Biogas: is your council about to waste your waste?

Food waste: valuable stuff
Food waste: too valuable to throw away
Biogas - a methane-rich fuel made from rotting food waste or sewage - has huge potential as a clean, green fuel for the UK. But a perverse web of subsidies, rules and contracts could mean UK councils are about to kiss goodbye to the real power of waste...
This could be a huge missed opportunity that will cost our children dear...

When David and Ruth of The Archers decided to set up an anaerobic digester to make biogas from farm waste, they quickly ran into trouble. Intended to produce electricity for the national grid and heat for their polytunnels, the project was defeated by boardroom bust-ups and NIMBY protests led by local battle-axe Linda Snell.

But the would-be energy entrepreneurs of Ambridge don’t know the half of it. The real-life obstacles to anaerobic digestion (AD) are massively greater, the unintended consequence of perverse British subsidies, EU deadlines and local authorities scrambling to sign long term PFI waste contracts. As a result, the potential of hundreds of thousands of tonnes of organic waste to produce sustainable energy and mitigate climate change could be squandered for up to 25 years.

Clean and green

Unlike most biofuels, the climate credentials of biogas are uncontestable. The AD process involves feeding organic wastes into a digestion plant that excludes oxygen, where microbes break it down to produce methane-rich biogas for energy, and a nutrient-laden ‘digestate’ that can be used to make fertilizer or compost. Because AD displaces fossil fuels and carbon-intensive fertiliser - and because it exploits methane that might otherwise be released to the atmosphere - biogas is reckoned to deliver negative greenhouse gas emissions of as much as 200 per cent in some circumstances.

The energy potential of biogas is also huge. National Grid estimates that biogas could supply half our household gas consumption, or one fifth of total UK gas demand, while Environmental Protection (formerly the National Society for Clean Air) calculates biogas could replace 16 per cent of our transport energy – three times more than is needed to run the entire public transport system.

Yet Britain may not reap the full benefit of biogas for a generation. One problem is that around a third of the 16-18 million tonnes of food waste we jettison annually is controlled by local authorities, and they are in a bind. Under the EU Landfill Directive, councils face strict deadlines in 2010 and 2013 to divert organic waste from landfill to more sustainable means of disposal. And these looming EU targets are creating 'a degree of crisis management', says Steve Burdis, vice chairman of the National Association of Waste Development Officers.

In fact, current British targets, subsidies, and procurement rules are driving councils and their private sector waste contractors towards a range of far less energy efficient options such as incineration, and some that recover no energy at all, such as industrial composting. The government, which is a recent convert to biogas, plans to introduce new incentives in 2011, but by then it may be too late. To avoid swingeing fines under the EU directive, councils are rushing to seal PFI deals with waste disposal contractors that could effectively lock in their choices for a quarter of a century. According to Johnny Johnston, sustainable gas manager for National Grid, 'There is a concern that valuable waste streams for generating biogas may be lost'.

Anatomy of gas

Anaerobic digestion has been used in the British water industry for over a century to treat sewage sludge because the process kills pathogens. But the energy content of the biogas is still largely wasted. Some is simply flared off, but most is used to produce electricity in inefficient combined heat and power (CHP) engines at the sewage works where there is little demand for the excess heat because, unsurprisingly, nobody wants to live next door to a sludge farm. That makes the process only about 30 per cent efficient overall, meaning two thirds of the energy in the sewage effectively goes up the chimney.

That level of inefficiency offends John Baldwin of CNG Services to the core. As an energy consultant, he argues passionately that the best thing to do with biogas is inject it into the local gas mains, where it could be consumed in domestic boilers that are up to 90 per cent efficient, or used as transport fuel, particularly for lorries and buses where good low carbon alternatives are in short supply.

'It’s a scandal to use biogas to make electricity when we can get around three times as much energy from the same volume of gas by putting it into the gas grid,' says Baldwin. 'There are lots of other ways to generate green electricity, but very few for making renewable heat and transport fuel, so that’s how we should use it'.

Injecting biogas into the gas grid (BtG) already happens routinely in Germany, Austria, the Netherlands, Sweden, and Switzerland, but has never been done in Britain – until now. In June the water company United Utilities and National Grid won £4.3m from Defra to fund a pilot project at the Davyhulme sewage works in Manchester using gas from an existing AD plant. Raw biogas, which is 65 per cent methane, will be upgraded into ‘biomethane’, which is 97 per cent methane, the same concentration as natural gas in the mains. Some will be used to fuel 24 converted sludge lorries, and the rest injected into the gas mains to supply about 500 homes.

