(Photo via USDA)

Innovative farm energy projects clash with Wisconsin policy

The farming region of central Wisconsin presents a bucolic image, home to rolling fields, numerous dairies and a family-owned chicken processing plant that started in 1925 with two brothers delivering eggs and livestock.

These operations also produce a lot of waste, including countless tons of manure and the detritus from processing poultry.

Now New Chester Dairy and Brakebush Brothers are teaming up through a Milwaukee-based company to turn that unsightly waste into renewable heat and power.

Clean Energy North America is building a biodigester on New Chester’s land, which will extract methane from the dairy’s manure and from the waste of nearby food processors including Brakebush. The biogas will be sent via an underground pipeline to Brakebush’s plant about 16 miles away. There it will be burned to generate up to 7 MW of electricity, supplying more than 80 percent of Brakebush’s load. And the waste heat from the generation will be used for Brakebush’s hot water.

That means Brakebush — a national company that distributes chicken to schools, restaurants and the military – will drastically reduce its need for natural gas for heating and electricity from the grid that would likely come from coal-fired power plants. And the manure and other waste will be turned into an efficient fertilizer, reducing the problems posed by bacteria and run-off when manure is applied directly to fields.

This project, called New Chester Clean Energy, is an example of the creative renewable energy and combined heat and power operations that could help farms across the Midwest save on energy costs and reduce their environmental impact and carbon footprint.

But such projects depend on a favorable climate from local utilities and state regulators and legislators.

Wisconsin is not considered politically hospitable to distributed renewable energy projects like this, as outlined in a report last year by the Wisconsin Energy Institute. Clean Energy North America vice president Murray Sim, an expert who has worked at utilities in the Midwest and abroad, said the company will likely not do another such project in the state any time soon.

‘Fraught with uncertainty’

Energy at Brakebush will be generated “behind the meter,” without buying or having the energy delivered by a utility. But the equipment is owned largely by a third party – Clean Energy North America – though Brakebush holds a minority stake.

Such third-party ownership of renewable energy installations has been a regulatory sticking point nationwide as utilities fear such setups could cut into their customer base and their profits.

Third-party ownership is often necessary to make a distributed renewable energy project feasible: if the owner of the property can’t afford to construct and operate the system themselves, or if the property owner is a non-profit institution which can’t take advantage of tax breaks that are often crucial to financing renewable energy.

Third-party ownership has presented widespread legal and regulatory challenges with solar installations; a case in Iowa is before the state Supreme Court.

Whether electricity is being generated from solar panels or biogas, utilities and public service commissions can argue that a third party owner should be treated like a utility itself, regulated and subjected to costs and procedures that could make the setup untenable.

The New Chester project is proceeding without being treated as a utility, and it appears it will work out just fine, according to Sim. But several communications from the Wisconsin Public Service Commission make him think state officials – and Wisconsin utilities who have significant political power – might try to block future such projects.

Among the things that make Sim nervous are a February 2012 letter from the Public Service Commission to state representative Gary Tauchen in response to his inquiry about promoting third-party power purchase agreements for solar and biogas installations. The commission’s gas and energy division administrator Robert Norcross told Tauchen that unless the owner of the installation is just providing energy to themselves (“self-generation”), biogas and solar operators would qualify as utilities subject to regulation.

Norcross said an exemption to this standard could be created, but that would require a law being passed and it would have to be done carefully to avoid moving toward deregulation.

The commission’s legal counsel reiterated this opinion in an April 2014 letter to Madison Gas and Electric Company regarding interconnection requests the utility had gotten from third-party-owned distributed energy installations. Neither letter holds any official weight, but they suggest how the commission is likely to rule if a utility were to challenge a third-party-owned installation in their service territory.

The New Chester setup is safe in part because Brakebush does own a portion of the project, and because the plant is served by a local electrical cooperative, not a large for-profit utility. But investors are always leery of having to negotiate such setups, and regulatory resistance to third-party ownership makes it much harder to get financing.

“The local [electric] cooperative was actually okay with this arrangement because Brakebush is the largest employer in Marquette County, but it’s not clear they would have gotten the same kind of flashing yellow light” – as opposed to a red light — “from an investor-owned utility like We Energies,” said Michael Vickerman, program and policy director of RENEW Wisconsin.

