Cashing in on Biogas to Energy

Published on Mon, 01/19/2015 - 3:57pm

Successful projects in this growing component of dairying depend on careful technology system selection and sizing, progressive operation maintenance practices, and financing tailored to the operator’s needs.

Ten years ago, dairy operations saw cattle manure as simply a source of crop nutrients. Today, as operations grow larger and renewable energy gains importance, manure increasingly serves as a fuel source.
Biogas-to-energy projects — anaerobic digesters producing biogas that generator sets turn into electricity — are sprouting like the latest cash crop. But how can a dairy operator create a project that maximizes economic returns? In the simplest terms, successful projects require the right technology, the right operations and maintenance, and the right financing.
Gas-fueled reciprocating engine-generators are the technology of choice for biogas-to-energy, offering low installed cost, extreme reliability, and relatively simple maintenance and service.

Case in point
Homestead Dairy in Plymouth, Indiana, illustrates success in biogas-to-energy. It was once a modest family farm with 110 cows, but brothers Floyd and Dan Houin have turned it into the massive operation that hosts a milking herd of 1,800 cows and milks an additional 1,700 cows from three nearby facilities. With growth and success came the issue of manure and potential for odors affecting neighbors. Floyd Houin, researching farms in northern Indiana and southern Michigan, determined that a biogas-to-energy facility would be a sound solution.
Homestead received a federal renewable energy grant to help cover the initial costs. In addition, the farm signed a 15-year power purchase agreement with Northern Indiana Public Service Co. (NIPSCO), the local electric utility, for 1 MW of electricity — enough to power about 1,000 homes. With that support in hand, the Houins built Homestead Green Energy.

Choosing technology
A critical step was to identify a power system that could anchor the facility while generating enough electricity to fulfill the NIPSCO agreement. Homestead partnered with the local Caterpillar dealer, Michigan Cat, on a custom power generation system built around two Cat® G3512A generator sets operating at 1,200 rpm and rated at a combined 1.16 MW. The units’ robust design provides long life and low owning and operating costs.
“I just like the difference in noise level compared to 1,800 rpm, so we invested more money up front on the lower-speed generators,” said Houin. “We went up a size when we didn’t have to because it’s better for the long run. Since we’re not running the generators as hard, we are going to have less wear on them.”

Multiple resources
At Homestead Green Energy, cow manure is collected in pools and piped 1,700 feet to a pair of mixing tanks that empty into two anaerobic digesters. There, microbes break down the organic matter and produce methane gas for the generators. Heat recovered from the engine exhaust and jacket water heats the digesters to maintain optimum gas production.
Beyond odor reduction and revenue from electricity sales to the utility, Homestead Dairy uses dewatered solids from the digesters as clean bedding for the cows. Nutrient-rich liquid is held in lagoons and used to fertilize the farm fields. “By turning this abundant substance into an income stream, we’ve made the dairy more profitable,” said Ryan Rogers, plant operator for Homestead Green Energy.

Positive results
Fully operational since October 2013, both generator sets run around the clock, making maintenance a top priority. Michigan Cat is there to provide support. “At some point, the generator sets are going to need service, so you’ve got to have parts and service available,” said Houin. “Michigan Cat understands that the system has to be running, not sitting idle. They are very helpful people.”
Homestead Green Energy expects to break even on its investment in five years. Meanwhile, plans are underway to add a third digester and a third generator. Houin is seeking more ways to use recovered heat: “Maybe we will add some greenhouses, or find some other way to capture the value of that heat.”

Keys to success
Homestead Green Energy demonstrates the economic value of smaller-scale biogas-to-energy operations. Dairies looking to replicate that success can profit from a careful look at the generating technologies available and at the maintenance practices that can make the difference between a marginally or extremely profitable project.
Engine manufacturers like Caterpillar offer gas engines in a wide range of capacities and with capability to comply with strict air-quality regulations. Today’s operators can choose engines with special design refinements aimed at delivering long, dependable service when burning variable-quality biogas fuel.
Once the right engine-generator system is in place, an optimized maintenance program can help get the most from it. Engine manufacturers’ local dealers can help devise a maintenance plan that goes beyond the one-size-fits-all basics in the owner’s manual.
Every engine-generator set requires downtime for maintenance. The secret is to make run times between maintenance shutdowns as long as possible, without compromising the engine’s integrity. That means applying engine-specific trend analysis and performing maintenance when it is required – neither too soon nor too late. Here are a few essential practices:
Lubricating oil: Operators should choose the oil and the additive package that best fits the application, then have the oil analyzed regularly for contaminants and determine how long it continues to lubricate and protect engine components.
Spark plugs: Trend data is essential to setting the optimum plug change or service interval. A good practice is to monitor and track spark plug wear by measuring and recording the gap at each service and by observing the plugs’ general condition. Ideally, the oil and spark plug change intervals should be the same, so that the engine is shut down only once while both tasks are completed.
Cooling system: Like oil, coolant should be analyzed regularly. An effective analysis program can help verify proper coolant chemistry, monitor cooling system condition, and signal opportunities to correct coolant or cooling system problems before failures happen.
Valves: Valves gradually recede into the valve seat with everyday wear, and valve lash gaps need to be adjusted regularly to maintain an effective combustion seal in the cylinders. Regular measurement of valve stem projection is essential to tracking trends in valve recession.

Proper financing
These practices aside, financing terms can determine a biogas-to-energy project’s level of success before the first cubic foot of fuel is burned. Project owners should explore a wide range of financing options — from traditional debt financing to a wide variety of leases — with an eye toward preserving capital and optimizing cash flow. An important component of financing is a construction loan that provides funds from the initial project phase until substantial completion, at which point long-term financing takes hold.

Putting it all together
One way to simplify a biogas-to-energy project is to work with a partner well qualified to manage multiple project phases, such as the local dealer for an engine-generator manufacturer. Such partnering can bring to bear broad experience in operating and maintaining biogas-fueled equipment and a local staff of service technicians. Dealerships are often qualified to provide whole-project engineering, procurement and construction, in addition to supplying the engines, generators and all ancillary equipment.
Biogas-to-energy projects can give dairy operators a new and environmentally responsible way to manage animal waste, reduce energy costs, and generate profits.

About the author
Michael A. Devine is Gas Product/Marketing Manager with the Electric Power Gas Group of Caterpillar, Inc., based in Lafayette, Ind. He can be reached at
Devine_Michael_A@cat.com.