Manufacturing power from manure
special report Start-ups are finding new forms of energy in an unlikely source: barnyard animals.
Microbe-managing Mother Nature: From energy to E. coli, microbe management is big business.
The next energy source: Barnyard animals
By Michael Kanellos
Staff Writer, CNET News.com
April 10, 2006 4:00 AM PST
Save America's energy. Feed a cow.
That pretty much sums up the work of
Microgy's Huckabay Ridge facility--under construction at a major composting center near Stephenville, Texas, at a cost of up to $11.5 million--will house eight 916,000-gallon digesters, which together are capable of processing the manure of 10,000 cows. The plant will start shipping natural gas (methane) to a customer in the third quarter and, when fully operational, will churn out an estimated 1 billion cubic feet of biogas a year for $4.6 million in revenue.
"Initially it might get a chuckle, but this is real," said Kam Tejwani, CEO of Environmental Power. "We can make money without all of the subsidies and credits you see with other alternative energy projects."
Filling up with biogas
Thermophilic and mesophilic digesters produce biogas, which is made of two-thirds methane (natural gas) and one-third carbon dioxide. Biogas can be used on the farm to run equipment that ordinarily consumes propane or can power an electricity generator. It can also be shipped through commercial gas pipelines, but that would require an additional expense because the carbon dioxide would need to be burned off first.
Unfortunately, good alternative energy ideas aren't easy to find. The energy crisis of the 1970s produced legislative mandates and entrepreneurial ideas to promote wind, wave and solar power, but most of those initiatives faded away when oil prices eventually declined. Ethanol and biodiesel--a combination of vegetable alcohol and gasoline--has its adherents, but some researchers say it is a losing proposition because a gallon of the fuel consumes more energy in production than it provides to a car.
As a result, not everyone thinks the alternative energy business is a great investment. Mark Dubovoy of the investment firm Leapfrog Venture said recently that many ideas touted by start-ups could take a decade or more to pay off and face substantial competition from large corporations.
Still, other venture capitalists are betting on the business for the future,
especially when start-up costs are manageable: Manure, for example, is a
substance of little or no value. Because
At the Five Star Dairy in Elk Mound, Wisc., solid waste processed by a digester is used as cow bedding, which saves the farm $2,000 to $3,000 a month, while the remaining liquids can still be used as fertilizer, according to Lee Jensen, the farm's general manager.
"It actually makes the fertilizer better because it reduces the odor and kills the weed seed," Jensen said. "There are a lot of benefits to the system."
Fed by the waste of 900 cows, Five Star's digester cranks out about 6.5 million kilowatt hours a year--enough to power 600 homes annually. Jensen said the digester, which has been working for about a year, will likely become a profit center for Five Star in a decade, once capital costs are paid off.
In March, meat giant Swift & Co. signed a letter of intent to build a biogas production facility in Grand Island, Neb., and to explore building more at Swift's seven other plants. The biogas from Swift's plants has the potential to generate the equivalent of 25,000 barrels of heating oil a day.
A few U.S. farmers have installed "mesophilic" digesters, which decompose manure in cement vats at ambient temperatures. The manure from 1,000 cows might generate up to 150 kilowatts of energy in this process, about enough to run a farm.
But mesophilic digesters--named for a strain of bacteria--thrive best at temperatures between 75 and 90 degrees. If the temperature drops to freezing or below, energy production stops.
Barnyard energyMicrobe-managing Mother Nature: From energy to E. coli, microbe management is big business.
The next energy source: Barnyard animals
Microgy deploys thermophilic digesters, a different type of technology in which sealed vats are heated to around 130 degrees Fahrenheit for about three weeks. The company argues that the strain of bacteria it uses is more efficient and works 24 hours a day because the weather doesn't affect production.
Thermophilic digesters can also break down waste grease, fats and other byproducts into fuel along with manure. The technology comes from an overseas company called Danish Biogas Technologies, which awarded a license to Microgy in the late 1990s.
"The technology might be new here, but there are thousands of facilities in Europe. Because of higher energy prices over there, the industry developed faster," Environmental Power's Tejwani said. Most European facilities are small, but he estimates that 1,000 manure sites exist in the United States that could export fuel.
Even though the benefits seem fairly clear on paper, farmers have been reluctant to invest in the technology because of initial equipment costs. So some digester manufacturers pay for the technology themselves and turn a profit from selling gas, rather than the equipment. This cuts manure expenses for farmers by not requiring any investments.
Farmers that do operate their own digesters can benefit by using the energy they produce. California cheesemaker Joseph Gallo Farms has a seven-acre mesophilic digester that powers a generator providing about 700 kilowatts of electricity, about half of one farm's electricity needs. Steam from the generator is then trapped and used to run boilers, saving about $2,000 a day in electricity and $1,000 in propane.
"With energy prices the way they are going, this looks like it could be popular," said Carl Morris, chief operating officer for Gallo, which is also building a thermophilic digester at another facility. "The environmental benefits are tremendous. They are not high-tech, strictly speaking, but the engineering is quite complex."
Morris, however, does cite some obstacles to widespread adoption. Unlike Gallo, a relatively large enterprise that is a spinoff from the wine empire bearing the family name, many farms will produce more energy than they can consume.
If farmers don't have the means to easily sell their excess energy as natural gas or electricity on the open market, making the digesters pay for themselves will be tough. To date, the federal government has had to subsidize the construction costs.
Microgy is a long way from profitable, in part because of steep equipment costs. In the fourth quarter of last year, Microgy lost $2 million and reported revenues of $527,000. Revenues were higher before it switched from selling digesters to building and owning them.
Nevertheless, the reasons for adopting the technology are piling up. As Jensen
says, "It doesn't eliminate manure, but it makes it easier to manage."