“The way the situation is now, the individual utility acts as a gatekeeper for these types of installations,” Vickerman said. “The Public Service Commission has not taken a formal position, so it’s a situation fraught with uncertainty. And money people don’t like uncertainty.”

‘Closed for business’

While no state law or policy prohibits third-party-owned renewable energy projects like New Chester Clean Energy, advocates say a firm statement from the Public Service Commission or legislation clearly supporting such installations is crucial to sparking investment.

“The utilities are in the driver’s seat when it comes to electric policy, they have control over the state legislature,” said Vickerman. “If we want to clear up this question and also set boundaries around what kind of third party finance projects are allowed and which are not allowed, legislation would be required.”

Currently, “It’s terra infirma, we just don’t know what the lay of the land is going forward,” Vickerman said.

RENEW Wisconsin (a member of RE-AMP, which also publishes Midwest Energy News) is part of a coalition of more than 100 organizations calling for legislation that would exempt behind-the-meter third-party setups from regulation as utilities.

Proposed legislation — which drew national attention for drawing support from the state’s Libertarian Party — was drafted last session but never progressed. Vickerman said a bill will likely be introduced when the legislature reconvenes next year.

Proponents say situations like New Chester Clean Energy – or a school or church that hires a company to operate solar panels on their roof – should clearly not be treated like electric utilities. While Brakebush is a private company, non-profit institutions often need to enlist a for-profit company to operate their energy installations so they can take advantage of tax breaks.

“We’re talking about self-generation, using someone else’s equipment,” Vickerman said. “These are not disguised power producers that want to flood the grid with electricity and receive retail rates for it. This is basically power that is going to be consumed onsite.”

Sim said his company will consider projects similar to the New Chester one in Iowa and Minnesota in the future, but no more in Wisconsin unless there is a major political shift.

“Wisconsin’s really closed for business,” he said. “When it comes to behind-the-meter generation, the policy is really lined up with the utilities. Behind-the-meter generation is something where you need to have the utilities at least in neutral. If you fight the Governor, you just never win.”

A good match

Many farms across the Midwest have biodigesters onsite to turn their manure into gas, and then that gas can be turned into electricity with a generator. If a farm doesn’t need all the electricity it produces it can be sent back to the grid. But that may or may not be economical depending on the local policies for selling energy back to the grid. In Wisconsin, there’s little incentive to send energy back to the grid, noted Andy Olsen, A Madison-based policy advocate for the Environmental Law & Policy Center.

Electricity demand at a dairy is relatively low, making it unlikely that they would be motivated to produce electricity onsite. That’s where sending the biogas to an operation with greater energy needs – like Brakebush – is a novel solution.

“Dairy farms are not high electric load – it’s up and down, they don’t really have air conditioning or heating like a manufacturer,” said Sim. “At a chicken plant, you have day shifts, then disinfecting at night, you have the freezers. It’s a much larger, relatively steady electric load.”

When an operation like Brakebush can use almost all the electricity generated behind the meter, utilities can just stay out of the way by not opposing the installation. But more agricultural and livestock operations would likely generate electricity onsite if utilities actively supported the concept, Olsen noted. They could do that by offering more attractive buy-back rates for electricity, he said, and by more efficient interconnection policies.

“We need to hear more ‘can-do’ from Wisconsin utilities and less foot-dragging and obstructionism,” Olsen said.

If farms are generating electricity onsite, they are also likely to adopt even more efficient combined heat and power systems — using the waste heat themselves or sending it to nearby operations to warm buildings, dry grain or incubate eggs.

Sim noted that the dairy gets significant benefits from providing the land and the manure for the biodigester. Instead of having to deal with their manure, they offload it then get back a much more attractive fertilizer product. After the manure is sent through the biodigester, what remains has much less bacteria and phosphorus (which causes nutrient pollution in nearby waterways), and foul-smelling hydrogen sulfide gas has been removed.

“There’s a fraction of the odor you had before – not that really yucky manure smell,” Sim said. “You now have a solid fertilizer that looks a little bit like peat moss. Instead of spreading it evenly on the field, you can put it right where it’s needed.”

Olsen said the Brakebush project should be looked at as a model.

“There’s been talk in the state for a long time about building biogas pipeline systems,” he said. “Now Clean Energy North America has done just that, taken this idea that engineers and others were discussing and made it a reality. They should really be encouraged and praised for what they’re doing.”

