recently, commercial application of this technology was not economically feasible for smaller dairy operations. Commonly installed systems are sized for 1,000-cow dairies minimum. This project utilizes a system consisting of independent steel reactor tanks that are modular, scale-able, fed at a constant rate, and able to process waste in three to five days. The Induced Blanket Reactor developed by Utah State University and installed through Andigen is fully enclosed in a building and represents the first digester utilized for waste management and energy production on a dairy in Montana.

Project History: This is the first anaerobic digester to be used for waste management on a dairy in Montana. This project was initiated to demonstrate the technical, economic, and environmental application of anaerobic digestion as a means of manure management for a smaller “Montana-sized” (300 to 500 cow) dairy.

In March 2003, the Northern Rocky Mountain RC&D formed a project team to assist the owners of the Plain-Vista Dairy in Churchill, MT to implement anaerobic digestion as a means of treating their dairy waste, generating electricity, providing nutrient conservation, and diversifying their income stream. The team included the owners of Plain Vista Dairy, MSU Extension Service, the Gallatin County Extension Agent, Natural Resource Conservation Service (NRCS), the Power Procurement Group (a consulting firm specializing in energy generation projects), Gallatin Conservation District, and Northwestern Energy.

In April 2003, the team successfully obtained a Montana Department of Natural Resources and Conservation (DNRC) grant to produce a feasibility study for the project. RCM Digesters, an experienced firm in anaerobic digester technology, was awarded a contract to determine the applicability and feasibility of anaerobic digestion for Plain Vista Dairy. In November 2003, RCM Digesters, Inc. finalized the feasibility study. They found that the anticipated system outputs from a plug flow digester at the Plain Vista Dairy would be 31,511 cubic feet per day of biogas capable of producing 56 kilowatts of electricity with 234,000 Btu/hr of recoverable heat for use. The net potential economic benefit (from electricity and hot water purchase offset, sale of digested solids, tax credits and potential marketing of the Renewable Energy Credits) was approximately $41,000 per year.

The project team identified new technology developed through Utah State University (USU) for its digester design through a partnership with Montana State University’s School of Agriculture. In March 2004 the team visited the USU campus dairy and pilot digester system, as well as a hog farm utilizing their digester technology. Team members also visited several other digesters in Oregon and Washington. In the summer of 2004, the project team also started the development of a Comprehensive Nutrient Management Plan (CNMP) for the Plain Vista Dairy.

In the fall of 2004 the project team determined that MSU’s design capability was not sufficient to accomplish the project objectives. The team issued Requests for Qualifications to 12 design/ construction firms familiar and experienced with anaerobic digestion technology. Five firms were issued formal Requests for Proposals. Andigen in Utah was chosen. The team also ended its contract with Power Procurement Group and hired another local firm to provide project management for Plain Vista. In early 2006 the contractor providing project management sold his company and ceased all work on the project.

The CNMP for Plain Vista identified a major issue for the farm: lack of available land to apply digested nutrients at agronomic rates. The project team engaged in an extensive effort to solve this issue. Alternative pre- and post-digestion treatment methods were explored as well as partnerships with neighboring farms for nutrient application.

In April 2006 the project team concluded that moving forward with construction of the anaerobic digester project on Plain Vista Dairy was not economically feasible at this time. Major factors contributing to this decision included lack of land available to apply post digested liquids, lack of net metering ability with Northwestern Energy for electricity produced, farmer time constraints to operate and manage the facility, and a change in dairy goals and priorities. The project team feels strongly that the work accomplished for the Plain Vista Dairy positively benefited the project and resulted in its ultimate success on Huls Dairy.

In spring and early summer of 2006 the project team searched Montana for a suitable, comparable location for the project. Three locations were identified that fit the original project criteria and had the characteristics for successful project implementation. The Huls Dairy in Corvallis, MT was found to be the best fit for the project for a variety of reasons, including recent renovation of the facility, owner capacity to manage and operate the system, adequate space for the digester and nutrient reuse, and close working relationship with the local electric cooperative.

From June 2006 through September 2008 the project team worked with Huls Dairy to design and construct the anaerobic digester system. The project was found to be substantially complete in early September 2008.

Cooperators

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Research

Materials and methods:
5.0 MATERIALS & METHODS

Objectives/outcomes for this project were accomplished through the following methods:
The system at Huls Dairy includes the following components:

System Design: Methane digestion research to date has focused on larger farm operations. Low-cost components were investigated to determine if they are suitable for a methane production on a smaller farm that is typical of Montana. A comprehensive system design was completed that included waste conveyance, biogas handling, post digested material solid separation, liquid storage and fiber and liquid utilization. System components were designed with heavy producer involvement. The energy provider (Ravalli County Electric Cooperative) agreed to net meter electrical power generated from biogas production.

