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Combined heating & power - Reciprocating engine - 65 kW - Biogas / Canada
Case study assignment
As a biogas project developer you need to produce performance and cost estimates for a biogas system providing both heat and electricity to a small dairy farm near Peterborough, Ontario, Canada. The two farmers who run this operation do not want to enter into complex contracts but want to determine if a biogas generation system will pay back in a net metering scenario.
Site information
In an effort to offset the costs of a manure handling system to comply with government waste and nutrient management regulations, a dairy farm wants to determine if the system can be paid for in a net metering scenario wherein the manure handling system can be engineered to produce biogas for electricity generation for the farm and to feed back into the grid.
The farm has 140 head of milking cows plus calf operation. The farm is home to 2 families and uses considerable electricity in its day to day operations. The farm's power load profile shows an increase from a low of 40 kW during the first two months of the year, rising gradually to 150% of this value in the two mid-summer months and then falling back to 120% of the low load in the two months at years end. Presently a biomass fired boiler is utilized in a mini-district heating system between the 2 houses, a machine repair shop and the milking parlour-barn complex. The three building clusters each have heated floor areas of approximately 400 m2 and are moderately well insulated for a design temperature of minus 20°C. Hot water used in the milking parlour and houses represents about 12% of total heating requirements. The heating and power plant are located close to the milk parlour and barn, some 100 m from the machine shop and about 150 m from the houses. There are no secondary heat distribution lines in the milk parlour and barn and minimal (about 10 m each) secondary lines for the houses and machine shop.
The farm operators are from Europe and have had experience with biogas systems in the past. They have the technical know-how to implement a solution thus lowering the installation cost. Antibiotics are a concern in bio digester operation as they are detrimental to the microbiological population that actually does the work of converting solids to gas. This operation has maintained good animal health without the use of antibiotics. It is expected that with the planned mixture to the digester, the annual biogas production will be about 167,000 m3 with a 67% methane content. The operation is therefore conducive to biogas production.
Engineering and on going system support are not concerns and will not be cost considerations in this situation since both farmers are also engineers, one electrical and the other mechanical.
Manure will be gravity fed into a holding tank which will be retrofitted with insulation, plastic heating lines and a cover for gas accumulation and storage. A flare will be utilized when the genset is not operating so no gas emission will go into the atmosphere.
A heat exchanger will be used on the genset to provide heated water to the existing biomass boiler so that when the genset is operating, solid biomass is not being used for the district heating system. This will permit the farmers to reduce their time and effort collecting and storing the solid biomass. In summer the genset engine will use a radiator for cooling so that only part of the heat from the exchanger will be used for hot water in the milking parlour and houses. No cost has been allocated to collecting and storing the solid biomass.
Energy efficiency measures will be implemented during the installation that reduce the load on the electrical system by about 3% and cost $1,000 to install.
Financial information
Financial figures for the analysis are: inflation of 2%, fuel cost escalation rate of 2%, zero debt, discount rate of 10%, and project life of 20 years. The farm owners do not require a tax analysis.
The genset cost is $110,500 including installation. Rebuild cost at 50,000 hrs on the engine is $10,000. Oil changes with filter exchange are every 500 hrs at a cost of material of $30. The rebuild and oil change costs are included in an annual O&M charge of $2,200.
Since the system is gravity fed no additional pumps are required, retrofit of the present storage system costs $80,000 and an additional $25,000 for the flare and gas safety equipment.
Studying the feasibility and negotiation for grid connection of the system will take 20 hours of your time with a cost of $2,400.
There are two alternatives that the farmers need to consider. For a generator connection that would sell onto the grid, 10 km of power line would have to be upgraded from single to three phase and extended at an estimated minimum cost of $500,000. Since this is too costly, they chose to look at net metering wherein no line upgrade is necessary but a smart meter is required at a cost of $2,400. Single phase switch gear comes with the equipment since the genset is asynchronous so that the farm can still power itself during a blackout.
As part of a farm environmental protection project, a government grant of half the system installed cost (up to a maximum $50,000 grant) is available for any type of manure storage system. The owner pays for the remainder of the project cost.