Editor’s note: Biodigesters remove hydrogen sulfide, not hydrogen sulfate, as erroneously stated in an earlier version of this story.

4 thoughts on “Innovative farm energy projects clash with Wisconsin policy

  1. Why is this an issue? Even though Wisconsin utility laws are antiquated, this should not be a problem in this situation. Even if Brakebush was not a partner in this deal, there would be no need for them to be regulated as a utility. New Chester Clean Energy is selling the gas, not electricity, so all Brakebush has to do is purchase their own CHP unit and generate their own electricity.

  2. Nice story, though I have a few quibbles:
    pretty sure the foul-smelling gas is hydrogen sulfide (H2S) not “hydrogen sulfate”, and
    not sure why the phosphorus would disappear — pretty sure its not going be a component of the gas that gets piped away and burned

  3. How about we take that same “Build it Now! Build it Now! Build it Now!” insistence that the demagogues say for Keystone XL and transfer it to building these digesters for livestock waste and heat to energy co-generation facilities? Do we have permission to beat out chests as those demagogues do and boast about that this project will bring jobs, jobs, jobs?
    Anti-fracking activists look not further for a bandwagon to jump upon. This type of biogas is perhaps the alternative to toxic wastewater fracking that could be distributed through natural gas pipeline infrastructure. There are plenty of people in Wisconsin suffering from the frack sand mining operations.
    I am completely outraged by those in Wisconsin blamed for discouraging similar projects; those hypocrites who have a “cut taxes and slash regulations” attitude when it comes to big establishment industries but are happy to pile up the fees, regulations and red tape for small entrepreneurial start-ups.

  4. I am an American ex-pat Army vet with long term residence in Germany. Here, the energy market is totally de-monopolized, and power customers can chose their suppliers, who pay local grid operators for transmission. Co-ops and city owned utilities are investing in build outs of manure bio-gas systems. 2 phase digester systems extract maximum gas. Germany has approximately 160.000 mixed agrarian, cattle, poulty, pig feed lot, and dairy operations. Planning now, is for village energy co-operatives- to install not only digesters,but gas storage- and double power generation capacities- (that is, instead of generating power 24/7, these systems do not generate between 10 p.m. and 4 a.m., and between 10.00 .a.m. to 4 p.m. when solar is up and working. – but with double the output, and SMART GRID coordinated- to the expanding solar p.v.and wind installations. in rural regions.
    Due to a number of factors, racking and installationof photo voltaic is 80% less expensive in Germany than the U.S.. Heat – recapture/fuel systems are also lowering the costs of materials going into solar p.v., while new breakthroughs such as hybrid silicon solar p.v. with glass voltaics, covered with fresnel lenses pushes efficiencies- to 53.9%. That is, solar is rapidly reaching grid parity and will cost less than 35 Euro cents per installed producing watt capacity- so we can look forward to resumed high installation rates of solar at between 6 to 10 megawatts per annum…By 2030, a combination of advanced rooftop solar plus the build out of manure methane recapture- supplemented by aqueous fuel systems on all 150.000 German farms that come in question for them- will mean that solar and manure methane recapture – will provide over 35% of German´s 6 a.m. to 10.00 p.m. power needs. In advanced methane recapture systems- the gas is stored, and mixed with “aqueous fuel systems”, and is burnt on advanced, efficient fuel cells with additional, heat difference Alpha Stirling motors driving generators to squeeze even more power out of this “back up, baseline power system for expanding solar capacities. At an average output of 750 kilowatts per small farm unit, the combination of widely installed rooftop solar with manure methane/aqueous fuel SMART GRID coordinated back up baseline power will provide over 35% of German weekday power needs. The environmental protection impact means not only saving on fossil fuel based carbon dioxide emissions, but also cutting the methane emissions from manure- which has a greenhouse gas warming effect 20 to 25 times higher than co².
    Add farmer cooperative wind turbines in the fields where applicable, and German rural region villages will generally consistantly and constantly produce more power and usuable heat than they consume- sometimes up to ten times more.

