This year marks a defining moment for renewable energy in North America. Faced with what appears to be the most severe financial crisis in decades, newly-elected President Barack Obama is opting to make investments of historic proportions in green energy. This decision, which includes a pledge to create five million ‘green jobs’ and a forthcoming bill which will provide $150 billion in economic stimulus for renewables over ten years, clears the way for a serious spike in new developments in the coming years. Among the subsectors of renewable energy that stand to benefit greatly is the biogas market.
To date, biogas in North America has largely been confined to manure management and waste water treatment purposes, with energy production considered as an afterthought.
This is, however, changing as there has been growing interest in creating forms of distributed base load electricity, natural gas derived from more sustainable sources and organic fertilizer, and finding management solutions to large volumes of organic byproducts.
Individual states and provinces are also coming to the table with creative programs to support the industry. In Wisconsin, the state-funded Focus on Energy program has provided incentives that have increased the number of farm-based projects from zero to 22 in the past six years. Wisconsin is keen to convert the manure from its 1.4 million cows and the byproducts produced by its massive cheese and dairy industry into the electricity that will help the state achieve its renewable portfolio standard of 10 per cent renewable-derived energy by 2015. Today, more than 20 states have renewable portfolio standards that include biogas. In Canada, the province of Ontario has introduced feed-in tariffs that guarantee an elevated purchase price of $0.11 per kilowatt hour (kWh) for renewable electricity. Perhaps the most substantial incentive, still in bill form, is H.R. 7097, a U.S. federal bill that provides a tax credit of US $4.27 (C$5.27) per million British thermal units produced. The bill is co-sponsored by Obama’s new Chief of Staff, Rahm Emanuel, which will help this bill’s chance of getting passed into law.
While much progression is being made, it is unlikely that North America will see the same kind of exponential growth that occurred in Germany between 2002 and 2007, when the number of anaerobic digesters increased from approximately 200 to more than 4,000. For starters, North America is unlikely to see prices for biogas reach the feed-in tariff levels of Germany, which reached as high as €0.21 per kWh (C$0.342) and made the development of smaller-scale biogas plants (less than 500 kW) financially viable. It appears instead that North America is following Denmark’s growth model, where a feed-in tariff rate of DKK 0.745 (C$0.163) has prompted developers to build larger, multi-party biogas plants and to use byproducts and manure as substrates, rather than purchase commodities such as corn, as is economical in the German market. This is beneficial as it provides the impetus to find better uses for the millions of tonnes of organic byproducts that go to waste across the continent every year. Either way, the North American biogas industry is in the luxury position of being able to look across the pond and draw lessons from an already-mature industry. “The history of agricultural biogas is the history of much too many mistakes being made and repeated,” said Jens Bo Holm-Nielsen, one of the world’s leading minds in the field of biogas from the University of Denmark. “Now we are getting a golden chance to adjust and get it right.”
Ryan Little is co-founder and vice president of business development at StormFisher Biogas. Reach him at rlittle@stormfisher.com