Biogas From Anaerobic Digestion

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Technology update

Biogas from anaerobic digestionCO2 savings and economics

IntroductionBiogas from anaerobic digestion (AD) has a range of potential energy uses across heat, transport and electricity. This technology update describes these different options and compares the carbon savings potential for each. It also discusses the impact incentives might have on the economics of biogas production.

Key points The Carbon Trust has developed a model that allows comparison of the carbon savings and economics of different energy uses of biogas from AD. It is important to consider parasitic energy loads when comparing carbon benefits of different end uses, as these, along with fugitive methane emissions, can have an unexpectedly high impact on the carbon savings. Based on the assumptions used in the model, biomethane as a transport fuel has higher carbon savings potential compared to use for heat and electricity. Biomethane to the gas grid used for renewable heat has lower carbon saving impact than using the biogas for electricity generation, but it will have an advantage over electricity generation in the future when the electricity grid has been decarbonised, and injection to the gas grid provides flexibility to use the biomethane as a transport fuel elsewhere. Incentives such as feed in tariffs and the renewable heat incentive have a major effect on the economics of biogas production and the cost effectiveness between different energy end uses can vary.

Biogas from anaerobic digestion

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Figure 1

Resource Food waste

Use CHP/ electricity

Manure Anaerobic Digestion Agricultural waste H2S etc. removal

Biogas CH4/CO2

On-site heat

CO2 removal

Biogas-togridBiomethane CH4

Sewage sludge

Transport fuel

DefinitionsAnaerobic digestion (AD) is a process in which bacteria break down organic material in the absence of oxygen. Anaerobic digestion of sewage sludge is in widespread use in the water industry in the UK. There are also around 20 AD plants operating on food waste (from domestic and industrial sources) and farm waste (slurry, agricultural residues, crops) with more in development. Biogas, the gas produced directly from anaerobic digestion, contains a mixture of methane and CO2 with some other impurities. This can be burnt directly in a CHP engine or specialised boiler. Biomethane is purified biogas which has had the CO2 removed and is >97% methane. This can be injected into the gas grid (after odorisation and adjustment of calorific value by adding propane) or compressed and used as a transport fuel.

Different uses of biogas and biomethaneThere are four alternative options for the use of biogas produced by anaerobic digestion, shown diagrammatically in Figure 1. Following minimal cleaning (to remove hydrogen sulphide and other impurities that could damage equipment): The biogas can be burnt in an engine to produce electricity and heat. The biogas can be burnt in a boiler to provide on-site heating or steam/ hot water for a local heating scheme. Or CO2 and other impurities are removed to leave a pure biomethane: The biomethane can be injected into the natural gas grid. The biomethane can be compressed or liquefied and used as a transport fuel. Compressed biomethane is the same as compressed natural gas and can be used in internal combustion engines with suitable adjustments. Currently most AD plants producing energy in the UK combust the gas to generate electricity (frequently the only available use for the heat produced is within the AD plant and only electricity is exported). Trials are planned for the first injection of biomethane into the gas grid (DECC published guidance on this in December 2009) and biomethane has been used on a small scale as a transport fuel.

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Figure 2 Model inputs and outputs

Feedstock Type (manure, sewage, food waste, energy crops) Flowrate

Financial assumptions Energy prices Incentives Gate fees

Biogas modelling tool Selects AD plant type Calculates biogas yield

Outputs: Carbon savings Economic potential (returns, NPV etc)

Technical data Carbon conversion factors Efficiencies

Tool developed with assistance from Organic with assistance from ORA (Organic Resource Agency Ltd) Tool developed Resource Agency Ltd (ORA)

Carbon Trust modelThe Carbon Trust commissioned work to compare different uses of biogas for electricity generation, heat and as a transport fuel. Anaerobic digestion experts ORA built a spreadsheet model which allows the carbon savings and economics of different waste streams and different uses of the biogas to be compared and this has subsequently been developed further by the Carbon Trust.

Gas clean-up technologiesA number of different clean-up technologies are available to convert biogas to biomethane by removing CO2 and other impurities. Commonly used processes include water washing, chemical scrubbing and pressure swing absorption. The costs and energy use for gas clean up in the Carbon Trust model were based on chemical scrubbing technology. A review of suppliers prices suggested that these costs are representative of other gas cleaning processes, but which technology is most cost effective is likely to depend on the biogas flow rates.

