Waste Not, Want Not - How Anaerobic Digestion Can Lower Input Costs

Posted by Clare Burns on 21-Jul-2015 09:00:00

Although the cost of an anaerobic digestion plant is high, by using your farm waste to generate heat, electricity and biofertiliser, you’ll save money in the medium to long term and open up new income streams.

How_Anaerobic_Digestion_can_Lower_Input_Costs

 

Turning muck into brass

Imagine if you could take your slurry and turn it into something valuable … Imagine if you could use it to generate electricity that you could use on the farm and sell into the national grid ... Imagine if you could also capture the heat produced and put it to use in farm buildings...

More and more farmers are using anaerobic digestion to turn their farm wastes into energy, cutting their own energy costs and attracting additional subsidies. Some are even selling the electricity to the national grid – and see the investment as more secure and profitable than expanding their herds.

And if that’s not enough, anaerobic digestion also creates a nutrient-rich biofertiliser which studies show works better than chemical-based ones alone.

 

What is anaerobic digestion?

Anaerobic digestion is the controlled breakdown of organic matter in a closed digester vessel. The air supply is restricted to stimulate anaerobic decomposition (unlike composting, which takes place in the presence of air).

This process of decomposition, accelerated in the presence of bacteria, produces a methane-rich biogas, which can then be turned into heat and electricity through cogeneration – also known as Combined Heat and Power (CHP).

In its simplest form the process is:

biomass + bacteria = biogas + biofertiliser

Check out this illustration to see how it works on-farm.

It isn’t a new idea. In 1895, street lamps in Exeter were powered using the same process. And the method has been used on farms for a number of years. The difference now is that technological advancement, financial incentives and years of rising input costs on-farm have made it commercially attractive on a small scale.

 

What does it mean for my business?

Input costs have recently fallen slightly, but are still high. There has been a decrease in fertiliser, seed and fuel costs – however the cost of oil won’t always be this low (which means that energy and fertiliser costs will only go one way in the medium to long term). Moreover, the small dip in input costs has been dwarfed by the huge falls in commodity farmgate prices in the past year.

While you can’t control the commodity or energy markets, you can control your energy input costs – if you generate it yourself. By using on-farm anaerobic digestion, you can not only produce biogas to lower your fuel bills, you can potentially offset other costs by selling energy back into the grid. You can also lower both your fertiliser and your waste removal costs...

 

Isn’t the cost of an anaerobic digestion plant high?

True, anaerobic digestion requires substantial up-front capital. However, the cost of an anaerobic digestion plant might not always be as high as the figures you have seen. For example, if you already have good access and good slurry storage and handling facilities, this can significantly lower the overall investment.

What’s more, there are a number of funding streams available. The banks are becoming more receptive towards anaerobic digestion as a stable farm diversification option. There are also loans available through the government’s On-Farm Anaerobic Digestion Loan Fund.

There are even grants available to help cover the cost of investigating the economic and environmental benefits of anaerobic digestion for your farm.

 

Double subsidies

If you generate renewable energy on your farm, you’ll also attract not one but two subsidy streams.

The first subsidy is called the Feed-in Tariff and is paid for every kWh of electricity generated through anaerobic digestion. The electricity can also be sold to the grid, generating even more income.

If Combined Heat and Power is used to turn the biogas into energy, the heat is also captured. This is often used to maintain the temperature of the digesters on the plant, but in the right circumstances it can be used to heat water and buildings. In this case there’s an additional subsidy per kWh through the non-domestic Renewable Heat Incentive.

Support from both of these subsidies is index-linked and guaranteed for a 20-year period.

 

Now I’m interested.

And so now you’ll want to know what the return on investment is. It depends on the plant, the feedstock, the efficiency of the CHP and the subsidies. There are a number of factors, but the return on investment can be around five to seven years. Ask a good energy consultant for essential expert advice on the potential cost of an anaerobic digestion plant at your farm. They will scope your project, conduct a feasibility study, handle any necessary planning applications and ultimately implement your project successfully.

 

Takeaways:

  • A small dip in farm input costs has been dwarfed by huge falls in commodity farmgate prices in the past year.

  • On-farm anaerobic digestion can cut your energy and fertiliser costs and provide additional income streams.

  • Significant ROI can be achieved from an on-farm anaerobic digestion plant within five to seven years, future-proofing your business.

  • An energy consultant is essential to give you expert advice and avoid costly pitfalls.

 

Find out more about how on-farm anaerobic digestion can benefit your business – download our free eGuide: The Essential Farmers' Guide to the Financial Benefits of Waste Energy

The Essential Farmers' Guide to the Financial Benefits of Waste Energy

Topics: Anaerobic Digestion / Biogas, Farming

Clare Burns

Clare Burns is a technical marketer with many years’ experience in the energy arena, as well as in fashion, telecoms and education. Fluent in 3 languages, Clare has worked across Europe. She currently works for ENER-G, a UK manufacturer of carbon reducing, energy efficient products exporting its cogeneration technology across the globe.