Increasing the competitiveness of AD – thinkpiece from Dr Mike Mason
Dr Mike Mason, Chairman of Tropical Power, explores how AD can become more cost-competitive with other renewable technologies ahead of UK AD & World Biogas Expo 2018, the world’s largest tradeshow dedicated solely to AD and biogas.
In 2012, solar modules sold for about $1/Watt; in 2018 they are selling for $0.37/Watt ex factory in China, and Bloomberg New Energy Finance projects that this will drop further to $0.24/Watt in 2019. Recent solar power tenders in Mexico and Texas have come in at around $20/MWh, while at the same time wind has dropped from somewhere around $270/MWh to currently around $70/MWh, with these prices are set to fall further. The falling cost of batteries looks set to make 24/7 solar and wind economic in the very near future.
Against this background, anaerobic digestion (AD) looks like a serious laggard; it is currently expensive and subsidy-driven, and the costs of AD have barely moved over time. To be competitive in the modern world, AD has to make some substantial changes.
There are three ways AD can become more competitive: it can secure higher prices; it can find lower-cost feedstocks; and it can become cheaper to build. The first two of these can be achieved by AD becoming viable at farm scale. With animal and crop wastes to hand, perhaps supplemented by a little energy crop, average feedstock costs on farms are bound to be cheaper than bought-in crops. Small-scale AD can also secure higher prices for its output by using most of it on the farm where the value of heat and electricity are much higher than if sold to the grid.
To find its way onto the farm, AD has to become economic at small scale, perhaps 50-150 kW, and to do this, AD has to move from farm-specific project to mass-market product. It will never benefit from economies of scale in production if every AD plant is unique and involves designers, construction teams, financiers, grid negotiations and the like.
By making small-scale AD into a product that can fit into perhaps one or two shipping containers and a bag-type externally heated digester that would need little more than an excavator, an adjustable spanner and a screwdriver to install it, it becomes possible to design a plant just once but build many of them in a factory. By doing this using the techniques and buying power of other mass-manufacture approaches, it would be possible to bring the cost of a plant down to levels close to $3 per installed Watt or lower. This would make owning an AD plant the norm for farmers with livestock or crop waste.
Another of the advantages of small, containerised AD is the ability to fund it at lower cost than a fixed, purpose-designed plant. From the funder’s perspective, a small, containerised plant is a movable asset and can be repossessed and relocated if the project fails to pay. This makes it much lower-risk and therefore a much easier funding prospect than a conventional AD plant.
Ultimately, though, even $3/Watt isn’t cheap enough. This is the point where a new approach becomes necessary – using biomimicry of cows and other ruminants to find a way to make AD plants even smaller still without reducing power outputs. A cow can sustain an organic loading rate of around 180 kg volatile solids (VS)/m3/day, compared to 4-7 kg VS/m3/day for an AD plant. Hydrolysis at that rate would allow a 100 kW-equivalent AD plant, including the reactor, to fit into a 40 ft container. At that point AD plants could become as common as tractors!
For this to happen we need serious targeted investment in R&D from both industry and academia coupled with a clear vision of what AD could do for society that other energy and waste-processing technologies cannot deliver. We also need policy clarity – so that food and other ‘wastes’ have to be recycled or used as part of a fully integrated circular economy.
Dr Mike Mason will be speaking about making AD cost-competitive with other technologies at UK AD & World Biogas Expo 2018, the world’s largest tradeshow dedicated solely to AD and biogas. You can find out more about the show and register your free place at biogastradeshow.com.