System Construction: Dan Huls from Huls Dairy served as Construction Manager for the entire project. Local firms were utilized for the majority of work accomplished, including digester vessel fabrication, excavation, building construction, mixing tank construction, and plumbing and electrical work. Close coordination between the dairy owners, design team, and construction subcontractors made certain that the system is successfully integrated into current dairy operations.

Information Dissemination: The project’s success is being widely publicized to promote this sustainable agriculture technology to the general public as well as the dairy community. It has received much press throughout Montana. The Huls have toured hundreds of individuals through the facility. This project is expected to be a template for several similar systems throughout the western states.

Research results and discussion:
6.0 RESULTS AND DISCUSSION/MILESTONES

It seems only fitting the Huls Dairy will be celebrating their centennial this year with start-up of the anaerobic digester. Huls Dairy has been in operation since 1908. They have been at the cutting edge of technology and the addition of the anaerobic digester will allow this family dairy to remain competitive in today’s dairy market. System findings and discussion follow.

Findings Discussion: This project furthered the understanding of anaerobic digester planning, design and construction for small dairies. The following is a discussion of findings resulting from this work:

Producer Involvement: The majority of anaerobic digesters that have failed in the U.S. failed because of lack of landowner involvement and commitment to the design and operation of the facility. While the Plain Vista owners were exceptional to work with, and are still very interested in the technology and benefits of anaerobic digestion, their schedule did not allow the kind of time necessary to ensure this demonstration is successful. Unlike larger farms that may have many employees to perform milking and farming operations, small dairy owners typically are responsible for overseeing, managing, and running their entire farm operations. The Plain Vista owners had significantly limited time to invest in the anaerobic digester project, and it was agreed that this consideration was a critical component for small dairies to consider when looking at Anaerobic Digestion as a means of waste management.

Electric Utility Interconnection: Small dairies typically will not produce enough energy to negotiate power purchase agreements with utilities. The ability to “net meter” the energy produced is essential if biogas is going to be converted to electrical energy. “Net metering” means that when the dairy is producing more energy than it needs, the meter runs “backwards” and when it is using more energy than it produces, it runs “forward.” The net result is calculated upon some “true up” period (monthly or annually). If the dairy produces more energy than it uses, the excess energy is donated to the utility. If the dairy uses more energy than it produces, the utility charges them for the net amount needed. Huls Dairy has a very good relationship with its energy provider, Ravalli County Electric Cooperative. The utility has agreed to net meter energy produced by the dairy.

Valuation of Other Benefits than Electricity Generation: For small dairy operations net metering of electricity alone will not pay for the cost of constructing the digester system. The dairy must value other benefits of the technology in considering the financial viability of the system. Both Huls Dairy and Plain Vista Dairy are located in areas experiencing rapid population growth. This urban encroachment was a major driver for installing the anaerobic digester system. Huls dairy completed a major facility upgrade in 2004 and had designed their parlor and waste handling systems for the future incorporation of a digester system. They also had plans for utilizing the post digested liquid wastes in their farm irrigation system. The next enterprise they are embarking on will be bagging the post digested fiber for sale as a high-quality soil amendment. Each of these components, Huls dairy identified financial and labor saving benefits from anaerobic digestion. They ultimately made the decision to move forward with the project because of the cumulative savings realized from the technology’s installation.

Dairy Facility Layout and Operation: The design, operation and maintenance of anaerobic digester systems can vary greatly between operations. Each digester system must be customized to the dairy it is to be installed on. The project team found that dairies having the following layout and operational characteristics may be better suited to installation of anaerobic digestion technology:

Adequate land availability for application of post digested liquids. Nutrients are conserved through the anaerobic digestion process. The dairy must have adequate land available (owned or through long term leases by the dairy) for the agronomic application of nutrients.

Adequate space for the digester and associated systems. While the IBR digester system has a relatively small footprint compared to other systems, adequate space for sighting the digester in a way that will promote gravity feed of wastes is important.

Proximity to navigable waters and other environmental considerations. The project team assisted Huls Dairy in getting confirmation from the Montana Department of Environmental Quality that the dairy would be considered a zero-discharge facility and not require a National Pollutant Discharge Elimination System permit. Huls Dairy’s distance from any navigable water sources made permitting of this facility easier. For dairies close to water or in areas that may require more stringent building or other environmental permitting, the project may be more complicated and expensive to complete.

Research conclusions:
7.0 IMPACT OF RESULTS/OUTCOMES

The Huls Dairy Anaerobic Digester system was completed in September, 2008. Measureable impacts that are anticipated to be realized as a result of this project include:

Increase in Awareness of Anaerobic Digestion as a Means of Dairy Waste Management. Huls Dairy provides tours for hundreds of people a year. Tours have dramatically increased since the kick off of this project. It is anticipated that thousands of people will tour the facility each year. In addition, the dairy’s success will be widely marketed in newspapers throughout Montana. County Extension and RC&Ds in Montana are also widely promoting the project and its results.

Environmental and Economic Results. The following results are anticipated to be realized this year.