Biogas 'cleaning' equipment   photo: CNGservices

If all the country’s organic waste resources were used for BtG, National Grid calculates it could supply about half the gas currently consumed in British homes. Combined with a major improvement in home insulation, it could be even more significant, says Johnny Johnstone, the National Grid manager responsible for the Davyhulme pilot.

'Biogas combined with increased energy efficiency has the potential to completely eliminate emissions from heating in the UK,' Johnstone says.

But the playing field is tilted steeply against BtG by the current subsidy regime. At the moment there is no subsidy for renewable heat, whereas renewable electricity attracts hefty subsidies in the form of Renewable Obligation Certificates (ROCs). Electricity generation from biogas gets two ROCs per megawatt hour, currently worth about £100 in total, roughly double the market price of the electricity itself. This gives a perverse but powerful incentive to process waste in ways that squander two-thirds of the potentially recoverable energy, and which reduce greenhouse gas emissions by far less.

Mass burn

An even bigger threat to the development of biogas in Britain is the continued construction of large numbers of ‘energy from waste’ (EFW) plants – otherwise known as incinerators. These burn rubbish to produce electricity, but have a number of major drawbacks. They are usually only 25% efficient, partly because there is seldom any use for the waste heat; nobody wants to live next door to an incinerator any more than a sewage plant. Because incinerators are inefficient, and because much of the waste they burn is plastic, their fossil CO2 emissions are a third higher than those from a gas fired power station, according to a report produced by waste consultancy Eunomia for Friends of the Earth.

Worse, because incinerators are large plants that require a steady diet of hundreds of thousands of tonnes of waste per year, they tend to discourage councils from collecting food and garden waste separately – the recommended policy of WRAP, the Government’s waste watchdog – and that prevents further increases in recycling and means less feedstock available for anaerobic digestion.

In Sheffield for instance, around 70 per cent of municipal waste is incinerated and less than 30 per cent recycled, and there is no separate collection of food waste. Nor is it likely in future, because the city is producing less waste than originally forecast, and this ‘shortfall’ means the contractor now wants to truck waste in from neighbouring districts to keep the incinerator going.

In East Sussex, where the county council has just won final planning approval for a controversial 240,000 tonne per year incinerator at Newhaven, government funding is conditional on the county achieving 50 per cent recycling rate, but there are no plans for separate collection of food waste, which will end up in the incinerator by default.

'Once you go for incineration, you close the door on the production of biomethane', says Michael Chesshire, Technology Director of Biogen Greenfinch, which runs an AD plant for Shropshire County Council, one of only three based on food waste in the country, 'it’s a big risk'.

'This could be a huge missed opportunity that will cost our children dear,' says Oliver Harwood, of the Country Land and Business Association, whose farmer members could provide much of the feedstock for AD.
'It really is the last minute of the last hour in a major crisis'.

Yet incinerators are still being actively considered in major PFI (Private Finance Initiative) waste deals up and down the country, including Leeds, Staffordshire, Hertfordshire, and South Tyne and Wear. In total there are 28 PFI deals in the pipeline, of which 16 include incinerators as their ‘reference case’ – the template against which private sector bids are assessed. If all these incinerators were built, they would require around 3.4 million tonnes of waste per year. On average about one fifth would be food waste, which John Baldwin of CNG Services estimates could produce enough biogas to supply 43,000 homes with renewable heat, or transport fuel equivalent to over 50 million litres of diesel, worth about £55 million at the pump.

Is your council about to waste your waste - interactive graphic

source: Defra website

Of course, AD cannot process plastics and other non-organic residual waste, but there is a range of technologies that can, without the major drawbacks of incineration, and which can be used in combination with AD – as demonstrated by a deal struck in April by Greater Manchester with Viridor Laing to manage 1.2 million tonnes of waste annually. Most of the waste will go through a Mechanical Biological Treatment (MBT) plant, which shreds, sorts and recycles much of the waste before turning the residue into fuel pellets for a chemicals plant nearby and processing the remaining organic fraction in four AD plants. The biogas will be used to generate electricity, and some of the heat will be used to dry the digestate to make more fuel pellets.

