Poop to Power – $30-40M Anaerobic digestion RNG deal between Bioenergy DevCo and Cheseapeake Utilities

June 7, 2020 |

Big project news came in that Chesapeake Utilities Corporation entered into an agreement with Bioenergy DevCo to purchase biogas generated from organic materials at BDC’s facilities in Delaware which will be processed into renewable natural gas. The program uses excess poultry organics to create sustainable, carbon-negative energy source to augment utility portfolios and the total project value is estimated to be in the $30-$40 million range over the term of the project, with Bioenergy DevCo committing to delivering up to 300,000 MMBtus of renewable natural gas annually.

The Digest covered lots of poop to power projects in December 2019, like Vanguard Renewables partnering up with Dominion Energy, Vanguard’s slide guide on poop-powered RNG, and University of Calgary’s latest discoveries with poop to plastics and biofuels. But this one is different. For one, we are now talking chicken shit instead of cow crap. One thing remains the same – poop is power and being able to actually use a waste product that would otherwise go to a landfill or incinerated and cause pollution either way is amazing progress for a more sustainable future.

In today’s Digest, project details, the anaerobic digestion tech behind it, 3 other projects in the works, startling statistics, how this deal will help create a more sustainable energy and waste system for Delaware and the surrounding regions, and more.

The Project

Bioenergy DevCo, a global developer of anaerobic digestion facilities that create renewable energy and healthy soil products from organic material, entered into an agreement with Chesapeake Utilities Corporation, a NYSE-listed diversified energy company, on a project to remove excess organics from the poultry industry and convert it into renewable natural gas. Gas created at this facility will now be used to heat and power homes in Delaware, creating a fully circular waste-to-energy economy for the region.

This natural gas offtake agreement follows the announcement made late last year that BDC would be working with Perdue Farms to process excess organic material from Delmarva chicken facilities. BDC is currently developing their state-of-the-art Bioenergy Innovation Center which will generate carbon-negative natural gas using materials from Perdue and other food processors.

The intent is for BDC and Chesapeake Utilities Corporation affiliates Eastern Shore Natural Gas, Chesapeake Utilities and Marlin Gas Services, to collaborate on this project in addition to several other project sites where organic waste can be converted into a carbon-negative energy source. Beyond the environmental and energy benefits, this project will also support the economy in the Delmarva region.

The resources generated from organic material at BDC’s anaerobic digestion facilities in Delaware, known as the Bioenergy Innovation Center, will be processed by Chesapeake Utilities Corporation, and Eastern Shore Natural Gas and Marlin Gas Services will facilitate the transport and receipt of RNG for multiple suppliers through its interconnect facility and equipment. Marlin Gas Services will transport the sustainable fuel to Eastern Shore Natural Gas, Chesapeake Utilities Corporation’s interstate pipeline, where it will be introduced to CPK’s own distribution system and ultimately distributed to its natural gas customers. This project provides the opportunity for Chesapeake Utilities to maintain the green attributes of the RNG by distributing the gas to its own natural gas distribution customers.

Throughout the partnership, BDC and Chesapeake Utilities Corporation aim to jointly pursue a set of additional project sites to maximize the potential for RNG.

The AD Tech Behind It

First, a short primer on anaerobic digesters – Anaerobic digesters use naturally occurring microbes to break down food waste into biogas and an organic soil amendment used by farmers. This waste would otherwise be sent to a landfill where it would decompose and release greenhouse gasses, or it would be incinerated, contributing to air pollution. Anaerobic digestion sequesters and transforms this waste, reducing the burden on local infrastructure and providing a source for renewable energy.

So what makes BDC’s digester technology special? Their tech is designed to optimize the quantity and quality of RNG created, using a data-driven process that ensures reliable utility-grade gas production.

BDC’s facilities utilize a modular design with rigid tanks where feedstocks are processed into renewable natural gas. BDC’s AD process uses a combination of technology, microbiology and engineering expertise to manage the digestion process and ensure the highest quality gas production. This includes state of the art technology that helps manage the rate at which feedstocks are added into the digesters. This process and associated technology allows them to manage a broad variety of co-digested materials managing such challenges as high-fat content or mixed inputs.

This as well allows BDC to adjust the strength, direction and location of mechanical mixing arms to ensure digestible materials are exposed to bacteria and manage the natural microbial content and formulations within the digester as well as the supply of micronutrients supplied by the company to promote bacteria growth.

BDC AD facilities are equipped with a battery of proprietary technologies that, for example, monitor conditions inside the digester like temperature and PH. This telemetric data is shared with plant staff and can be monitored and adjusted remotely. At the same time, lab technicians at every facility take daily readings on-site, testing samples in a laboratory setting to monitor natural microbial activity.  And as well, the company manages and operates one of the only laboratories focused on AD performance with data accumulated over its 22 year history

Bioenergy DevCo is currently developing anaerobic digesters throughout the United States and has gained a strong foothold in the Mid-Atlantic region following a recently announced 20-year agreement with Perdue Farms, which had the foresight to more sustainably manage poultry litter and material from processing at its facilities on the Delmarva Peninsula.

Here is a rendering of what the plant at the Bioenergy Innovation Center in Seaford Delaware will look like when it is completed later this year.

And here are photographs of similar BDC digesters currently operational in Europe.