Estimated biogas generation of 24,500 cubic feet of biogas per day capable of producing 16,537,500 BTUs per day

Total estimated annual electric generation: 401,760 KWh (assumes 10% down-time and 50 kW generator)

Fiber (solids) produced annually: 31,938 cubic feet

Metric tons of methane combusted annually: 112 (2,043 metric tons of carbon credits)

Revenue from methane combustion is estimated to be approximately $7,000 in 2009 (at a carbon price of $3.50/metric ton of CO2)

Revenue from sale of bagged fiber in 2009 is estimated to be between $10,000 and $50,000.

Natural gas offset from the use of biogas is expected to be approximately $6,000.

The RC&D and Gallatin County Extension will provide annual updates on their websites of the Huls Digester system performance and economic performance.

Participation Summary

Educational & Outreach Activities

Participation Summary:

Education/outreach description:
9.0 PUBLICATIONS/OUTREACH

A publication was designed for the Northern Rocky Mountain RC&D’s Annual Meeting in January 2008 and has been used as handouts on the digester project at other meetings and tours.

The website www.hulsdairy.com was planned to be up and running in October 2008. The website will act as an educational resource for people interested in digester information and the dairy industry. In addition, information about the project is available on the Northern Rocky Mountain RC&D website www.wegetcommunity.com. The Natural Resources Conservation Service in Montana will be generating additional publications and assisting with information dissemination.

Additional outreach efforts include numerous tours of the facility, a ribbon cutting planned for November 2008, and success story presentations at the National Association of RC&D Councils in Albuquerque, NM in June 2009 and numerous events throughout Montana.

Project Outcomes

Project outcomes:
8.0 ECONOMIC ANALYSIS

Huls Anaerobic Digester System and its associated waste handling, storage and conveyance systems had approximately the following costs:

Design and Project Management: $37,000
Digester Equipment, Construction, Installation: $578,000
Waste Storage Facilities, Handling Systems, and Post Digested Solids Handling: $370,000
Total Systems Costs: $985,000

The project team estimated simple payback scenarios for three revenue estimates. The low estimate was projected using revenue estimates from bulk sales of post-digested fiber. The high estimate assumed a bagged product to be retailed in the “designer” compost market. Initial system payback was estimated using the total, non-grant assisted, cost estimate. Results were as follows:

Revenue Estimate Assumptions:

Electric generation revenue at sale price of $0.024/kilowatt hour, using a 50 KW generator, assuming 10% down time for maintenance. Generation is estimated to be 4.018 Megawatts of electricity.

Low value bulk compost sales were estimated at $10/cubic yard with 1,182 cubic yards of fiber generated. The high estimate for a bagged product was $4.88 per cubic foot.

Carbon credit revenue was estimated at $3.50/metric ton of CO2 combusted. It is estimated that Huls Dairy will combust 2,042 metric tons of CO2 annually.

Natural gas offset was estimated at $9.90 per decatherm. A natural gas offset of 716 decatherms could be offset through utilization of biogas.

Revenue Estimates:
Three scenarios were tested for revenue estimates: bulk compost sales, bagged low-value compost sales and bagged high-value compost sales. Holding other assumptions constant, potential annual revenue was estimated to be: (Low: $34,845), (Mid: $77,950), (High: $180,000).

Simple Payback:
Simple payback of the estimated total system costs was estimated to be 33 years for the low, 14 years for the mid, and 6 years for the high revenue estimates.

Grant Support:
As this was a demonstration project and the first anaerobic digester in Montana, considerable grant support was obtained. Approximately $850,000 in grant funds were awarded for the Huls project.

Farmer Adoption

10.0 FARMER ADOPTION

It is anticipated that many farmers in Montana will adopt this technology in the coming years. There are several farms currently investigating the applicability of anaerobic digestion for their operations in Montana. A new grant application will be submitted in 2009 for a very small digester based on the same technology.

The Huls Family is very interested in being a point of contact for this technology in Montana and on small dairies. The lessons learned through project design and construction will be very valuable for future projects of this type.

Recommendations:

Areas needing additional study

11.0 AREAS NEEDING ADDITIONAL STUDY

A promising area of additional work is to utilize the biogas for vehicle fuel. In order to do this, the gas conditioning technology will have to become more affordable for smaller digester systems. Offsetting $4.00/gallon diesel costs would be much more economical than offsetting 7 cents/KW electricity.

Agriculture in the United States is moving into larger and larger farms and ranches. If the “little guy” is to survive, the technologies that the big guys are using need to be built on a smaller scale. Additional study to further reduce the costs of the digester system for smaller applications (100-head dairies) is required.

Another area of work that could be investigated is combining off-dairy waste products with the dairy waste (i.e. food waste from schools) to increase gas production. The potential of putting several dairies’ wastes together into a regional digester might also be an area of work in Montana that could be investigated.

Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture or SARE.