Cutting the carbon tax bill

Quantum sells all the electricity generated on site to A.J.Bush & Sons<br>Credit: T. Colley
Quantum sells all the electricity generated on site to A.J.Bush & Sons
Credit: T. Colley

An Australian project that derives biogas from meat waste to generate power demonstrates the scale of both the economic and environmental benefits, as well as how such schemes can aid a national electricity network during peak demand, writes Tracey Colley.

Achieving the upmost resource recovery is part of the way A.J. Bush & Sons, from Beaudesert in Australia’s southern Queensland, says it stays competitive. As a part of a long-standing meat rendering industry the company maximises the value of the by-products of processing. Optimising bioenergy is part of its overall business approach to sustainability, and an added impetus to its drive for efficiency is an annual carbon tax bill each year of A$2 million ($2.1 million), caused mostly by having coal-fired boilers that heat process water.

One way of cutting this liability is through the production of electric power from biogas derived from the meat waste.

It was money from the federal government in 2005 that set the company on its journey into biogas production. Some A$715,000 came from the Food Innovation Grant programme, which added to an earlier, smaller grant from the Queensland State Government to allow the company to evaluate the feasibility of biogas capture.

A.J. Bush developed a project at its Beaudesert site in co-operation with Quantum Power that sees the meat renderer take responsibility for the gas treatment system and everything downstream, including a covered anaerobic lagoon (CAL) and gas capture pipework, While, Quantum owns the project’s gensets, and is responsible for their operation and maintenance. Quantum also sells all the electricity generated to A.J.Bush at a discounted price as part of a long-term power purchase agreement. Historically the meat renderer imported its total electricity requirements from the grid.

Today coal-fired boilers at the plant still generate steam for the company, which it uses to process the fairly constant supply of non-meat by-products it receives from poultry, pork and beef processors in southern Queensland and northern New South Wales. The company renders about 4000 tonnes of biomaterial over a five day working week, and the plant operates 24 hours a day, 52 weeks per year, with three shifts, from Monday morning until midday Saturday.

Fat, bone and slaughter floor materials yield tallow and meat & bone meal, while poultry by-products produce poultry oil and poultry meal. A.J.Bush hydrolyses poultry feathers and dries them to produce hydrolysed feather meal. Some 65 per cent of the weight of raw material received is water and the remainder yields tallow and protein meal.

Australia retains its status as a country free of bovine disease BSE, so feedstocks from within the country require no extra sterilisation or pasteurisation other than for control of normal bacterial pathogens, and no limitations exist on which material can be used for biogas production. The plant produces around 65,000 tonnes of rendered tallow, oil and protein meals each year.

All of this activity means the plant consumes about 1000 MWh of electricity per month and has a peak demand of about 2.2 MW.

The biogas project started in April 2005 with a trial version of a CAL, which held 2 million litres of wastewater. It had a 1.5 mm thick high-density polythene cover, which was operated with a ten-day residence time. Its success led to the commissioning of a CAL with a capacity of 26 millon litres in 2007, which is 6 metres deep and can hold 28 days’ production of wastewater. The new CAL’s covers are secured around the edge of the pond with concrete trenches and rise and fall depending on gas generation and usage rates.

Gas continues to accumulate over Saturday afternoon and Sunday, when the main processing plant is idle, and it falls gradually over the week as the gas volume and pond cover lowers. The pond cover includes safety vents, which allow biogas to escape if the pond cover rises to a certain height above the water level. This involves the use of 0.5-metre risers attached to the underside of the vents.

The pH control of the influent is critical to biogas production rates, so maintaining the pH at between 6.6 and 7.6 through the addition of lime has been required on occasion.

The wastewater leaves the CAL by gravity flow (an inflow-outflow balancing system) and is then further treated in other on-site ponds before being recycled for irrigation of crops and pastures.

A manual pumping system removes rainwater that accumulates on the CAL cover during the wet season, and the area has an anti-personnel fence to prevent unauthorised access.

