Organics Management Company Invests in Digesters

April 2011 Issue
Writer: Diane Greer

Publication:BioCycle Magazine

Ohio Firm Designs and Duilds Anaerobic Digestion Systems for Municipal, Agricultural and Industrial Residuals.

CLEVELAND, Ohio-based quasar energy group (quasar) is moving at a rapid pace to create anaerobic digester infrastructure. “In Ohio we are working on 16 projects and we hope that at least 12 will break ground this year,” says Mel Kurtz, quasar president. Other projects are under development in Massachusetts, New York, Missouri, Florida and Hawaii. The company, which designs, constructs and manages anaerobic digesters, has facilities in Columbus, Zanesville and Wooster, Ohio. Commissioning is underway at a fifth facility in Rutland, Massachusetts.

quasar, formerly Schmack BioEnergy, was formed in 2006, originally as a partnership with Schmack Biogas AG. The company completed its first system in Akron, Ohio using modified European technology to process 25,000 tons/year of biosolids from the City of Akron’s wastewater treatment plant (see “Processing Biosolids Via A High Solids Digester,” September 2008). Biogas produced by the system generates electricity and process heat, supplying 25 to 30 percent of the adjacent composting facility’s electric requirements. “When we first transferred the technology we found that the specifications in Europe did not meet many of the U.S. requirements, particularly for an industrial facility at a wastewater treatment plant,” Kurtz explains. Modifications were required to convert the system to U.S. standards with redundancy and remote monitoring that meet U.S. component and safety requirements.

When Schmack Biogas AG filed for insolvency in 2009, the quasar team was motivated to consider a broad spectrum of successful anaerobic digestion technology. Its engineering team evaluated 30 different systems to identify best in class components that could be manufactured to U.S. standards. The result was a Quasar engineered system and a new perspective on the opportunity to create a U.S. industry. “Our goal was to replicate the European anaerobic digestion success story in the U.S.,” says Kurtz. “We learned that not only did we have to build a company, we had to build a U.S.-based industry. Today, approximately 90 percent of the components are made in Ohio.”

quasar offers two types of complete mix digester systems: ecoFARM, designed for agricultural applications, and ecoCITY, targeting wastewater treatment plants and industrial food manufacturers. Basic systems are composed of three tanks. The first tank accommodates the acidification phase; the second is the complete mix digester with a gas storage vessel and the third is used for effluent storage. (New regulations in Ohio prevent land application year round.) Expansion is achieved with additional tanks.

Feedstock entering the system, such as manure or sewage sludge, is pumped to a transfer hopper where it is fed to a macerator to reduce particle size. The material is then blended with effluent from the digester and emulsified in the acidification tank. Material from the acidification tank is fed every 30 minutes into the digesters. The timed feeding prevents large slugs of fresh material from adversely affecting the biology in the digesters, Kurtz explains.

DIGESTER INSTALLATIONS
quasar completed its first ecoFARM system, in collaboration with The Ohio State University’s (OSU) Ohio Agricultural Research and Development Center (OARDC) and the Ohio BioProducts Innovation Center (OBIC), at the BioHio Research Park on OSU’s Wooster campus in late 2009. The 550,000-gallon system can process up to 19,000-wet tons of food waste, crop waste, grass and manure annually. Electricity generated at the facility is purchased by the University and currently offsets one half of OARDC’s annual demand.
An 825,000-gallon ecoFARM system in Zanesville, Ohio, started producing biogas in fall 2010. The system, sited at a former cement plant, is processing over 29,000 wet tons of organic wastes annually to produce 8,200 MWh of electricity.

quasar is partnering with five Massachusetts dairy farms, organized as AGreen Energy, and Portland, Maine-based New England Organics, a division of Casella Waste Systems, to build ecoFARM systems at each farm (see “Permitting Farm Codigestion,” September 2010). Commissioning is underway on the first 500,000-gallon digester at Jordan Dairy Farms in Rutland. Biogas produced by the system will drive a 300-kW engine connected to the grid.