Technology neutral?

Yet most local authorities continue to favour large incinerators – which are inefficient, and block further progress on recycling and biogas – over solutions such as MBT and AD that are better for the climate and the energy supply. According to Dominic Hogg, director of the waste consultancy Eunomia, it is the result of a litany of policy blunders over the years, and two structural problems in particular.

First, although councils overwhelmingly claim to be ‘technology neutral’, and their job is simply to pick the most competitive bid, the entire PFI procurement process favours incineration. The technological conservatism and financial interests of all the players – waste companies, legal and technical advisors, banks, Defra – pushes councils towards big energy-from-waste plants, says Hogg. As a result, councils are anything but neutral: 'They might as well start out by saying "build us an incinerator, boys, what’s the best price?"'

Second, the division of responsibilities between county councils and district councils discourages joined-up thinking, and that discourages anaerobic digestion. District councils are responsible for collecting household waste, and county councils for disposing of it. That means the counties have tended to worry about disposal costs, and that makes AD look expensive relative to composting. However, once the cost of collecting the food and garden waste – borne by the district councils – has been taken into account, there is 'scarcely any difference' between the overall costs of AD and composting, according to a study by Eunomia. The report concludes: 'This is an important observation as traditionally local authorities have tended to view AD as an expensive alternative to composting options'.

And still do, apparently. As part of Greater Manchester’s deal with Viridor Laing, almost 180 thousand tonnes of food and garden waste per year will be collected separately. But surprisingly the separated waste will be processed through ‘In-Vessel Composting’ rather than AD, despite the construction of four MBT-AD plants for the residual, ‘black bag’ waste. In an email, David Taylor, Director of Contract Services for Greater Manchester Waste Disposal Authority, explained:
'All of the garden/food waste destined for IVC is suitable for AD treatment. However if this was mixed back with residual waste to go through MBT-AD it would not count towards recycling under DEFRA definitions. This separately collected stream would need a dedicated facility to produce a compost like product'.

When I began to probe why they had not procured such a facility, Mr Taylor stopped replying to my emails.

If the waste that Manchester plans to put into IVC - producing no energy - were diverted into an AD plant, John Baldwin of CNG Services estimates it would produce over 22 million cubic meters of biogas per year, enough to supply 12,000 homes, or produce transport fuel equivalent to 13 million litres of diesel - worth £14 million at the pump.

Wasting time

It is difficult to avoid the conclusion that policy on biogas is a farce, but it wouldn’t be hard to put right. Dominic Hogg favours a simple rule restricting the capacity of incinerators to just 25 per cent of an authority’s residual waste. That would force councils to develop more recycling, anaerobic digestion and flexible MBT to deal with the rest. 'Flanders already recycles 70% of its waste,' says Hogg, 'so we must be able to recycle 75% by 2020'.

Michael Warhurst, senior waste and resources campaigner for Friends of the Earth argues we should scrap the Private Finance Initiative altogether. The think-tank Policy Exchange recently proposed abolishing two tier waste authorities, and introducing an incineration tax, which is also being developed in Ireland.

In the waste industry, contractors would be grateful even for an early indication of the level of support the Renewable Heat Incentive will deliver for biogas from April 2011, but the government will only launch a consultation this summer. Tony Lewis, business development manager for Aecom Design Build, which provides both incinerators and AD plants, says the uncertainty is damaging. The company is bidding for five projects at the moment, and Lewis says if he knew what the value of the RHI was going to be, they would be offering very different solutions: 'In three years’ time when all the waste PFIs have been let, and tied up for 25 years, we’ve missed the opportunity to push digestion because at the time everybody was bidding it didn’t make commercial sense to do it'.

That would be a disaster not only for the climate and our energy supply, but also for council tax payers, according to another Peter Jones, former director with waste company Biffa, and now waste advisor to Boris Johnson. As glacial as the development of British waste policy may be, the direction of travel is clear, says Jones, and organic waste is going to become a valuable commodity that local authorities will be able to sell, not pay to be taken away. Any council signing an incinerator contract today that ties it into rising fees for 25 years would be 'crazy'. The problem is, that may be exactly what many are about to do.

David Strahan is a journalist specialising in energy issues, and author of The Last Oil Shock (John Murray, £12.99). Visit his website here.

This could be a huge missed opportunity that will cost our children dear...

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