Microbe-managing Mother Nature: From energy to E. coli, microbe management is big business.
The next energy source: Barnyard animals
By Michael Kanellos
Staff Writer, CNET News.com
April 10, 2006 4:00 AM PST
Save America's energy. Feed a cow.
That pretty much sums up the work of
Microgy's Huckabay Ridge facility--under construction at a major composting center near Stephenville, Texas, at a cost of up to $11.5 million--will house eight 916,000-gallon digesters, which together are capable of processing the manure of 10,000 cows. The plant will start shipping natural gas (methane) to a customer in the third quarter and, when fully operational, will churn out an estimated 1 billion cubic feet of biogas a year for $4.6 million in revenue.
"Initially it might get a chuckle, but this is real," said Kam Tejwani, CEO of Environmental Power. "We can make money without all of the subsidies and credits you see with other alternative energy projects."
Filling up with biogas
Thermophilic and mesophilic digesters produce biogas, which is made of two-thirds methane (natural gas) and one-third carbon dioxide. Biogas can be used on the farm to run equipment that ordinarily consumes propane or can power an electricity generator. It can also be shipped through commercial gas pipelines, but that would require an additional expense because the carbon dioxide would need to be burned off first.
Unfortunately, good alternative energy ideas aren't easy to find. The energy crisis of the 1970s produced legislative mandates and entrepreneurial ideas to promote wind, wave and solar power, but most of those initiatives faded away when oil prices eventually declined. Ethanol and biodiesel--a combination of vegetable alcohol and gasoline--has its adherents, but some researchers say it is a losing proposition because a gallon of the fuel consumes more energy in production than it provides to a car.
As a result, not everyone thinks the alternative energy business is a great investment. Mark Dubovoy of the investment firm Leapfrog Venture said recently that many ideas touted by start-ups could take a decade or more to pay off and face substantial competition from large corporations.
Still, other venture capitalists are betting on the business for the future,
especially when start-up costs are manageable: Manure, for example, is a
substance of little or no value. Because
At the Five Star Dairy in Elk Mound, Wisc., solid waste processed by a digester is used as cow bedding, which saves the farm $2,000 to $3,000 a month, while the remaining liquids can still be used as fertilizer, according to Lee Jensen, the farm's general manager.
"It actually makes the fertilizer better because it reduces the odor and kills the weed seed," Jensen said. "There are a lot of benefits to the system."
Fed by the waste of 900 cows, Five Star's digester cranks out about 6.5 million kilowatt hours a year--enough to power 600 homes annually. Jensen said the digester, which has been working for about a year, will likely become a profit center for Five Star in a decade, once capital costs are paid off.
In March, meat giant Swift & Co. signed a letter of intent to build a biogas production facility in Grand Island, Neb., and to explore building more at Swift's seven other plants. The biogas from Swift's plants has the potential to generate the equivalent of 25,000 barrels of heating oil a day.
A few U.S. farmers have installed "mesophilic" digesters, which decompose manure in cement vats at ambient temperatures. The manure from 1,000 cows might generate up to 150 kilowatts of energy in this process, about enough to run a farm.
But mesophilic digesters--named for a strain of bacteria--thrive best at temperatures between 75 and 90 degrees. If the temperature drops to freezing or below, energy production stops.
Microbe-managing Mother Nature: From energy to E. coli, microbe management is big business.
The next energy source: Barnyard animals
Microgy deploys thermophilic digesters, a different type of technology in which sealed vats are heated to around 130 degrees Fahrenheit for about three weeks. The company argues that the strain of bacteria it uses is more efficient and works 24 hours a day because the weather doesn't affect production.
Thermophilic digesters can also break down waste grease, fats and other byproducts into fuel along with manure. The technology comes from an overseas company called Danish Biogas Technologies, which awarded a license to Microgy in the late 1990s.
"The technology might be new here, but there are thousands of facilities in Europe. Because of higher energy prices over there, the industry developed faster," Environmental Power's Tejwani said. Most European facilities are small, but he estimates that 1,000 manure sites exist in the United States that could export fuel.
Even though the benefits seem fairly clear on paper, farmers have been reluctant to invest in the technology because of initial equipment costs. So some digester manufacturers pay for the technology themselves and turn a profit from selling gas, rather than the equipment. This cuts manure expenses for farmers by not requiring any investments.
Farmers that do operate their own digesters can benefit by using the energy they produce. California cheesemaker Joseph Gallo Farms has a seven-acre mesophilic digester that powers a generator providing about 700 kilowatts of electricity, about half of one farm's electricity needs. Steam from the generator is then trapped and used to run boilers, saving about $2,000 a day in electricity and $1,000 in propane.
"With energy prices the way they are going, this looks like it could be popular," said Carl Morris, chief operating officer for Gallo, which is also building a thermophilic digester at another facility. "The environmental benefits are tremendous. They are not high-tech, strictly speaking, but the engineering is quite complex."
Morris, however, does cite some obstacles to widespread adoption. Unlike Gallo, a relatively large enterprise that is a spinoff from the wine empire bearing the family name, many farms will produce more energy than they can consume.
If farmers don't have the means to easily sell their excess energy as natural gas or electricity on the open market, making the digesters pay for themselves will be tough. To date, the federal government has had to subsidize the construction costs.
Microgy is a long way from profitable, in part because of steep equipment costs. In the fourth quarter of last year, Microgy lost $2 million and reported revenues of $527,000. Revenues were higher before it switched from selling digesters to building and owning them.
Nevertheless, the reasons for adopting the technology are piling up. As Jensen
says, "It doesn't eliminate manure, but it makes it easier to manage."