Prepare a RETScreen study, documenting any assumptions that you are required to make, and report on the significant conclusions from this analysis.
Solution
The worked-out solution is the data file selected from within the RETScreen Project Database. The user automatically downloads the Project Database file while downloading the RETScreen software.
Teacher's notes
Real project
Results
Cobden Dairy, near Peterborough, Ontario, Canada, needed to assess if the installation costs for a biogas operated genset could be offset in a simple net metering scenario. The farm operators were competent in the development of a simple digestion system but required some form of analysis prior to investing in the project.
Using RETScreen, REO Energy Group were able to derive the optimum scenario for the use of the biogas. The farm was already set up in a sustainable fashion including a biomass (wood) fired boiler district heating system.
The system has been in operation for 3 years with the first operational year's goal being the balancing of the fuel quality and run times to meet the financial goal of zeroing out the farm's electricity bill. This goal was met and the two subsequent years of operation have put the operators well on the way to meeting the equity payback calculated with RETScreen.
Partial funding for the project was provided by the Ontario Environmental Cost Share Program for Agriculture, where up to 50% of an environmental project's cost may be funded up to a maximum of $50,000. The program has since been changed but there are similar grants now available for these types of projects.
System description
A simple upgrade to the manure storage system was the largest hurdle and took 18 months to complete because it was done within regular farm operations. The genset arrived in a container including computerized control systems for fuel, power production, grid synchronization, etc. A flare was added as part of the gas safety system and as a method of allowing the digester to operate in continuous mode.
The digester came from a Swiss design manual and the genset was a Perkins-based system from Germany. The equipment can be bought unbundled or as a complete unit; additional sound proofing is available as an option. The engine is a low BTU fuel head design based on a standard diesel block which allows for familiarity in operation and maintenance.
The system is optimized for heat when operated in the winter to supplement the biomass boiler system; in summer the system uses a radiator to discharge heat since the only hot water requirement is in the milk parlour for wash up. The summer is when the electrical load is highest due to air conditioning and milk parlour chiller operation.
Once the system was up and running, it required a few months to get the engine air/fuel ratio and turbo parameters correct. This can be especially challenging when synchronizing to the grid. The first engine had controller problems, leading to premature failure and was replaced by the manufacturer under warranty.
Lessons learned
The big picture
Bio digester systems allow for the stabilization of animal wastes in livestock operations. Allowing for the 'harvesting' of the resulting energy, from the biogas, provides a means to an economic end. The material that the digester stabilizes acts as a fertilizer thus lowering the cost of farm operation.
Keeping the system simple is key to the success of many biogas operations. Some potential users try to develop new sources of income from energy sales which can lead to complex and expensive installations that not only require large capital investments but can also entail considerable human resource commitments.
These systems can be standard issue if properly designed, if kept simple and if they fit into the operation of the farm.
Photo
Farm - Reciprocating engine - Biogas, Ontario, Canada
References
Case study assignment
As a biogas project developer you need to produce performance and cost estimates for a biogas system providing both heat and electricity to a small dairy farm near Peterborough, Ontario, Canada. The two farmers who run this operation do not want to enter into complex contracts but want to determine if a biogas generation system will pay back in a net metering scenario.
Site information
In an effort to offset the costs of a manure handling system to comply with government waste and nutrient management regulations, a dairy farm wants to determine if the system can be paid for in a net metering scenario wherein the manure handling system can be engineered to produce biogas for electricity generation for the farm and to feed back into the grid.
The farm has 140 head of milking cows plus calf operation. The farm is home to 2 families and uses considerable electricity in its day to day operations. The farm's power load profile shows an increase from a low of 40 kW during the first two months of the year, rising gradually to 150% of this value in the two mid-summer months and then falling back to 120% of the low load in the two months at years end. Presently a biomass fired boiler is utilized in a mini-district heating system between the 2 houses, a machine repair shop and the milking parlour-barn complex. The three building clusters each have heated floor areas of approximately 400 m2 and are moderately well insulated for a design temperature of minus 20°C. Hot water used in the milking parlour and houses represents about 12% of total heating requirements. The heating and power plant are located close to the milk parlour and barn, some 100 m from the machine shop and about 150 m from the houses. There are no secondary heat distribution lines in the milk parlour and barn and minimal (about 10 m each) secondary lines for the houses and machine shop.
