Seizing Opportunities and Removing Obstacles

Seizing Opportunities and Removing Obstacles

Mid-Atlantic region has a small percentage of low/medium levels of P.
% of Soils with High/very high P levels: MD = 78% (and increasing based
on 2001-2005 data), DE = 82%, PA = 64%, VA = 66%
(Better Crops/Vol.86 (2002, No. 1), P.E. Fixen)
3

USDA 2002 Report
Lancaster region, PA
Eastern shore, MD/VA/DE
Shenandoah Valley, VA
Excess Manure P assuming no export of manure from county, 1997
Chesapeake Bay Watershed is one of the regions nationwide with the highest excess
manure P (greater than 2 million lbs/county).
4

Manure P supply: Cropland P demand
Confined Animal Production and Manure Nutrients.
N. Gollehon, M. Caswell, M. Ribaudo, R. Kellogg, C. Lander, and D. Letson.
Agriculture Information Bulletin No. (AIB771) 40 pp, June 2001. USDA-ERS.

Finding the
“Win - Win”
Technologies exist to
produce energy from
manure that provide
the farmer with
income and reduce air
and water pollution.
How can we get more
projects “on the
ground” in the Bay
watershed?
Agricultural
Sustainability

What changes are needed at the federal and
state level to encourage successful deployment
of manure-to-energy technologies at the
regional, community and farm scale?
• Market Entry Factors
• Financing for Maximizing Benefits
• Markets for Byproducts

3 ways to help
Getting more
projects on the
ground will
require multiple
solutions. Help us
to understand
what policies are
needed and the
order of priority.
• Clarify and add to
what the policy analysts
have presented
• Vote for your top 3
priorities for the next 1-
2 years.
• Complete the Survey

OPPORTUNITY- Use RPS to get higher price for manure to energy
Renewable Portfolio Standard
Md.- 20% by 2022; 2% solar
Pa.- 18% by 2021; .44% solar
Va.- 12% by 2024 (voluntary)
ISSUES
• Utilities buy renewable energy credits (REC’s) from 12
states and D.C. in PJM, our regional transmission
organization.
• Will not necessarily promote in-state production.
• REC market is flooded, can be banked for two years.

Extend RPS solar incentives to Manure to Energy
1. Adopt Technology Specific Set Asides for Manure to
Energy.
2. Increase Alternative Compliance Payments for Manure
to Energy.
3. Adopt Credit Multipliers for Manure to Energy.
4. VA adopt a mandatory RPS.
5. Couple with state tax and funding incentives for in state
production.

OPPORTUNITY
Offset power otherwise bought from grid.
ISSUE
• Need to aggregate meters to offset costs for all farm
structures.
• Contracts with Poultry Growers may include propane so
power produced would not be used to offset
heating/cooling costs.
RECOMMENDATION
1. Virginia allow aggregation of meters.
2. Industry remove unintentional barriers to grower power
generation.
I

OPPORTUNITY
Sell “green energy” to utilities and the grid

Small Projects: (Net metered); MD- 2MW
Residential, PA- 50kW; VA-20kW;
Commercial, PA- 3MW; VA- 500kW
Grants + Tax Credits + Avoided Costs + Tipping fees+ Sell excess
electric to utility= Payback period 3-5 years
Medium and Large Projects: (Utility or Wholesale)
MD > 2 MW; PA>5MW; VA> 500KW
Grants + Tax Credits + Possible Avoided Costs (contract with large
energy user like prison, industrial, park, processing plant) +Sell to
utility and on wholesale market.

ISSUE- Power Purchase Agreements
Medium and Large scale projects need long term power
purchase agreements and above market rates to attract
investment.

¢/kwh
Long-Term Power Purchase Agreements
Market Price
Contract Price
time

1. Investor owned utilities enter into long term power
purchase agreements for manure to energy. Surcharge
on utility bills to support PPA’s.
2. States purchase manure to energy power for state
needs.
A

• “Bay Power” certification for market based branding
• States certify that Bay Power:
• Is generated from manure to energy.
• Has added water quality components.
• Is generated in-state or in watershed, or
• Is generated in watershed manure hotspots
R,
L
• Create “premium” brand.
• Utilities and alternate electric suppliers market.
• Capitalize on movements to buy local, support
clean energy, Save the Bay.

The rate of actual productivity in a year
compared to the theoretical maximum
24hrs/day ; 7 days/week; 365 days/year

U.S. Capacity Factors by Fuel Type
2010
Fuel Type
Average Capacity Factors
(%)
Nuclear 91.2
Biomass 85.5
Geothermal 71.6
Coal (Steam Turbine) 65.4
Gas (Combined Cycle) 45.8
Hydro 29.4
Wind 29.1
Solar 17.7
Gas (Steam Turbine) 12.9
Oil Source: (Steam Ventyx Velocity Turbine) Suite / Energy Information Administration
8.9
Updated: 4/11

Funding Sources
• Different sources for different phases of
technology development and scale
• Federal – focus on Farm Bill programs
• State – emphasis on tweaks to
existing programs

OPPORTUNITY
State and federal grant and loan programs that can be
used for alternative energy projects.
ISSUE
Funds are not widely used for manure to energy projects
or, if they are, no explicit link to water quality benefits.
RECOMMENDATION
Give priority to manure to energy projects that address
water quality issues. Devote resources to technical
assistance and outreach.
A, L

Example
• USDA’s Rural Energy for America Program
(REAP) provides grants and loans for alternative
energy projects (e.g., anaerobic digesters).
• Funds from USDA’s Environmental Quality
Incentives Program (EQIP) could be used to fund
an “integrated approach” that also provides
water quality benefits (e.g., separation
technology).
• Alter the scoring system for REAP and EQIP to
give priority to integrated projects.

