Depending on how high electricity tariffs are in a particular country, it is often economical for food processing companies to consider biogas installations, according to Andrew Taylor, MD of Cape Advanced Engineering (CAE) of South Africa – and particularly to ensure continuity of supply.
Taylor claims that his company has recently brought the cost of industrial biogas installations down by up to 50% in some applications – when compared with installers from Europe and the US. And CAE is keen, he says, to enter joint ventures with companies which have high potential for biogas power generation and heat utilisation. In joint ventures, CAE would arrange the financing, erection of the plants, carbon credits, generating licences, etc.
In 2007 CAE took a decision to invest in developing biogas technology, and all its technology is now developed and made in South Africa. Taylor says this decision was taken on the basis of the South African government’s commitment to increase renewable energy generation.
He says that a biogas power generating machine is fundamentally an industrial diesel engine, but has elements of a gasoline engine (including spark plugs). CAE has long had expertise in both diesel and gasoline engine technology.
Piggeries are the lowest-hanging fruit for biogas installations, he says. The seminal South African biogas power development, which was started in 2006, is at the Humphries Boerdery piggery in Bela-Bela, Limpopo province. This project is now producing biogas and electricity.
Taylor says CAE supplied the prototype power plant for that project in 2009 and 2010, at its own cost, in order to gain experience. The bio-digester at Bela-Bela, was built to the specifications of a US supplier. As a result of this project and other research, it has developed new designs and is now installing bio-digesters at two big piggeries in Mpumalanga province, South Africa.
Taylor says that these piggery developments have high relevance to the food processing industry – although beyond piggeries, the technology becomes more complex.
In food processing, abattoirs and dairies are the low-hanging fruit. The raw materials used would largely be stomach content and blood residue in the abattoirs, and manure and possibly whey in the dairies.
A huge advantage with biogas installations is that if, for instance, 200kW of electricity is generated, at least the same amount (200kW) of heat can also be recovered, thus doubling the energy yield. That would be particularly useful in dairies, abattoirs, canners, and other processing plants.
But, he says, CAE’s most exciting projects are in the rest of Africa, where the regulatory and business environments are often much more conducive to development, economic growth, job creation and power generation than in South Africa. There, CAE is currently involved in projects with municipalities (for the removal of waste), and with abattoirs and piggeries.The costs
Whereas overseas technology would typically cost $4-6m for an installation generating 1MW, CAE’s technology costs about $3m, he says.
But a company which can use all or some of the power produced itself could opt for a much smaller project, which would be proportionally cheaper in cost. The most viable projects are where a company uses its own electricity and heat produced.
Where less than 1MW of power is produced – as is the case with Humphries Boerdery – the project may still be viable if it can sell the energy to another private user at relatively high rates.
Thus, for instance, the Humphries Boerdery project has the capacity to generate about 300kW, but is looking to sell 200kW to another company which would pay a premium for this “green” energy.
The electricity is then normally transported across the national grid, for which a small fee is usually paid to the national electricity company.
Taylor says with a premium price paid for electricity, the internal rate of return of a project is usually 13-17%; and if carbon credits can be got, it can go up to 30%.
CAE: Tel +27-21-577-3413; email@example.com