Jun 01 2009

Holy Cow! ClimateSmart Program Signs First Dairy Project

Posted by: Katie Romans

PG&E's ClimateSmart program, which allows customers, like Fresh Choice, to voluntarily balance out the greenhouse gas (GHG) emission reductions associated with their energy use, today announced its first dairy contract for 75,000 metric tons of GHG emission reductions. The contract with California Bioenergy is the program's third GHG emission reduction project -- the first two were forestry projects located in Mendocino County and the Santa Cruz mountains.

What does this mean for ClimateSmart customers? I had a conversation with Neil Black, chief operating officer of California Bioenergy, and Robert Parkhurst, PG&E manager of climate protection and analysis, to determine just that.

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Q: What will this contract do?
A: PG&E's ClimateSmart program has agreed to purchase 75,000 metric tons of greenhouse gas (GHG) emission reductions resulting from the capture and destruction of methane generated by an anaerobic digester on one of California Bioenergy's first projects.

This contract will balance out the GHG emissions resulting from the energy use for one year of more than 15,000 homes in PG&E territory.

Q: How does this project work?
A: Manure from the dairy cows is being flushed into a large, uncovered lagoon.  This water-manure mixture is an anaerobic (or non-oxygen) environment in which bacteria break down the manure and release methane, a greenhouse gas which is more potent than carbon dioxide. Under the contract with the ClimateSmart program, the dairy will trap and destroy the methane before it is released into the atmosphere.

Q: How will it trap the methane?:
A: California Bioenergy's first test site will be a covered lagoon.

Q:  What are the impacts on dairy's water use?
A: Dairy farms are carefully designed and monitored to use water efficiently. The farmers work closely with the Water Board to make sure that all nutrients are used at agronomic rates. The farm is a closed-loop process - where the water is used to clean the facility and flush the manure (and for other uses). This water is stored in a lined lagoon. This nutrient rich water is in turn used to irrigate and fertilize the farm's crops, which greatly reduces and often eliminates the need for oil-based commercial fertilizer. The crops that result are then consumed by the cows and provide the nutrition that cows need (in addition to other feed stocks) to produce milk. The result of the digester process, which CalBio is adding, is that the effluent water is an even a better natural fertilizer since the nutrients are more available for crops to utilize.

Q: What is a digester?
A: A digester is an anaerobic (non-oxygen) environment where bacteria break down organic material, in this case cow manure (it could also be food waste, agricultural waste), producing methane.  A covered lagoon is an example of a digester.  (Or you can build holding tanks made out of concrete or steel.  These plug-flow or complete mix digesters often heat and stir the components, breaking down more of the organic material, producing more methane and thus more renewable energy.)  More information is available at http://attra.ncat.org/attra-pub/anaerobic.html#digestion.

Q: What is the return on ClimateSmart customers' investment in this project?
A:  This project generates two environmental benefits. These two benefits require two distinct capital investments: (1) the capture and the combustion of the methane which converts the methane into a far less potent greenhouse gas - carbon dioxide, and (2) the use of the combusted methane to produce renewable electricity in a manner that displaces the use of fossil-based fuels.

The first level of capital investment involves the capture and combustion of the methane by the anaerobic digester and burning it in a flare. It works as follows: The methane is generated by the natural decomposition of manure in an anaerobic environment. To capture this methane, the anaerobic digester collects the manure by flushing, scraping, or vacuuming it into a lagoon or holding tank. The water and manure is then fed into the digester, which can range in design from a covered earthen lagoon to a steel tank. As the manure is digested, methane flows up into the digester gas line. It is then mixed with oxygen and burned (combusted) in a flare.  In this case PG&E is paying for the destruction of the methane.

An alternative to the capture and destruction of the methane by flaring it is using the combustion of the methane to generate electricity, which requires a second level of capital investment. In this alternative approach, an anaerobic digester installs additional equipment either (a) to combust the methane in a manner to generate electricity at the place of capture (e.g., with an engine) or (b) to process the captured methane for shipment in a gas pipeline, which is subsequently combusted to generate electricity. To use the methane to generate electricity, it must first be scrubbed to remove impurities and meet the gas quality specifications required for use in a generator or delivery into the gas pipeline. If a generator is used to send its total or excess electric generation to the power grid, it must be interconnected in accordance with the applicable interconnection standards. If the methane is injected into the gas pipeline, it must first be compressed. A gas meter at the pipeline tap records the amount of gas delivered to the pipeline. The investments needed to generate electricity are significant and additional to those needed to capture and combust the methane through a flare.

The effect of the generation of electricity from the combusted methane is a displacement of the use of fossil-based fuels that would have occurred if the combusted methane had not been used to generate electricity. In this case PG&E is also buying the renewable energy (either through buying the electricity or the cleaned up gas).

Q: What impact will this project have on air quality in the San Joaquin Valley?
A: Local air quality is a critical concern of both PG&E and California Bioenergy. Both companies believe in improving local air quality and combating global climate change.

We believe that both are achievable and that we can meet local air quality requirements while at the same time capturing and destroying the methane generated by the cows. We are working closely with the San Joaquin Valley Air Pollution Control District to demonstrate a new technology that burns the methane in an engine and releases a very low level of "criteria pollutants," in particular NOx.  Our technology partner is PMSI (www.pmsi-inc.com).

The Air District has seen the technology and thinks it is impressive and very well developed.  In addition, the District feels that California Bioenergy's professional approach to owning and operating digester power plants should make them a strong partner for dairymen, who can stay focused on their dairy operations while CalBio brings their expertise in power generation and the protection of air quality.

Q: What are the economic impacts of this project?
A: PG&E is doing something that is innovative. One of the roles the ClimateSmart program serves is to be an early leader in supporting new companies and new industries that will decrease greenhouse gas emissions.  PG&E's ClimateSmart program, by contracting for livestock methane projects as a promised buyer of GHG emission reductions, provides the guarantee of future revenues (paid once the project is approved and successfully running). PG&E's investment provides an incentive to development companies, like CalBio, to invest their time and money.

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