Power generation

Generation of gas occurs at a rate of about 220 m3/h. Fans draw gas from both ponds through ports attached to the top of the cover into pipework that transports it uphill to the gas treatment skid. The uphill location of the skid and the elevation of the pipework from the pond to the skid allows condensate to drain back to the pond. The skid includes a heat exchanger that lowers the temperature of the gas to 3-9à‚°C, which removes most of the condensable materials from it. A flare unit forms part of the skid and burns excess gas whenever a generator is taken off line for maintenance.

Biogas travels from the skid to two 0.5 MW Shengdong engines, the first of which was commissioned in July 2010 and the second in March 2011.

Electric power generation from the gensets has amounted to about 200,000 kWh per month, or about 20 per cent of the total site electricity consumption, with an electrical efficiency of about 33 per cent. However, availability has been much lower than hoped because of operational and quality issues associated with the engines.

As the cost of the engines was less than a biogas treatment unit to remove hydrogen sulphide (H2S), the decision was made not to include a stage for the removal of the acid gas, but instead to sacrifice the engines. The residual H2S level in the gas after treatment is generally less than 1200 ppm.

Major modifications had to be made to the engines to ensure they complied with Australian standards for electrical and gas safety, and could run without being continuously attended to, but there are still operations that must be performed manually, such as inspections, and checks on the coolant.

Economics and the environment

Grid connection and export is not viable because of unfavourable conditions for connection to the grid. The extra capital works which would need to be installed due to the network safety requirements of network owner Energex would cost about A$300,000. Also Australia does not have a feed-in tariff (FiT) or equivalent for cogeneration, so each individual CHP plant operator has to negotiate with the owner of the network into which they want to export. This creates a huge power imbalance between the plant owner and the network owner, as generally there is no competition and no opportunity for direct export to another electricity user nearby.

This is the case with A.J. Bush and is an inequity that has been identified by Australian government reviews of cogeneration and the electricity network, along with the inefficiencies which result from it. However, little has been done to remedy the situation.

More significantly the A.J. Bush plant’s location is in a region that has serious issues over peak demand constraints. In fact the network company owns diesel gensets near the plant that operate only at times of peak network demand for power. So the biogas gensets would be able to synchronise with the grid but they do not yet export electricity to it.

However, the plant’s use of biogas could significantly reduce the company’s liability under the country’s carbon tax, which came into force on 1 July 2012.

A.J. Bush has to make its CO2 emissions known under the National Greenhouse and Energy Reporting Scheme, according to which its site produces 82,197 tonnes of CO2 equivalent (tCO2e), two thirds of which is from the coal-fired steam boilers. At a carbon price of A$23/tCO2e, this equates to a carbon tax of A$2 million per year. In effect the site’s annual use of coal is about 23,140 tonnes, which equates to 622,775 GJ/year of boiler fuel.

Assuming that a biogas boiler would have about the same efficiency, this means that the current system could provide about 50 per cent of the boiler fuel requirement and 1000 kW of biogas-generated electricity. This would not be enough of a greenhouse reduction to bring the total site emissions below the 25,000 tCO2e threshold for inclusion in the carbon tax scheme, but it would significantly reduce the liability associated with the tax.

Next phase

The next phase in the project involves four developments. The first will be to install additional pond capacity so that the percentage of organic matter degraded anaerobically will rise. Second is the reduction in the use of boiler fuel by allowing cogeneration. Here heat recovered from the genset units would raise the temperature of feedwater for the boiler system to about 85à‚°C. Third comes installation of a dedicated biogas boiler and fourth is the replacement of the Shengdong units with two 500 kW Cummins biogas engines and a biogas scrubber system to reduce the residual H2S levels to less than 100 ppm.

