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Ontario Canada:Open for Biogas Business!
Chris DukeEnvironmental Management Branch
Ontario Ministry of Agriculture, Food and Rural AffairsGuelph, Ontario, Canada
Harrisonburg Virginia Biogas Workshop
31 March 2010
Today’s Presentation• Introduction to Ontario, Canada• Ontario’s Feed-In Tariff and Green Energy Act• Ontario’s biogas approvals process• Considerations for doing biogas in Ontario
• Biogas Business in Ontario1. Best Feed-In Tariff in North America2. Clear approvals processes designed for green
energy systems
152 million consumers within a day’s drive of Toronto
830
681 673
478
374344 332 324 315
278 257 246199 194 187 186
-100
100
300
500
700
900
Australi
a
Netherl
ands
Poland
Ontario
Belgium
Sweden
Switzerl
and
Greece
Austria
Norway
Czech
Rep
ublic
Portugal
Denmark
Hungary
Finlan
d
Irelan
d
Bill
ion
US
$ GDP of various countries and the Province Ontario
Ontario’s GDP Compared to Other Countries Larger than most other countries
Why Biogas?• Odour reduction• Pathogen reductions• Reduced GHG emissions• Renewable energy production• Manage society’s waste• Utilize food byproducts• Improve fertilizer value of manure• New revenue on the farm• 3600 MW coal-fired power plant
– Largest pile of coal in the world– Ontario to phase out coal by 2014!
Early Days of Biogas in Ontario
• Early 1980s – several small systems built for electricity and single-cell protein
• Net-metering• Renewable Energy Standard Offer Program
– Mainly developed on wind price– Included biomass
• Anaerobic digestion [AD] of manure
Where have we been??2005• One energy-based digester in Ontario,
running on manure• No funding• No knowledge on blending off farm
source material• No clear legal pathway to accept off farm
material• Only net metering option – 50 kW max
(increased to 500 kW)
Where are we now?Industry is developing• Good knowledge on utilizing off farm
materials• Ability to sell power on grid at 14.7 to 19.9
¢/kWh • Clarity on ability to connect to electrical grid
Ontario Biogas Systems Financial Assistance Program
• $11+ million funding• 28 Systems (13 generating power, remainder
under construction)• Agri-Energy Producer’s Association
(www.apao.ca) • Training with German expertise
Biogas Activity in Ontario Today• 11 operating agrifood biogas systems
– from 100 kWe to 1,600 kWe plus one for heat• 1 municipal source-separate organics pilot system (Toronto)• Several food/beverage wastewater cleaning systems
• 13 projects near completion – Farm-based, mostly dairy farms, mostly 250-500 kWe– Most have funding through Ontario Biogas Systems Financial
Assistance Program
• 2-3 projects starting construction 2011
• Several non-farm projects proposed, in design/approvals– Biggest proposed is 2.8 MW centralized system– Several municipal source-separated organics projects being
considered
Biogas Companies in Ontario• Manure and food waste as primary inputs• 4-5 established Ontario-based design/construction
companies building systems (all are small)• Both “turn-key” and farmer-managed project
development• 8 biogas companies Ontario-based companies
have built biogas systems– Several consulting firms, laboratories, electrical
companies, equipment manufacturers, etc
Ontario Biogas Systems Financial Assistance Program
• $11.2 M Grant Program to kick-start the industry– 46 feasibility studies (70%, up to $35,000)– 21 construction projects (40% up to $400,000)
• Lots of construction to go with 2 months left
– Industry development • Ontario Biogas Operators’ Training Course with IBBK• Agri-Energy Producer’s Association of Ontario www.apao.ca • Grid connections project to overcome
hurdles• GHG measurements and protocols
• Program ended 31 March 2010
Key Drivers for Biogas in Ontario1. Feed-In Tariff program under the Green Energy Act
a) New, clear, long term economic returns
2. Clear approval processes for Green Energy: a) Ability to mix food-byproducts at on-farm and
non-farm biogas plantsb) Grid connections
Green Energy and Green Economy Act(a.k.a. ‘Green Energy Act’)
• Introduced September 2009• Key elements include:
• Feed-In-Tariff system to provide guaranteed electricity prices for renewable energy projects
• Streamlined approvals for renewable energy projects• Developing a smart grid which will support this new
energy supply. • Focus on communities and aboriginal groups
• Underlying this:• Economic stimulus• Jobs
Feed-In Tariff (FIT) Biogas Priceshttp://fit.powerauthority.on.ca
Location Restriction Size Contract Price (¢/kWh) CDN$
On-Farm ≤ 100 kW 19.5On-Farm >100 kW ≤ 250 kW 18.5
- ≤ 500 kW 16- >500 kW ≤ 10 MW 14.7- >10 MW 10.4
• “On-Farm” means a Nutrient Management Regulated Mixed AD system• Additional biogas bonuses for community projects (0.4 ¢/kWh) and for
projects with aboriginal participation (0.6 ¢/kWh).• “Contract Price” reflects on-peak hours 11:00 am to 7:00 pm during
business days, and off-peak hours are any other time, assuming 75% operating capacity. • 1.35 X price on-peak (~20% of time), 0.9 X price off-peak
Implications of Biogas FIT Price• A good price, developed with an 11% return-on-investment
– Developed with manure and food-waste in mind• Will get early adopters moving• Will get people to reconsider (for projects that did not appear to
be economical in the past)– Former prices was 11 ¢/kWh ($CDN)
• 20 year contract at current price• Program review every 2 years
– Review includes evaluation of uptake, success
Ability to Mix Off-farm Materials