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Chart 1 Electricity production parasitic loads3,500 3,133 3,000 2,500 2,000471

Chart 2 Biomethane production parasitic loads3,500 3,000 2,500 3,059

471 489 33553 1,567 144

100

537

2,025

2,000

t CO2e pa

t CO2e pa

1,500 1,000 500 0CO2 displaced AD plant elec Gas Methane Net clean up lost saving

1,500 1,000 500 0

CO2 displaced

AD plant elec

AD plant heat

Gas Methane Added Net clean up lost propane saving

Carbon savings from different optionsThe model sizes an AD plant for a selected waste stream and calculates the CO2 savings for different end uses of the biogas produced by the plant, based on the following assumptions: A CHP plant replacing grid electricity (the kg CO2/kWh of the electricity produced can be varied in the model) and producing heat used locally, which is assumed to replace natural gas heating. The electricity only case is where the CHP heat usage is set to 0% and the only use for the heat produced is in heating the AD plant. The baseline assumption was that electricity was generated at an efficiency of 35%. Biomethane to gas grid (replacing natural gas with a factor of 0.185 kg CO2/kWh). Transport fuel displacing diesel, assuming vehicle engine efficiency is unchanged i.e. the km per MJ of fuel are the same for diesel and compressed biomethane. (In practice the actual efficiency will vary depending on engine type.) In the discussion that follows figures are presented based on an AD plant processing 25,000 tonnes pa of commercial food waste. This is a typical scale for plants proposed for industrial and commercial food waste in the UK and is processing an amount equivalent to the food waste from around 70,000 households.

Parasitic energy useThe model includes consideration of parasitic power; the heat to run the AD plant and electricity to run the gas clean up process are subtracted from the energy produced. The CO2 equivalent of fugitive methane emissions for each process are also included and these vary for different energy production routes. Charts 1 and 2 above show the breakdown in CO2e for two cases electricity generation and biomethane to grid. For electricity production the effect of the parasitic load and fugitive methane is to reduce the carbon benefit by about a third, for biomethane production the reduction is nearly half.

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Chart 3 2010 net CO2 savings for 25,000tpa food waste3,000 2,500 2,000

Chart 4 2020 net CO2 savings for 25,000tpa food waste3,000 2,500 2,000

t CO2e pa

1,500 1,000 500 0 -500 -1,000 -1,500 -2,000

t CO2e pa

1,500 1,000 500 0 -500 -1,000 -1,500 -2,000

Transport fuel

CHP 50% heat use

Electricity only

Biomethane to gas grid net CO2

Transport fuel

CHP 50% heat use

Electricity only Biomethane to gas grid

parasitic CO2

parasitic CO2

net CO2

2010 carbon savingsChart 3 shows a comparison of net CO2 savings (after parasitic power and fugitive methane has been taken into account) assuming electricity is displaced at the current grid electricity generation mix of 0.54kg CO2/kWh. The hierarchy of savings, based on the assumptions listed above, is: Biomethane as a transport fuel, or a CHP plant with heat utilisation of 50% or more, saves most carbon. Electricity only generation is the next best option. Biomethane to grid savings are the lowest, as it displaces gas (a comparatively low carbon fossil fuel) and has a relatively high parasitic load. The carbon savings for electricity generation are very sensitive to the value assumed for the electrical efficiency of the generator. If this is increased to 40% from the baseline assumption of 35%, electricity generation saves the same amount of carbon as biomethane transport fuel. Another important assumption is the engine efficiency for the vehicle using compressed biomethane. If, instead of taking the same efficiency for diesel and methane, a 10% drop in efficiency is assumed, the transport fuel net CO2 savings in 2010 are slightly higher than the electricity only option.

2020 carbon savingsIn future it is expected that the carbon intensity of the electricity grid will reduce, so the impact of generating electricity will be less. Using the Committee on Climate Changes target of 0.31 kg CO2/kWh for 2020, and assuming at this date the transport fuel displaced will be 90% diesel and 10% zero carbon biofuel: The highest carbon saving is for biomethane as a transport fuel. Biomethane to the grid saves more carbon than both electricity only generation and CHP with high heat utilisation.

