Top Irish dairy co-op using CHP to drive expansion

The abolition of European Union milk quotas could see expansion of dairy cooperatives, and by extension combined heat and power throughout the bloc.

Decentralized Energy spoke to Ireland‘s leading developer of combined heat and power, Fingleton White, about one such dairy expansion as well as policy developments that could see CHP further proliferate in the country.

The engineering consulting company has just completed an expansion of their CHP plant at Lakeland Dairies, one of Ireland’s biggest milk producers, in Bailieboro in Cavan, and the development of the premises is directly linked with the abolition of the quota last year.

“There will now be two units on the site, when the second plant is unveiled later this year,” Ronan Nevin, Plant Manager at Fingleton White told Decentralized Energy. “We built an initial facility in 2009, and this will also house a 5 MW Centrax KB7 gas turbine generating set along with one 28 t/h supplementary fired waste heat boiler operating at 17.2 bar, bringing total capacity to 10 MWe.”

“We provided the design and build on what is a facility running off natural gas.”

Lakeland is a large volume provider of ultra-high temperature processed milk, which is particularly important to the catering industry in northern Europe. While the plants Fingleton White currently run use natural gas, it is hoped that new legislation will facilitate more biogas-type solutions in the coming years.

Future developments could allow biomethane to be generated at various Anaerobic Digesters plants located around the country. This gas would be injected into the natural gas network once it meets all the quality requirements. The CHP plants could then buy their gas or part of their gas from “green” gas suppliers. The “green” biomethane gas quantities would be certified to ensure that the quantity that is being sold to the CHP is matched to what is being generated by the ADs. The CHP plants would still be burning natural gas but they would be paying for biomehane. The plant would not need to be modified or the operation impacted. This is similar to the system used for “green” electricity.

Nevin believes the introduction of a Renewable Heat Incentive will persuade further development in the Irish CHP sector, and also improve Ireland’s performance in meeting its CO2 reduction targets.

“That RHI relief incentive is hopefully on the way in Ireland “with a possibility of it being in place early 2017. It would stimulate the anaerobic digestion biogas business here like it has done in the UK.à‚ We designed and developed this 15 MW electrical site CHP plant at Diageo in Dublin in 1997. We now own and operate as part of a joint venture with Veolia called Veolia Alternative Energy (VAE). Diageo has its own corporate CO2 targets and biogas will be a big help in meeting those targets.”

“Regarding the heat part of the EU’s renewable targets ” (Ireland is) not going to hit them so the government are going to have to step up and incentivise a lot more. Hopefully that is where the RHI would come into play.”

“There is a possibility it may only be aimed at the non-emissions trading system (ETS) companies which wouldn’t be ideal as they need the bigger companies to get the industries going, those being the early adapters who would actually pay the extra for biogas and stimulate the industry.”

“Because the government targets are outside of the EUTS companies there isn’t really any reason for them to encourage it but it but to develop the industry and meet the target overall it makes sense.”

Nevin says the RHI is going to make regular onsite embedded generation CHP a lot more appealing to companies who have CO2 restrictions. Biomass doesn’t suit every site.

“Electrification of everything else is fine but for process heating while biomass works well for some sites, for others conditions won’t allow it ” so conventional gas turbines using biogas would be a good method.”

Fingleton’s expertise in the sector is mainly confined to Ireland with some projects in tandem with Veolia (formerly Dalkia) in the UK. Since completing their first project in 1993, they’ve grown their presence in the dairy, brewery and pharmaceuticals industries.
Fingleton White
Their biggest project to date is at Guinness owners Diageo, at St James Gate in Dublin, which they own and operate as part of VAE. That plant runs off gas and provides 15 MW of electric power. Another project the company is designing balance of plant for is the 48 MW Mayo Renewable Power biomass CHP facility.

Nevin believes a more progressive policy towards enabling CHP needs to be developed, if Ireland is to meet its CO2 reduction goals. A particular bugbear, which Fingleton White and others bring up annually with the Irishà‚ Commission for Energy Regulation (CER) (Ireland’s energy regulator) is the Public Service Obligation (PSO).

The issue at hand is with the levy calculation methodology and not the PSO itself.

“This levy for larger sites is charged on the maximum import capacity (MIC) rather than kilowatt hours. For example the Guinness site has embedded generation but it also has a backup grid connection which is used continuously for export but rarely used for import ” at the moment the PSO levy is charged on the capacity of that connection so sites that have embedded generation are being overly penalised.”

A similar, and equally counterproductive levy exists in other member states in the EU, where some companies within the industrial complex have even taken to concealing their CHP facilities.

“One of the objectives of the PSO is to increase security of supply and having embedded generation does that but the companies that do that are being penalised by having the PSO levy charged higher on them than other sites.”

“We are engaged in a consultation process with the CER on the PSO charges. They are increasing every year, and went up 37 per cent this year.”

For now the abolition of the milk quota will see other big dairy operations considering CHP as a means of facilitating increased production.

As a result of the CHP driven expansion of Lakeland’s facility that dairy is set to increase production of milk powder from 80,000 tonnes to 130,000 tonnes a year. The co-operative also produces 24,000 tonnes of butter on the same site.

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