3 Other Facilities in the Works

BDC is working on several facilities, some of which have been publicly announced and others that they will be speaking about more publicly soon. The three announced facilities include:

  • The Bioenergy Innovation Center, formerly the Perdue AgriRecycle Facility in Seaford, Delaware. This is the result of a 20 year agreement between BDC and Perdue Farms and will process byproducts from local poultry operations in the Delmarva Peninsula.
  • The Maryland Food Center Authority:  An anaerobic digester to be co-located with the Maryland Food Center, servicing one of the largest food terminals on the East Coast. This facility in Howard County will process 100,000 tons of food waste per year, significantly reducing excess organics now being sent to incineration or already overcrowded landfills.  This facility is estimated to produce 275,000 + MMBTU’s of truly renewable natural gas for a combination of pipeline injection or in vehicle fuels as compressed natural gas.
  • An anaerobic digester in Cecil County, Maryland to be located at the Principio Business Park.  We estimate a project size of between 70- 100 K tons per year of food and agricultural waste initially supplying compressed natural gas to the 100’s of fleet vehicles on the campus, but are also in early discussions with several utility and energy companies for direct injection into the pipeline

BDC’s Bioenergy Innovation Center

To clarify what the Bioenergy Innovation Center is, you may remember it as the former Perdue AgriRecycle Facility. This site was originally built by Perdue as an advanced composting facility to serve the Perdue poultry farms located in the Delmarva region. The facility has now been turned over to Bioenergy DevCo and renamed the Bioenergy Innovation Center.

BDC is currently constructing working through the permitting process for the finance, build and operations of anaerobic digester on the site to anaerobically digest byproducts from these same Perdue farms, but will also continue to support the composting work as well removing micronutrients from the Chesapeake Bay. It is also BDC’s working test lab for introducing innovative approaches to anaerobic digestion at utility scale in the United States.

Startling Stats

BDC’s Ettinger shared some impressive numbers with The Digest when talking about RNG. Take for example that each year, the US generates more than 70 million tons of food waste – add in the manure from 8 billion cows, chickens, turkeys and pigs and there is a lot of organic material that can be recycled each year.

Maximizing America’s AD potential could supply enough RNG energy to power nearly 80,000 homes for a full year, replace as much as 7 billion gallons of diesel used in transportation and generate up to 70,000 jobs. It could create the environmental benefits equal to taking 15.4 million cars off the road.

BDC’s Maryland Food Center facility alone will save about 26,000 tons of CO2eq from the atmosphere each year – the same environmental impact that a forest area 40 times the size of Central Park can provide, according to Ettinger. No matter how you look at it, those are nice numbers.

Reaction from the stakeholders

In an exclusive interview with The Digest, BDC’s CEO Shawn Kreloff said, “This deal with Chesapeake Utilities Corporation closes the loop on our vision for a truly circular economic model for the Delmarva Region. Working with Perdue, we are able to support a vibrant local poultry industry, help them be more sustainable and be better stewards of the ecosystem they share. We are then able to take the organic materials that would otherwise go to a landfill or an incinerator – creating pollution and adding to climate change – and turn them into a valuable commodity that can be used to heat homes, power vehicles and more – all while having a negative carbon footprint. It’s a win-win-win for businesses, the community and the environment.”

“Chesapeake Utilities Corporation, by working together with municipalities and the food-industry, understands that digesting organics is a solution that creates a sustainable, environmentally-friendly supply of renewable natural gas while also helping to solve major waste management problems,” said Shawn Kreloff, CEO of Bioenergy DevCo. “Recent estimates have shown that turning agricultural waste and excess organics from the poultry industry into truly renewable natural gas could replace 7 billion gallons of diesel fuel and generate 70,000 new jobs. Companies that embrace utility-scale anaerobic digestion, like Chesapeake Utilities Corporation, are on the forefront of a revolution in waste and energy infrastructure innovation.”

As utilities look to diversify their portfolios to address carbon issues, renewable natural gas from anaerobic digestion is quickly becoming a sought-after fuel source. Here’s what Jeff Householder, President and CEO of Chesapeake Utilities Corporation had to say, “We have taken steps to ensure that Chesapeake Utilities Corporation can support the emergence of the renewable fuels market and do its part to assist in managing agricultural and other waste recovery. These investments and our recent tariff changes to establish gas quality standards are evidence of our efforts. We see this partnership with BDC as the next important step in our commitment to operating with a focus on the environment and sustainability. By utilizing the RNG derived from processing excess poultry industry organics in the Delmarva region and transforming that into carbon-negative energy source, we can help fuel homes and businesses throughout the community while supporting a more sustainable future,” said. “Beyond sustainability, these projects represent profitable growth investments across our value chain – natural gas transmission, natural gas distribution and our unregulated mobile compressed natural gas (CNG) business, Marlin Gas Services.”

Bottom Line

This project is certainly a win-win and involves major players. But if you are concerned that poultry and meat plant closures due to COVID-19 would affect these types of projects, have no fear. While BDC wouldn’t comment on the internal affairs of their partners like Perdue, Ettinger told The Digest that they “don’t expect any major changes in the amount of protein industry waste stock coming to the anaerobic digesters, nor any delays or reductions in gas production due to the pandemic.”

So stay tuned for more from BDC and others involved as we have no doubt will be more projects announced soon.

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