AD and poultry – a perfect match
There is no industry better placed than poultry to make the most of government incentives for anaerobic digestion (AD) due to the availability of feedstocks, together with the heat and electricity demand.
Poultry manure is one of the most gas productive manures available, yielding over 100cu m of biogas per tonne, compared with 20-50cu m/t for cattle slurries/manures.
But its inclusion is limited by its high nitrogen concentration, which can kill off the bacteria within the AD plant. Typically, chicken manure will not exceed 30% of the mass balance of an AD plant, and additional feedstock will be needed either from additional waste streams or energy crops.
This could be changing, however, and there are technologies being used in central Europe that effectively wash out a significant proportion of the nitrogen into a concentrated liquid fertiliser.
Heat demand
Most AD plants in the UK struggle to find a constant, local use for their heat which is over 50% of the energy made available by a Combine Heat and Power (CHP) unit. This is due to the cost of infrastructure needed to capture and distribute the heat to an end user.
But not so the poultry sector, where energy is typically the second largest cost and, being able to produce both heat and electricity on site, allows a poultry farm to take control.
At present, there is no Renewable Heat Incentive (RHI) tariff available for heat from CHP or biogas boilers above 200kW. But this is expected to change later this year and the availability of an RHI tariff will provide further upside to a project that has a local heat use.
And at the end of the AD process, there is a significant tonnage of digestate, which will typically be applied to land as a fertiliser. Since poultry farms have experience of selling manures to local farmers there is already an established market.
Economics
The capital cost of a 500kW plant is likely to exceed £3m, but this will depend on a number of factors including road access, exchange rates, ground works and ease of connection to the grid. It is not a small undertaking and having the right team from the outset is essential.
An AD plant, sized correctly to a farm’s needs, can provide sufficient energy savings and long-term stability of energy prices to allow a poultry business to become increasingly competitive over time, as well as benefiting the sites’ odour and manure management systems.
Incentives for anaerobic digestion
Feed in Tariffs (FiTs)
The FiT has been the key driver behind the adoption of anaerobic digestion in the UK, with the tariff rising each year in line with inflation.
The current rates for AD operators are:
- ≤ 250kW = 15.16p/kWh
- >250-499kW = 14.02p/kWh
- >500-5000kW = 9.24p/kWh
But these payments could be subject to “FiT degression” – a policy introduced by government to limit the budget’s exposure to excessive market adoption. If there are more than 9MW of total installed capacity of plants smaller than 500kW in one year, then tariffs will fall by 20%. For larger plants, total installed capacity would need to exceed 76.9MW for a 20% degression to take place.
If uptake for the FiT in the first quarter of 2013 continues at the same rate for the remainder of the year, then a 20% reduction in the FiT for plants smaller than 500kW can be expected from April 2014. Anyone putting up a plant now is advised to undergo pre-accreditation before the end of 2013, to guarantee the existing tariff rate.
Renewable Heat Incentive (RHI)
The anticipated raising of the RHI limit above the current 200kW capacity threshold provides further upside for an AD plant located beside a heat demand.
While still under consultation, the RHI for AD is proposed at the following levels:
- ≤ 200kW = 7.1p/kWh
- >200-499kW = 5.9p/kWh
- >500kW= 2.2p/kWh
Currently RHI is only available for plants that produce less than 200kWth at 7.1p/kWh. This level of heat production is only going to be of interest to a small poultry operation.
A site with six large broiler sheds may demand in excess of 1MW of heat energy an hour in winter and so the introduction of these higher bands is critical.
A date for announcement on the RHI amendment is expected at the end of the summer, with the introduction of that uplift early next year.
A worked up example:
For an operational 499kW AD plant, FiT payments from 1 April 2013 should equate to approximately £560,000 a year. If this plant was beside a farm demanding six months of constant heat, it could receive in the region of £118,000 RHI payments a year if the proposed tariffs are introduced.
What should not be overlooked is that this heat consumption would also offset a large heating bill. In this example, if LPG was being used, then the savings may be in the region of £130,000.