1. If > 75% agricultural source material, and if > 50% of ag material is manure, and system is on a farm, then can apply for “Regulated Mixed Anaerobic Digestion Facility” (RMADF) rules:– Prescriptive checklist, prescriptive list of off-farm materials, clear
requirements (e.g. max 10,000 m3/year, 200 m3 stored on-site)– Approved by Ontario Ministry of Agriculture, Food and Rural Affairs
or2. If can’t satisfy RMADF rules, or want more flexibility, then new
“Renewable Energy Approval” (REA) through Green Energy Act: – Flexibility (location, different quantities or blend of materials)– Additional review (consultations, natural feature setbacks)– Approved by Ontario Ministry of Environment
and for both of these:If > 50% of input material is agricultural, then all the digestate can be land-
applied with manure’s nutrient management rules
Quantities of Biogas Inputs in Ontario• Agricultural Resources:
– OMAFRA estimate : ~1 million tonnes manure/year reasonably available for biogas system
• ~7,500 Dairy Farms (average size ~85 dairy cows)• ~19,000 Beef Farms, 375 farms > 300 Animals• ~3,000 Finishing Hog Farms, 225 farms >1800 hogs
– 3.3 million hectares of crop production
• Food and Waste Resources:– >3000 food processing facilities
• $32.5 billion/year business– Producing ~ 5 million tonnes/year of by-products suitable for biogas– > 500,000 tonnes/year of organic material currently going to landfill
Grid Connections• Old infrastructure, lack of 3-phase lines in many rural areas
• New fast-track entry to approvals process for smaller renewable systems– <250 kW on <15 kV line (many rural lines)– <500 kW on > 15 kV line
• New rules for payment of grid improvements1. On-farm costs paid by generators (farmer)2. Expansion to local wires split by generator and distributor
(owner of wires) – distributor pays first portion
3. Grid communications/safety systems paid by distributor
Potential and Actual Number of Biogas Systems[dairy farms and generator size]
• Small farms will have smaller biogas systems• Larger farms with larger biogas systems likely more financially viable• 3,600 less than 100 cows, 590 farms over 100 cows
Dairy farm numbers, Farm numbers with biogas systems, andBiogas system average and range of size
0 2 6 2 80
500
1000
1500
2000
2500
3000
< 50 50-100 100-150 150-200 > 250
Dairy herd size
Num
ber
0
100
200
300
400
500
600
kW(e
)
Farm numbers, 2009 Farms with biogas systems kW size
Other Considerations: Space• Lots of space!
– Most livestock barns have good setbacks from neighbours
– Lots of land for land-application of digestate
Other Considerations: Cold!
• Must design for at least -30˚C– Freezing of over-under
pressure valves, pipes, gas storage areas, etc
– Note: it’s also hot: commonly +30˚C or more in summer
Other Considerations: Energy Crops?• Corn silage ~ $50/tonne to produce in Ontario• Systems using only energy crops are likely marginally
economical under FIT• Energy crops may make sense if:
– Extra revenue from co-gen heat use;– Use of existing infrastructure (bunk storage, tractors,
etc); or– Blended to increase % farm-based
material • Allows more off-farm material to
be brought in• May enable system to capture FIT
bonus for “on-farm” systems
Other Considerations: Cost
• Farmers have money and willingness to invest– e.g. dairy farmers have supply management system
• Must keep cost reasonable because FIT is not too high– < $7,000/kW: minimize bells and whistles– Must rely on existing infrastructure if possible
Making Biogas Happen in Ontario
• Environmental regulation updates– Nutrient Management Act– Renewable Energy Approval
• Sector development– Research– Training– Supporting companies– Conferences and trade shows– Technical knowledge transfer– Communications and communicating
• Biogas association: AgriEnergy Producers’ Association of Ontario– www.apao.ca
OMAFRA Ongoing Support• Communications• Tech support• Sector support• Research• Regulatory review• Training• Goals:
– Clean water– Greenhouse
gas reductions
– Farm incomes– Business
development– By-products– Food sector
Training Courses and Learning
• Multi-day training courses• Workshops• On-site technical support from OMAFRA• Conferences• Agricultural trade shows• Tours• Web sites• Videos
What’s next in Ontario?• Green Energy Act implementation
– 2 years with current FIT prices– Renewable Energy Approval development
• Potential barriers and hurdles– Availability of inputs?– Building economical systems at small and medium
livestock facilities, <100 kW– Finding use for heat from cogeneration– Electrical grid limitations
• Lots of potential!
More Information about Biogas• Ontario Ministry of Agriculture Food and Rural Affairs (OMAFRA)
– www.ontario.ca/biogas• OMAFRA Biogas contacts:
– [email protected]– [email protected] – [email protected]
Ontario Renewable Energy Facilitation Office: www.mei.gov.on.ca/en/energy/renewable/ [email protected]
Agri-Energy Producers Association of Ontario:www.apao.ca
Photo courtesy CHFour Biogas
Come to London, Ontario in March 2011!
www.biogasconference.ca
Thank you
Questions?
Ontario Biogas Companies• Design - Builders1. CH4 = 82. Powerbase = 43. ValBio = 14. Stonecrest Engineering = 15. PlanET = 56. GMA = 17. Dairy Lane = 28. CCS-agriKomp Inc. = 1• Consulting
– Sprout Biogas, Yield, Ontario Biogas, Angus Power, • Equipment
– 2G, Jenbacher, Tormont, building contractors, heating, etc.• Electrical companies
– Several consulting engineering, manufacturing, control systems, etc.