Benefits of biomethaneThe carbon savings from using biomethane as a transport fuel compare well with other energy uses both now and in the future with a lower carbon intensity electricity grid. It should be noted that the biomethane to grid option is compatible with using that biomethane as a transport fuel delivered by the grid at a different location. Installing equipment to convert biogas to biomethane also allows flexibility between injecting to grid and using as a transport fuel at the same site.

Biogas from anaerobic digestion

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Chart 5 GHG savings from biogas from accessible UK waste resource, assuming end use is biomethane to grid

3.0 2.5

2.52 0.20

Sewage/waste water Manure and farm waste Food waste

Mt CO2e pa

2.0

1.111.5 1.0 0.5 0.0

1.23 0.20 0.58 0.45 Direct CO2 Including avoided methane 1.21

Avoided methaneThe discussion so far has concentrated on direct CO2 savings benefits, but additional GHG savings are available from anaerobic digestion because of reductions in methane emissions. These avoided emissions differ between waste streams. When food waste is diverted from landfill, the avoided methane benefit is significant. Avoided landfill emissions do not apply to sewage sludge and manure/slurry, but alternative uses of these (e.g. spreading to land) will lead to direct methane emissions.

Carbon prizeChart 5 above shows estimated carbon savings for biogas from AD based on accessible waste resource. The total potential carbon savings from injecting biomethane from anaerobic digestion into the gas grid, making realistic assumptions about the amount of waste which is accessible for AD, is of the order of 1.2 Mt CO2 pa, equivalent to 6.5 TWh of renewable heat. If the same amount of biomethane is used as a transport fuel the carbon prize is 1.9 Mt CO2 pa. The second bar on the chart includes estimates of the benefits of avoided methane emissions (converted to CO2 equivalent). The calculation is very sensitive to assumptions about how much of the waste stream could be made available for AD, for example about how much source segregated food waste can be collected in practice. The assumptions used for the chart are listed in the appendix. The analysis did not include full lifecycle emissions or consideration of other possible destinations for the waste such as composting.

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Chart 6 Revenues and costs for 25,000 tpa food waste plant 40 gate fee, FIT 9p/kWh, RTFC 30 p/lgas clean up cost AD cost energy sales energy incentive AD other products Gate fee revenue

Net revenue 679k

Net revenue 710k

Net revenue 726k

electricity electricity electricty cost revenue

gas to grid revenue

gas to grid cost

transport revenue

transport cost

Costs include opex and capex on a simple payback basis

EconomicsThe model developed for the Carbon Trust allowed the costs of different end uses to be compared and the effect of various financial assumptions to be investigated. It is not intended to be an accurate costing tool as actual AD plant costs will be site specific, but does allow comparison of main items of plant across different waste streams and different plant scales. Chart 6 shows the proportional breakdown of costs and revenues for a 25,000tpa food plant, with an assumed gate fee of 40/tonne. The model shows clearly that when a gate fee is payable for the waste being processed in the AD plant, this has a significant impact on the profitability of the AD plant. It also illustrates the significance of the energy incentives in overall energy revenue (these parameters can be varied within the model). The overall returns for a plant developer for a plant developer are similar for the three different options as can be seen from the internal rates of return (IRR) calculated from the model, shown in Chart 7 It should . be noted that, in practice, site specific costs e.g. for grid connection will impact on the relative costs of the different options.

Chart 7 IRR for 25,000 tpa food waste plant 40 gate fee, FIT 9p/kWh, RTFC 30 p/l

12.6%

13.2%

12.8%

8.4% 6.2% 4.7%

electricity transport (FIT 9p/kWh) (RTFC 30p/l)

biomethane to grid (RHI 4p/kWh)

no subsidy

with incentive

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Chart 8 Effect of different incentives cost per tonne of CO2 saved

ConclusionsBiogas from anaerobic digestion offers worthwhile carbon savings if used for either transport, heat or electricity. Site specific factors such as ease of grid connection and availability of customers for heat and transport fuel will in practice have an important influence on the most appropriate use for the biogas. Based on the assumptions used in the modelling, using biomethane as a transport fuel enables the highest carbon savings, suggesting that this option should be encouraged. Changes in carbon intensity of the electricity grid over time mean that the benefit of electricity generated from biogas is likely to reduce in the future compared to heat and transport use. When setting the balance of incentives for renewable heat, electricity and transport fuel, the different carbon savings available for each option should be considered. The parasitic power required to run the AD plant and clean up the biogas has a significant impact on overall carbon savings.

