A wind turbine manufacturer is advising that heat-only anaerobic digestion (AD) technology may present a more viable opportunity for some landowners and rural industries than designs incorporating combined heat and power (CHP) systems to produce electricity.
Amid the revision of Renewable Heat Incentive tariffs, would-be independent power producers will need to reconsider their options as the market has seen heat-based tariffs rise and feed-in tariffs for farm-scale electricity generation become increasingly limited.
In this scenario, Norvento forecasts that ‘heat-only’ AD plants will now start to find their niche in the farm-scale biogas sector. As new medium-scale wind energy users in the UK are shifting their focus away from exporting power for profit and towards on-site consumption, biogas users will find that using energy on-site provides the strongest business case for installing a renewable energy system.
In numerous cases, heat, rather than electricity, is central to supporting intensive on-site production processes. Dairy and pig farmers stand out as ideal users of heat-only AD plants; not only do they generate substantial ‘digestate’, or fuel, but they also rely on heat-intensive processes such as the manufacture of dairy products or the refrigeration needed to operate an abattoir.
Ivo Arnús, Director of UK Business Development at Norvento, explained: “In the short term, the emphasis for these potential users must be on analysing how energy produced by an on-site system can be best used on site to guarantee a swift return on investment.
“The energy specialist estimates that a 600kW thermal (heat-only) plant that costs around £600,000 to install can have an annual gross income of ~£200,000 and a payback period as short as 3.5 years – providing all heat is used on site.
“This compares to the installation of a CHP engine at the same plant, where, with 50% of the power produced consumed on site and 50% exported to the grid, capital costs would increase by £250,000 and the payback time would increase to nearly five years. The overall economics of a heat-only scheme are simply better.
Currently, heat needs to be consumed on-site as there is no means of ‘exporting’ excess heat to a district heating grid, unlike the electricity produced by a wind turbine or CHP plant.
He added: “Heat-only AD systems, optimised to match energy demand, are already proving their worth for rural industries throughout Europe. By way of an example, we have installed a BioPlant AD system at a cheese factory in Spain, where there is no financial incentive scheme in place – but returns are highly attractive.”