The Cummins engines are 600 kW natural gas units that are derated to 500 kW for biogas operation. Their internals are sulphur-resistant and their operation is tailored to a gas with variable calorific value, such as biogas. Their capital cost is about AUS$1500 per kW installed, which includes most of the cogeneration equipment.

On 12 December 2012, the company won a grant of A$6.2 million from the Clean Technology Food and Foundries Investment programme for the new CAL and dedicated biogas boiler projects, as part of the national Carbon Tax Scheme. They will reduce the intensity of the carbon emissions of the steam production by 64 per cent and cut energy costs by 46 per cent.

A feature of rendering plants is the very high strength of their effluent. Almost 1 million litres of wastewater is generated per day with a biological oxygen demand (BOD) of 40,000 mg/litre or a chemical oxygen demand (COD) of around 100,000 mg/litre. The effluent has always been treated by the use of on-site ponds.

Anaerobic digestion removes 85-90 per cent of the organic load but such ponds can be problematic because of the intense odours they produce. Such odours released at ground level do not dissipate well. The A.J. Bush plant is in a rural area but there is some residential housing nearby. A major benefit for the site was that the CAL reduces odours from the pond system, which is consistent with the plant being one of Australia’s most environmental friendly rendering facilities.

A.J. Bush is recognised as one of the most sustainable rendering facilities in Australia<br>Credit: T. Colley
A.J. Bush is recognised as one of the most sustainable rendering facilities in Australia
Credit: T. Colley

If the site were to increase the percentage of BOD that was degraded anaerobically, there would be additional biogas available. The BOD of the influent is 40,000 mg/litre whereas for the effluent the figure is 4000 mg/litre, a fall of 90%. A reduction to only 400 mg/litre, which would be a cut of 99 per cent would make even more biogas available.

In terms of an energy balance, the gensets use about 12 GJ of biogas per hour. The wastewater produces about 1150 GJ per day, or about four times the amount of biogas that the biogas gensets use or twice the site’s total electrical demand. This would mean approximately 2 MW of green electricity was available for export if all the biogas generated were used for electricity generation. However, this is unlikely to be economical given current regulatory and economic conditions. The far preferable option for the site is to use the surplus biogas in its boilers, displacing coal and its carbon liability.

Realising the full potential

In 2011, there were 81 rendering plants in Australia. These processed 2.5 million tonnes of raw material to produce 1.1 million tonnes of rendered product. The Beaudesert plant renders 0.2 million tonnes per year of raw material based on a 52-week operating year. This has the potential to create 2 MW of power for export.

If replicated across the industry in Australia, this would equate to 25 MW of export capacity, reducing the load on the national electricity supply system’s and providing power from sources distributed across the grid rather than being at one central location. Given that most plants operate 24 hours a day on weekdays, which coincides with the electricity supply system summer afternoon peaks, they could assist with reducing the system peak load.

However, developments at other plants have taken the simpler approach of using CAL biogas in their boilers. The lack of support for embedded generation and cogeneration means that this is the simpler and more cost effective option for most sites. As such, this represents a lost opportunity for replacing electricity generated from coal-fired power stations with renewable electricity.

Given the inherent inefficiencies with coal-fired generation, transmission and distribution, with overall delivered efficiency of about 30% in many cases, this effectively means that this sustainable bioenergy resource is not being used in a way that would maximise greenhouse gas reductions in Australia. By comparison, modern biogas gensets have an electrical efficiency of over 40 per cent and a total energy efficiency of over 80 per cent, meaning that biogas-embedded generation can contribute to cutting emissions. Unless government policy recognises this and supports biogas generation and cogeneration, this inefficiency is liked to be locked in for the effective life of the biogas boilers, which is of the order of 20 years.

Perhaps the Australian government needs to take a leaf out of A.J. Bush’s book. As the company’s Beaudesert plant manager David Kassulke says, ‘To be efficient we must utilise every part of the animal, excluding only the moo, the cluck and the oink.

Tracey Colley is an Australian-based freelance journalist, who writes on energy.

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