    Likewise, German municipal utilities have put/are putting methane recapture systems on all sewage treatment plants- Munich is expanding power production on its sewage methane recapture system- with “aqueous fuel systems” and doubling power output from sewage processing- meaning a full 100 kilowatts of from its sewage sludge methane recapture- after recapture, it is screw pumped to a big 400 megawatt garbage incineration plant (which also cuts anthropogenic methane emissions.
    Munich utilities also installed a large methane digester- at the Munich zoo- and all uneaten feed and animal manure is ground and fed into it, providing more than enogh power and heat for all the zoo buildings, plus feed power and heat into the power and district heat grids.

    Sewage sludge and zoo methane recapture, and garbage incineration provide close to 20% of Munich´s thermodynamically generated power. The city owned utilities also have about 150 megawatts of hydroelectric power, 40 megawatts of its own solar power, and participate in onshore and offshore wind farms-.and will soon have 1000 megawatts of wind power capacities. They also purchase and redistribute over 600 megawatts of private and publicly installed rooftop solar. installed rooftop solar on the F.I.T. basis.
    That is – waste-to-power, hydro-electric, wind, and solar already provide over 55% of the city´ss energy needs.
    Again, all of Munich´s thermodynamic power plants are hooked up to now close to 800 km of district heat- which saves over 6 million barrels of heating oil every season.
    Poop power from manure and sewage sludge methane recapture is coming into increasing use. It decreases anthropgenic methane emissions.
    Cistercian monks in Austria- after W.W. II were the first to capture methane from cow manure.. They had purchsed two Cadillac V8 engines from a wrecked U.S. Sherman tank- hooked them up to generators, and ran the hot exhausts and cooling water through heat exchangers- providing the entire monatery farm complex with power heat, and hot water. Because methane burns clean, those engines were in use for over 30 years before they finally were replaced by fuel cells.
    The more advanced modern systems apply fuel cells- which are more efficient. The Benedictine monastery of St. Otillien is expanding its fuel cell power generation – from 150 head of cattle, by adding advanced heat difference Alpha Stirling motors to the system before the exhaust heat -micro-district heat- heat exchange system.
    As stated, there are over 150.000 farms in Germany which have an enormous energy potential from manure methane recapture and which will be buildingout in co-operation with co-operatives and city and town owned utilities. The village of Wildpoldsried in SW Bavaria in the alpine footfill region of the Algäu applies rooftop solar, hilltop wind, and manure methane recpture and other technologies – to generate over 6 times more energy than it consumes. It´s “energy farmers” make more money selling power and local village center district heat than they do with growing crops,feedlot and dairy operations. (from wind, small hydro, manure methane recapture, rooftop solar.) The next expansion will be a village sewage sludge “methane recapture unit.”.
    All villages in the lgau region are expanding that way, encouraged by the Algäu Elektrizitäts Werk, the local utility because a big 3 gigawatt nuclear reactor will be temporarilly shutting down- at the end of 2022. (And is being converted to deep geothermal dry hot rock.)

    Germany is exiting nuclear and fossil fuel for power and building heat with a broad synergy of energy efficiency and renewable energy measures, including waste-to-power systems.
    There is still another source of income opening up for German “energy farmers” in addition to solar, wind, small hydro, and bio-gas systems. That entails generating hydrogen from excess solar and wind- and pumping that into manure extracted from bio-gas systems (still loaded with methane,by the way. Adding a cheap to obtain mineral catalyst, that goes into a “solar and wind-gas” powered “pressure cooker”. and it comes out 24 hours later as synthetic light grade crude oil.
    This is especially relevant in conjunction with aqueous fuel systems. These can provide the basic heat and power in agrarian region using only 20% of the won methane, while the rest can be “exported onto the gas grids” at going prices. At the same time, wind – gas can hydrogen enrich the cow manure and “cook into bio-crude.)
    Thus the “energy income to village co-op farmers comes from selling solar, wind and bio-gas/aqueous energy onto the grid, an average of 10 cubic meters an hour of excess gas going onto the gas grids, (240 cubic meters a day) and about 5 barrels of light crude per day, picked up by refineries like milk by dairy operations.
    I advisedly note that the Munich regionis about the same size as the Milwaukee region… but tht its fossil fuel consumption is already 70% lower per capita for urban transit, building power and heat, than Milwaukee. And that difference means “margins”, a booming economy based on “sustainability technologies”, and less than 3% unemployment for the region. Sewage sludge methane recapture and manure methane recapture are integral parts of the German “Energiewende”.