The farm operators are from Europe and have had experience with biogas systems in the past. They have the technical know-how to implement a solution thus lowering the installation cost. Antibiotics are a concern in bio digester operation as they are detrimental to the microbiological population that actually does the work of converting solids to gas. This operation has maintained good animal health without the use of antibiotics. It is expected that with the planned mixture to the digester, the annual biogas production will be about 167,000 m3 with a 67% methane content. The operation is therefore conducive to biogas production.
Engineering and on going system support are not concerns and will not be cost considerations in this situation since both farmers are also engineers, one electrical and the other mechanical.
Manure will be gravity fed into a holding tank which will be retrofitted with insulation, plastic heating lines and a cover for gas accumulation and storage. A flare will be utilized when the genset is not operating so no gas emission will go into the atmosphere.
A heat exchanger will be used on the genset to provide heated water to the existing biomass boiler so that when the genset is operating, solid biomass is not being used for the district heating system. This will permit the farmers to reduce their time and effort collecting and storing the solid biomass. In summer the genset engine will use a radiator for cooling so that only part of the heat from the exchanger will be used for hot water in the milking parlour and houses. No cost has been allocated to collecting and storing the solid biomass.
Energy efficiency measures will be implemented during the installation that reduce the load on the electrical system by about 3% and cost $1,000 to install.
Financial information
Financial figures for the analysis are: inflation of 2%, fuel cost escalation rate of 2%, zero debt, discount rate of 10%, and project life of 20 years. The farm owners do not require a tax analysis.
The genset cost is $110,500 including installation. Rebuild cost at 50,000 hrs on the engine is $10,000. Oil changes with filter exchange are every 500 hrs at a cost of material of $30. The rebuild and oil change costs are included in an annual O&M charge of $2,200.
Since the system is gravity fed no additional pumps are required, retrofit of the present storage system costs $80,000 and an additional $25,000 for the flare and gas safety equipment.
Studying the feasibility and negotiation for grid connection of the system will take 20 hours of your time with a cost of $2,400.
There are two alternatives that the farmers need to consider. For a generator connection that would sell onto the grid, 10 km of power line would have to be upgraded from single to three phase and extended at an estimated minimum cost of $500,000. Since this is too costly, they chose to look at net metering wherein no line upgrade is necessary but a smart meter is required at a cost of $2,400. Single phase switch gear comes with the equipment since the genset is asynchronous so that the farm can still power itself during a blackout.
As part of a farm environmental protection project, a government grant of half the system installed cost (up to a maximum $50,000 grant) is available for any type of manure storage system. The owner pays for the remainder of the project cost.
Prepare a RETScreen study, documenting any assumptions that you are required to make, and report on the significant conclusions from this analysis.
Solution
The worked-out solution is the data file selected from within the RETScreen Project Database. The user automatically downloads the Project Database file while downloading the RETScreen software.
Teacher's notes
- A digester is a system that allows for biological processing of organics in an environment absent of oxygen. The outputs are natural gas (CH4 and CO2) plus traces of hydrogen sulphide (H2S).
- Gas cleaning is limited to removal of H2S by introduction of air into the gas line with a simple condensation removal system. The low BTU gas (biogas) is fed directly into the engine which is designed or refitted for this type of operation.
- For the base case heating system, a fuel rate of $30/t was estimated as the savings for not cutting down, transporting and preparing solid biomass feedstock for the biomass fed boiler.
- The debt ratio in the Financial Analysis worksheet has been set to 0; this is because the farmers paid for everything out of their own pockets.
- The biogas system's annual labour costs are considered part of the farm operation since it augments both the manure handling system and the biomass district heating system.
