Neil KennebeckDirector, Integrated Resource Planning

Dairyland Power CooperativeOctober 20, 2009

Springfield IL Waste-to Energy Workshop

Dairyland Power• 25 Member Cooperatives• 230,000 Class A Meters• 20 Municipal Systems• 1,135 MW Generation• 3,132 Miles of Transmission Lines

• 325 Substations• 600,000 Consumers• 600,000 Dairy Cows• 2,000,000 Pigs• Millions of Poultry

Dairyland Power System

Why Renewable Energy

Driven by state and federal requirements and laws.

Need for energy independence, i.e., to reduce dependence on foreign oil sources.Need to reduce emissions of all kinds.Fear of “global warming”.

CO2 and CH4 are bad guys.

Renewable Energy RequirementsWisconsin Renewable Portfolio Standard (RPS)

2001 0.5% of retail energy sales must be renewable.2003 0.85%2005 1.20%2006 use 2004 as baseline and add 2% by 2010 and 4% more by 2015.

Intention is for state to achieve 10% not individual utilities (a mess).Wisconsin: 10% statewide average by 2015. DPC will need to add ~6% to their current.

Minnesota2005 1% add 1% per year to 25% by 2025.

IowaElectric utilities must offer alternative energy that allows customers to participate voluntarily, but waives Iowa co-ops receiving power under an all-requirements contract from an out-of-state supplier.

Illinois2% by 6/1 2008 ramping up at 1%/yr to 10% by 2015, then 1.5%/yr to 25% by 2025. 75% of all renewables must come from wind.

These percentages are changing rapidly as one state tries to outdo the other.

DPC Renewable Plan

Add 20-40 MW of renewables per year.Medium-scale anaerobic digester and LFG sitesUtility-scale wind and biomass

Meet or exceed regulatory requirements.Shooting for 25% by 2025

Diversify among intermittent and dispatchablerenewable resources. Reduce fuel price risk and volatility.

Target new coal for cost level of renewables portfolio.

Bolster rural economic development.

The Topic of Discussion

With this product remember to (S)hip(H)igh (I)n (T)ransit.First projects will target ~1000 head dairy herds.Will produce 750 kW of power using cow manure and food wastes in a 9:1 ratio.

DPC Developed Digester Program

DPC developed a program for the farms needing waste management tools.Reviewed a wide variety of technologies and vendors.DPC wants to enhance the success of the farms it serves.Program is renewable and distributed generation.

Technology Review

Cellulose breakdown: weeksHemicellulose, fat and protein: daysSugars, fatty acids, alcohols: hours

The “bug’s” menu has a big impact on methane production rates and volume.

Types of Digesters

Covered Lagoons: 0.5 -3.0% total solidsComplete Mix: 3-10% total solidsPlug Flow: 10-13% total solids

Temperature Regimes:Psychrophilic: 50 - 77 FMesophylic: 77-104 FThermophilic: 120-140 F

Digester Temperature Regimes

0

5000

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15000

0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50

Time (days)

Biog

as P

rodu

ctio

n (m

l/l) Thermophilic

Mesophilic

Psychrophilic

DPC First System Choice

Above ground complete mix thermophylicDigestion efficiency ~75% vs. 45% (mesophilic plugflow)2 cows/kW vs. 4-5 cows/kW for mesophilicplug flowAugmented with food wastes Remote controlled and monitored reciprocating engine

DPC’s Plan for Biogas Resources

Manure DigestersTarget 5 MW/yr x 5 yrs (1000 head herds)

2000 head most economical but are not prevalent in Western Wisconsin

Major portion of DPC distributed generation planwrestling with generation on distribution lines

CO2 mitigation, will offset coal. Equivalent to not emitting 36,200 tons CO2/yr/1000 headTechnically, it will also reduce system losses, offsetting coal generationCurrently three projects are up and running, the fourth and fifth will be on line later this year or early 2009Engine lead times are becoming an issueThese two projects will be PPAs

Anaerobic DigestionModel 1:

Farmer owns digester.DPC owns electric generation and interconnection.DPC has contract with farmer for gas.

Gas is bought by the million Btu, not indexed to NG, coal or anything else, based on project need.Payment is made to financier until digester is paid for then payment transfers to farmer.DPC will retain renewable attributes and future carbon credits.DPC will share carbon credits for consideration in the price of either gas or electricity.

DPC and farmer have contracts with third party to operate and maintain entire project.

Model 2:DPC will consider PPA or any contractual arrangement that works for all parties.The gas contract cannot be the only cash flow consideration, the value of nutrient mineralization, weed seed and pathogen kill, de-odorization, etc., must also be factored into cash equation.If farm retains renewable attributes including carbon credits, DPC will pay “Avoided Cost”.

Anaerobic Digestion

Model 1may be out because:Engine reliability has been abysmal

Without storage engine runs 24/7 reducing electric valueCapacity factors of 53% and 54 % in 2007 & 2008Need capacity factors over 80% to be economical

Substrate quality is all over the boardGas clean up has been inadequate, need to reduce moisture and siloxanes in addition to H2SDigesters have performed well in producing gas

Gas Production 225 CFM or 8.8 MMbtu/hr

Technology Review

Overall performance of manure to electricity has been poor.The anaerobic digestion process works very well.Gas chemistry and engine performance have been very problematic.