Alternative Energy Grants
and Loans FY11
$200,000,000
$180,000,000
$160,000,000
$140,000,000
$120,000,000
Alternative and Clean Energy Program
Sustainable Energy Funds
PA Energy Development Authority
$100,000,000
$80,000,000
$60,000,000
$40,000,000
$20,000,000
$0
Strategic Energy Investment Fund
MARBIDCO
Maryland Virginia Pennsylvania

OPPORTUNITY
Refundable or transferable alternative energy state
tax credit programs.
ISSUE
Status of these programs varies across the three
states.
RECOMMENDATION
Revise alternative energy tax credit programs to
provide greater incentives for manure to energy
projects.
L

Comparison of Alternative
Energy Tax Credit Programs
State Legislation Amount Transferable/
Refundable?
Status
Pennsylvania H.B. 1 - 2008 15% of cost of
project
Transferable
No
appropriated
funds
Maryland H.B. 494 - 2010 0.85 cents/kwh Refundable Active
Virginia S.B. 678 - 2011 1.1 cents/kwh Can be carried
over
Legislation
didn’t pass
North Carolina
35% of cost of
project
Can be carried
over
Active

OPPORTUNITY
Sale of nutrient credits as a revenue stream for manure to
energy projects.
ISSUES
1. Demand for nutrient credits is currently low.
2. Manure to energy projects don’t fit well into existing
credit certification approaches.
RECOMMENDATION
1. Stimulate market by establishing credit bank.
2. Establish regional technical review panel to assist in
calculating nutrient credit benefits.
A,L
A

OPPORTUNITY
Sale of separated solids as bedding
ISSUE
Tracking of nutrient fraction that remains in the solids
RECOMMENDATION
Potential revisions of nutrient management requirements
and tracking for importers.
A, R

OPPORTUNITY
Sale of separated solids as peat replacement
ISSUE
Economies of scale
Siting
RECOMMENDATION
Increase demand through promotion of LID, use on
public projects
L, R, I

OPPORTUNITY
Beneficial use of ash as fertilizer or feed product
ISSUE
RECOMMENDATION

Cordell et al., 2009

OPPORTUNITY
Beneficial use of ash as fertilizer or feed product
ISSUE
Air permitting
RECOMMENDATION
Clear classification of manure as a “fuel” instead of “solid
waste”
R

OPPORTUNITY
Use of ash as a fertilizer on food crops
ISSUE
Limited experience and documentation of effectiveness
RECOMMENDATION
1. Continued research
2. Include this practice in BMP risk management
programs.
I

OPPORTUNITY
Use of ash as a fertilizer product
ISSUE
For maximum benefit, nutrients should be moved from
surplus areas to deficient areas
RECOMMENDATION
Target projects in high-surplus areas
I

Confined Animal Production and Manure Nutrients.
N. Gollehon, M. Caswell, M. Ribaudo, R. Kellogg, C. Lander, and D. Letson.
Agriculture Information Bulletin No. (AIB771) 40 pp, June 2001. USDA-ERS.

3 ways to help
Getting more
projects on the
ground will
require multiple
solutions. Help us
to understand
what policies are
needed and the
order of priority.
• Clarify and add to
what the policy analysts
have presented
• Vote for your top 3
priorities for the next 1-
2 years.
• Complete the Survey

Policies: Market Entry Factors
• Incentivize manure to energy using RPS incentives similar to solar.
• Allow aggregation of meters .
• Encourage industry to remove unintentional barriers (ex. propane purchase
requirements)
• Establish programs to facilitate long-term power purchase contracts, with
initial rates above market price.
• Establish “Bay Power” certification for market-based branding program.

Policies: Financing
• Change ranking systems of funding programs to prioritize manure to energy
projects that address water quality issues. Devote resources to technical
assistance and outreach. (Farm Bill)
Alter state tax credit programs
• MD: Expand existing tax credit program to make heat generation eligible.
• VA: Est. transferable or refundable tax credits, make heat generation eligible.
• PA: Fund the existing alternative energy tax credit program.
• Stimulate nutrient trading markets by establishing credit banks to buy and sell
credits.
• Establish regional technical review panel to assist in calculating nutrient credit
benefits.

Policies: Markets for By-Products
• Evaluate adequacy of current nutrient management plans to fully account for
imported/exported nutrients in by-products.
• Increase demand for compost by promoting Low Impact Development (LID),
and use on public projects.
• Clear classification of manure as a “fuel” instead of “solid waste” for purposes
of air permitting.
• Facilitate use of organic fertilizer products on food crops through continued
research and inclusion of this practice in BMP risk management programs.
• Target manure-to-energy projects in high P-surplus areas.