355 211

RHI biomethane 4p/kWh RTFC 30p/l184

FIT 9p/kWh

Biomethane Electricity to gas grid only

Transport fuel

Relating incentives to carbon savingsUsing the output from the model the impact of various incentives was compared by dividing the revenue from the incentive by the net tonnes CO2 saved to compare the cost effectiveness of carbon savings delivered by the different incentives across the different energy uses for biogas. Chart 8 above shows a comparison between an RHI of 4p/kWh for biomethane to grid (as proposed in the DECC consultation), the current electricity incentive (FIT of 9p/kWh or double ROC at 90/MWh) and the approximate value of the 2009/10 transport fuel incentive (30p/l including 20p/l duty exemption).

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AppendixAssumptions to calculate carbon savings potential.Feedstock Total waste arisings % Total used for ADe Waste processed in AD plants CO2 multiplier assuming biomethane to gridf CO2 saving CH4 avoided GHG saving including CH4a

Unit Mtpa % Mtpa kgCO2 /t waste in Mtpa Mtpa CO2e Mtpa CO2e

Sewage 15b 90% 13.5 15 0.20 0g 0.20

Manure/slurry/ ag. residuea 32c 50% 16 36 0.58 1.07h 1.65

Food waste 18d 40% 7 .2 63 0.45 0.76i 1.96

Total

1.23

3.06

Plants operating on slurry have higher yields when a proportion of agricultural residue (e.g. brassica stalks, straw) is added. A plant with a mix of manure and slurry representing the overall mix of these available, with an additional 6.7% agricultural waste was modelled to estimate average yield for an on farm plant. There is a large amount of agricultural waste arisings not accounted for in this calculation, but since these arisings are typically fairly dry, they are not suitable for AD except when mixed with a wet feedstock such as slurry, and other conversion processes e.g. gasification may be more appropriate b From Ernst and Young work for National Grid (2009) The Potential for Renewable Gas in the UK c E4tech (2009) Biomass supply curves for the UK d WRAP (includes domestic, commercial and industrial food waste) e Carbon Trust estimates f Using net CO2 savings from Carbon Trust model g It is assumed that the sewage sludge is already treated by AD so there is no additional methane benefit h Derived from AEA (2005) Assessment of Methane Management and Recovery Options for Livestock Manures and Slurries i Assumes 75% of food waste would have gone to landfill with 75% methane capture

CTC773

The Carbon Trust is a not-for-profit company with the mission to accelerate the move to a low carbon economy. We provide specialist support to business and the public sector to help cut carbon emissions, save energy and commercialise low carbon technologies. By stimulating low carbon action we contribute to key UK goals of lower carbon emissions, the development of low carbon businesses, increased energy security and associated jobs. We help to cut carbon emissions now by: providing specialist advice and finance to help organisations cut carbon setting standards for carbon reduction. We reduce potential future carbon emissions by: opening markets for low carbon technologies leading industry collaborations to commercialise technologies investing in early-stage low carbon companies.

www.carbontrust.co.uk 0800 085 2005

ACT ON CO2 is the Governments initiative to help individuals understand and reduce their carbon footprint. Visit http://actonco2.direct.gov.uk for more information.

The Carbon Trust receives funding from Government including the Department of Energy and Climate Change, the Department for Transport, the Scottish Government, the Welsh Assembly Government and Invest Northern Ireland. Whilst reasonable steps have been taken to ensure that the information contained within this publication is correct, the authors, the Carbon Trust, its agents, contractors and sub-contractors give no warranty and make no representation as to its accuracy and accept no liability for any errors or omissions. Any trademarks, service marks or logos used in this publication, and copyright in it, are the property of the Carbon Trust. Nothing in this publication shall be construed as granting any licence or right to use or reproduce any of the trademarks, service marks, logos, copyright or any proprietary information in any way without the Carbon Trusts prior written permission. The Carbon Trust enforces infringements of its intellectual property rights to the full extent permitted by law. The Carbon Trust is a company limited by guarantee and registered in England and Wales under Company number 4190230 with its Registered Office at: 6th Floor, 5 New Street Square, London EC4A 3BF. Published in the UK: March 2010. The Carbon Trust 2010. All rights reserved.

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