Substrate chemistry variability is a problem

Applying Lessons LearnedHave fuel/air module failures and ongoing problems.Had a turborcharger failure.Had lube oil problems.Had engine/digester control issues resulting in wild output variability.Had gas filter/blower bottleneck engine output.Siloxanes have abraded pistons and cylinder wallsHad catastrophic engine crank shaft failures 2.Have changed engine manufacturer.Found we don’t need the “SlurryStore”.Will bury all future piping and/or place in building.Farmer can’t throw boots, etc., in manure, it plugs pumps.Are planning to put everything under one roof.We can streamline permitting process by using actual data.

Lessons Learned

Entering streams: Manure 90%, food waste 10%Exiting Streams: Digestate 95% Biogas 5%85-90% reduction in raw manure BOD.46% reduction in total solids.25% conversion of organic nitrogen to inorganic form.Cows like bedding, lay down more and make more milk.Solids can be classified as “organic composted cow manure” and sold as such.Fertilizer nutrient value largely retained in liquid portion.

DPC’s Plan for New Biogas Resources

Plan to develop comprehensive waste to energy program. Currently conducting technologyreview to match the right technologyto the various waste streams.Reviewed engine efficiencies, reliability and capital costs to achieve the optimal economics.Concluded the engine may have to go, can be retained with more complete gas clean-up

DPC’s Plan for New Biogas Resources

DPC is working with a group to develop an integrated digester and gas cleanup modulesEntire system will be factory made and truck transportable

Digester will be an up-flow sludge bed reactor. Cleanup system will meet natural gas pipeline specifications

Technology Review

Anaerobic up-flow sludge bed technology.Short residence time 5 days vs. 22 therefore less expensive tankHigher methane content in gas streamSmaller tanks lower cost 250 head per tank, can address smaller herdFactory constructionTransportable on flat bed trucksBank can pick it up and move it

Biogas Clean-up

Under Review for gas clean-upPressure Swing AbsorptionMolecular Sieve TechnologyLiquid – Gas Contact Scrubbing

Plan Demonstration

Westby Wisconsin:700 bulls (Accelerated Genetics)550 Jersey CowsWhey waste from the Westby Cooperative Creamery (equivalent to 750 cows in solids content)

Will mix the BS with whey to achieve appropriate solids to water ratioPipe the gas to central location for clean-up and injection into pipelineAccount for btu content, withdraw gas and fire up DPC combustion turbine for peaking purposes and creation of RECs (increased value for on-peak energy)

Future Enhancements

Strip CO2 from gas and use it to grow algaeUse algae to produce biodiesel for the farmUltra filtration and reverse osmosis to remove water from liquid nutrient stream concentrating nutrient to target land need and reduce cost of fertilizing fieldsUse water on farm for animalsUse algae, water and nutrients to grow TalopiafishUse fish water to grow vegetables in green house with excess CO2

On Farm CO2 Reuse

Dairy farms under pressure to reduce “Carbon Footprint” from Wal-MartWal-Mart is looking to “Carbon Footprint” a variety of productsThese activities are all currently underway on a dairy farm out side Baldwin Wisconsin.

Waste Streams Under Study (Identified in just one county)

Poultry Manure150,000 tons per year

Poultry Offal (the blood, guts and gore)59,020 tons per year

Commercial Food Waste StreamsOnions, green beans, potatoes, cooking oils, cheese wastes, eggs and grains~12,000 tons per year

Total ~219,000 Tons Per Year

New Plan

Locate clusters of dairy operations adjacent to NG pipeline.Produce gas and pipe it to central “clean-up” station prior to injection into pipeline.Credit Btus and RECs injected into pipe and take them out as needed to fire a CT.

Benefits ReviewOdor reduction.Greenhouse gas emission reduction.Waste heat utilization reduces use of fossil fuels (propane/oil/coal for electric).Reduced trucking to spread manure.Surface and ground water impacts reduced due to reduced pathogen hence pesticide reduction.Weed seed kill reduces herbicide needs.Mineralized nutrients.Reduced bedding from separation of solids saves farmer $75,000/year for 1000 head herd.Destruction of methane before entering atmosphere.Allows generation at on-peak times.

Overall Renewable Plan Goal

Renewable resources to provide 25% of DPC’s sales for all 4 states by 2025.Turn waste streams into beneficial energy resources.Keep renewable electricity cost at or below the cost of new coal.Produce methane at less than maarket~`$10.00/MMBtu.

Emissions Reduction

Annual (2007) emission reduction equivalent to:

Not burning 312,000 tons of coal. Not emitting 583,500 tons of CO2.85,000 cars off the road per year.Planting 24 million trees.

Dairyland Power Cooperative's

Renewable Energy Projections

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100,000

200,000

300,000

400,000

500,000

600,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Year

MWh

Digesters (Targeted)Norswiss DigesterDaley DigesterBach DigesterWild Rose DigesterFive Star DigesterLake Area LFGTECentral Disposal LFTGETimberline Trail LFTGESeven Mile Creek LFGTETjaden Wind TurbineChandler Wind FarmMcNeilus Wind FarmFlambeau Hydro Station