- The genset has maintenance requirements the same as for a standard diesel engine found around the farm operation
- As a rule, the RETScreen default data for the heating value of biogas fuel can be used and "Biogas" could be selected from the Fuel type drop-down list. However, in this case, an analysis of the fuel was available, so instead, "User-defined fuel - gas" was selected in the drop-down list and the ultimate analysis data of the fuel entered into the Tools worksheet.
- The internal rate-of-return, net present value and simple payback period would still be acceptable without a grant.
Real project
Results
Cobden Dairy, near Peterborough, Ontario, Canada, needed to assess if the installation costs for a biogas operated genset could be offset in a simple net metering scenario. The farm operators were competent in the development of a simple digestion system but required some form of analysis prior to investing in the project.
Using RETScreen, REO Energy Group were able to derive the optimum scenario for the use of the biogas. The farm was already set up in a sustainable fashion including a biomass (wood) fired boiler district heating system.
The system has been in operation for 3 years with the first operational year's goal being the balancing of the fuel quality and run times to meet the financial goal of zeroing out the farm's electricity bill. This goal was met and the two subsequent years of operation have put the operators well on the way to meeting the equity payback calculated with RETScreen.
Partial funding for the project was provided by the Ontario Environmental Cost Share Program for Agriculture, where up to 50% of an environmental project's cost may be funded up to a maximum of $50,000. The program has since been changed but there are similar grants now available for these types of projects.
System description
A simple upgrade to the manure storage system was the largest hurdle and took 18 months to complete because it was done within regular farm operations. The genset arrived in a container including computerized control systems for fuel, power production, grid synchronization, etc. A flare was added as part of the gas safety system and as a method of allowing the digester to operate in continuous mode.
The digester came from a Swiss design manual and the genset was a Perkins-based system from Germany. The equipment can be bought unbundled or as a complete unit; additional sound proofing is available as an option. The engine is a low BTU fuel head design based on a standard diesel block which allows for familiarity in operation and maintenance.
The system is optimized for heat when operated in the winter to supplement the biomass boiler system; in summer the system uses a radiator to discharge heat since the only hot water requirement is in the milk parlour for wash up. The summer is when the electrical load is highest due to air conditioning and milk parlour chiller operation.
Once the system was up and running, it required a few months to get the engine air/fuel ratio and turbo parameters correct. This can be especially challenging when synchronizing to the grid. The first engine had controller problems, leading to premature failure and was replaced by the manufacturer under warranty.
Lessons learned
- To process modest quantities of manure a simple biogas system is viable.
- Complex systems cost more; in this situation a simple system was viable since it paid for itself in short order through energy use offsets,
- Several consultants had previously determined that this system was not sustainable but the use of RETScreen helped determine that it could be viable if all variables were considered.
- The more that can be done on-farm the better the chance of system viability.
- The system needs to fit into the day-to-day farm operations in order to be sustainable; a system that adds new labour requirements to the workload is not sustainable on the typical farm.
- Equipment support from a reputable supplier is key. Perkins was very supportive in providing the right equipment and subsequently in warranty support for the equipment.
- Standard engine configurations (reciprocating, diesel design) that are easily repaired or replaced result in low initial and operating costs.
The big picture
Bio digester systems allow for the stabilization of animal wastes in livestock operations. Allowing for the 'harvesting' of the resulting energy, from the biogas, provides a means to an economic end. The material that the digester stabilizes acts as a fertilizer thus lowering the cost of farm operation.
Keeping the system simple is key to the success of many biogas operations. Some potential users try to develop new sources of income from energy sales which can lead to complex and expensive installations that not only require large capital investments but can also entail considerable human resource commitments.
These systems can be standard issue if properly designed, if kept simple and if they fit into the operation of the farm.
Photo
Farm - Reciprocating engine - Biogas, Ontario, Canada
References
- Boehni, Thomas, Boehni Energy and the Environment: Compact BioGas System Design, 2007.
- Cobden Dairy farmers, "Personal Communication," 2007.
- Laurentino, Jose, "Personal Communication," REO Energy Group, 2007.