The quasar system fit AGreen’s criteria for a reliable, above ground system that could accept a variety of feedstock and be monitored and controlled remotely, explains Bill Jorgenson, AGreen Energy managing partner. Because the farms are small, 250 to 350 cows each, the extra biogas produced by codigesting source separated organics (SSO) was critical to project economics. New England Organics will deliver the SSO supplied by seven food companies under multiyear contracts.

An ecoCITY system, built in collaboration with Kurtz Bros., Inc. and the Solid Waste Authority of Central Ohio (SWACO), was recently completed in Columbus. The 2.21-million gallon facility, configured with four tanks, processes 50,000 wet tons of biosolids from the City of Columbus along with regional food waste and FOG (fats, oil and grease). Biogas drives generators with the capacity to produce 8,760-MWh (1-MW) of electricity annually.

To maximize biogas production, all quasar facilities codigest food waste, FOG and/or other high strength organic wastes in conjunction with the manure or sewage sludge. Facilities only accept source separated organics. Stone traps and grinders are employed to prevent contaminates from entering the digester. Walmart and Quest Recycling are two of the companies delivering food residuals to the Wooster, Zanesville and Columbus facilities. Typically quasar handles trucking of feedstock to its facilities. “The logistics for the transportation is managed in-house,” Kurtz says. “We know what we are picking up and we decide where it is going.”

RESIDUALS MANAGEMENT
quasar's business model is not that of a typical anaerobic digester manufacturer and developer. “The majority of our revenue from all these digesters comes from tipping fees,” Kurtz explains. “Electricity rates in most areas are too low to contribute materially to the project economics. That makes us a residuals management company.”

Analyses of potential projects start with feedstock sources and availability. The key is to have the right feedstock recipe based on the tipping fees, energy generated and the income from effluent, explains Steve Smith, quasar's CFO. “We design the recipe based on the organics in the area that will yield the highest return.”

Typically 60 to 70 percent of project revenue comes from tipping fees with the remainder from energy production and sale of renewable energy attributes. Those attributes are generated in states with renewable portfolio standards requiring utilities to purchase a specific percentage of their power from renewable sources.

quasar builds its facilities without long-term feedstock contracts. “Generators and transporters won’t give long-term contracts until a facility is operating because they don’t want to give up existing disposal alternatives,” Smith explains. Meanwhile, quasar isn’t sure it makes sense to lock in long-term contracts. Disposal costs are going up, not down, notes Smith, and future opportunities may exist to take in materials with higher biomethane potential and/or higher revenue.

With the down economy, credit all but disappeared and attracting private investors or securing debt financing for projects was no longer viable. “Right now it is still difficult, if not impossible, to borrow money,” Kurtz says. To keep its digester projects flowing, quasar provides equity funding. “We have some 46 projects in the pipeline right now and in every case, except for a couple out of the country, we will have an equity position,” he adds.

Project economics are aided by government grants and incentives, such as the Section 1603 grants for up to 30 percent of eligible project investment and a bonus depreciation provision that allows recovery of investment costs through accelerated depreciation (see “Funding Anaerobic Digestion Facilities,” March 2011). Many quasar projects also receive grants and/or loans through state programs or the USDA Rural Energy for America Program.

BIOGAS UTILIZATION
Most grant and incentive programs applicable to digesters require projects to produce electricity. Kurtz believes converting biogas to pipeline quality gas and/or compressed natural gas (CNG) for vehicle fuel is more economic, especially for rural communities without natural gas that rely on propane.

quasar operates its own biogas cleaning and upgrade division with technology it acquired in 2009 that targets cleaning and upgrading smaller volumes of biogas (up to 2,000-cfm). The technology employs membranes made by Air Products to produce gas with 99.9 percent methane content, Kurtz says. Instead of producing electricity, Kurtz would prefer to clean and upgrade the gas. “Generators are 22 percent (plus or minus) the cost of one of our facilities,” Kurtz says. “We have the ability, and we have a product right now, that can produce pipeline quality gas and motor vehicle fuel.”

The company plans to install the upgrading equipment and fueling stations at its existing facilities to make CNG available for fleets and the public. “Upgrading to CNG is a game changer,” Kurtz says. quasar can produce the equivalent of 20,000-gallons a day of vehicle fuel if all the biogas produced at its Ohio facilities was converted to CNG. Kurtz acknowledges that using CNG as vehicle fuel requires converting or purchasing new CNG vehicles. “We will start with our own equipment,” Kurtz says. “Our affiliated companies use 5-million gallons of diesel a year.”

RESEARCH FOCUS
An important component of quasar's business is its research laboratories, located at and operated in collaboration with OARDC. Current research is focused on feedstocks due to the fact that the company’s digesters process large amounts of organic materials from multiple suppliers. “The biggest concern is what feedstocks are going into the system,” explains Mark Suchan, head of quasar's laboratory. “Our facilities are more waste facilities than manure facilities. It is a very different type model and with that comes a lot more oversight.”

Feedstock contaminates, such as cleaning solutions, can seriously upset the biology of a digester or end up in the effluent. “We have to make sure that our facilities stay operational and that we maximize the performance,” he adds.

A first step in evaluating potential feedstock for codigestion involves an audit of the generator’s facility to determine how they manage their process, Suchan explains. The audit includes a review of manufacturer safety datasheets (MSD) for any chemicals used in the process, such as cleaners, that may end up in the feedstock.

Increasing biogas production and the range of digestible materials is the goal of a research partnership between Quasar and Yebo Li, a biosystems engineer in OARDC’s Department of Food, Agricultural and Biological Engineering. Li is working on a patent-pending process, to be marketed by quasar as the Integrated Anaerobic Digestion System (iADs), that combines a liquid digester with a solids digester. Ohio’s Third Frontier Advanced Energy Program awarded $2 million to fund iADs research and help build a demonstration system at the Zanesville digester facility to commercialize the technology.

An iADs combines a liquid digester, processing manure, food processing waste and/or sewage sludge, with solid-state anaerobic digestion technology that can process lignocellulosic materials, such as corn stover, yard trimmings and woody biomass. The system has been successfully tested with 20 to 40 percent solids content, according to quasar. Effluent from the liquid digester, which contains the biology (microbes) and nutrients required to digest the lignocellulosic biomass, is mixed with ground lignocellulosic materials before feeding it to the solids digester. Retention time in the solids digester is 22 to 30 days.

Li is testing a number of feedstocks. “Corn stover works best,” he explains. Additional nutrients need to be added for other materials, such as woody biomass. Construction of the iADs at Zanesville will start this summer. “By next summer we should have finished the demonstration and be ready for commercialization,” Li says.

Kurtz is excited by the prospects for the biogas industry. “Based on a study supported by OSU, we have calculated that there are enough organic residuals in Ohio alone to justify 6,443 digesters,” he says. “This market is so big there will be no saturation in our lifetime.”

Sidebar p. 44 Partnering to Promote AD Development

CLEVELAND-based Forest City Enterprises, a diversified real estate company, and quasar energy group (quasar) are partnering to develop an anaerobic digestion (AD) system on a 60-acre site once housing a General Motors Fisher Body Plant in Collinwood, Ohio, shuttered since the early 1980s. The facility will utilize quasar's 908,000-gallon ecoCity system to process 117 wet tons/day of mixed biomass and has the potential to generate 8,760 MWh of electricity and 34,515 MMBtu of thermal heat annually, according to quasar. The electricity will be sold to Cleveland Public Power. “The community has been interested in redeveloping the site for a long time,” says Rick Gerling, a Forest City project manager.

Forest City believes the AD facility will attract businesses to the site. “We see this as a first step in creating an energy park around renewables,” Gerling explains. This means attracting renewable energy companies or industries that fit within the value chain of anaerobic digestion, such as food processors or breweries, with waste that could be used as feedstock for the digesters.

The Collinwood project will serve as a case study for the larger deployment of bioenergy projects within the Forest City portfolio. “We see this as a repeatable business model in different locations where we have sites like this,” he adds. Digesters could also provide energy to some of the larger buildings within the portfolio, such as shopping malls. In December, the project received a $1 million grant commitment from the Ohio Department of Development, funded through the American Recovery and Reinvestment Act’s State Energy Program. quasar is taking an equity stake in the project, which it will build and operate. Construction is anticipated to start this spring.


 

 

   
     
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