BioFertilizer and BioGas from Animal Waste
Here’s what I’m submitting for this month’s “Craig Shields–Clean Energy Deal of the Month” at the Hedge Connection, a website that brings together hedge fund managers with investors/allocators.
I did a webinar a while back with these folks, and I’ve always remained interested in the subject (biofertilizer and biogas from animal waste), and hopeful that we can get this project done.
Craig Shields–Clean Energy Deal of the Month
BioFertilizer and BioGas from Animal Waste
Here’s another installment from Hedge Connection contributor Craig Shields, a senior consultant to the cleantech industry, in which he discusses one of the most exciting business opportunities he’s come across recently in his field of engagement. You may recall that Craig finds himself in a unique position to make such a submission: via his website, 2GreenEnergy.com, he reviews many hundreds of business plans annually from cleantech entrepreneurs all around the globe. He has 7500 subscribers to his newsletter, most of them hard at work in the development of some sort of cleantech concept: perhaps introducing a new invention or a new business model, perhaps a standard implementation of solar, wind, biomass, hydro, or geothermal – or a project in a related field: energy storage, smart grid, or electric transportation.
Here, Craig presents a summary of another one of his personal favorites; as always, we hope you find it worthwhile. – ed.
As I remind Hedge Connection readers, the website 2GreenEnergy.com, entering its seventh year, represents an effort to bring together entrepreneurs in renewable energy and related disciplines with the sources of investment capital they need to take their business concepts forward—a task that has required me to review literally thousands of ideas (inventions, new business models, unique implementations of old technology, etc.) with an eye towards identifying those that appear to hold real promise.
Here’s one of the most exciting and rare opportunities I’ve ever come across. As it happens, the manure from 400,000 buffaloes in a tightly confined area of Southern Pakistan is creating one of the worst ecological disasters and threats to human health on the planet. Three million tons of buffalo manure that is leaching into the Arabian Sea has contributed to the destruction of Mangrove forests, salinity in coastal soil, and fishermen who must now row five kilometers out to sea to find live catches.
Perhaps because the affected area is regarded as politically challenged, this large scale environmental and health disaster is almost completely ignored.
Now, a talented team of people stands ready to expand their pilot plant that is creating small but predictable amounts of compost, liquid fertilizer and biogas up to the scale necessary to tackle the problem, while creating an income stream of over $100 million annually.
The precise location is Landhi, a suburb of Karachi, where these 400,000 animals provide virtually all the milk and meat for the city’s 20+ million residents. The animals are confined to a few square kilometers, and produce over 8,000 tons of dung … each day. The company will use that manure to produce over 800,000 tons of compost annually, and, from the revenues they derive, will build and operate the largest animal biogas plant in the world.
Currently, the company needs to raise $5 million in equity capital, enabling it to borrow an additional $18 million that is required to build the plant and commence operations, which will focus initially on organic fertilizer (compost and liquid) and migrate from there into biogas (CNG); 24MWs of electricity could be produced from the methane if desired.
Again, it’s rare to come across an exciting business opportunity that simultaneously proves enormous social benefits, including:
- Improvement in the quality of life for more than 250,000 people of Landhi and Bin Qasim by removal of manure from streets, fields, sea and atmosphere.
- Almost $4M per annum paid to farmers for manure, rather than energy cost pumping it into the sea, creating income rather than expenditure in disposal.
- Over 800 local jobs to be created in the local economy.
- A 20-bed maternity clinic will be provided to counter the high infant and maternal mortality rate in the area.
- An animal welfare laboratory will be provided, enabling feed to be tested and will improve health and yields from the buffalo and other livestock.
- The health of the populace will be vastly improved, by stopping burning of the dried dung (not for fuel, just to create space for more).
- 10% of profits will be used to set up local enterprise groups, to train and enable local entrepreneurs to set up value added product businesses in the colony.
- Prevention of manure pollution will stop destruction of marine life, and facilitate re-growth of the mangrove forests and saline encroachment as a result.
- Local fishermen will benefit from a significantly longer fishing day, healthier fish closer to shore, and a larger catch.
From an investment perspective, this is an opportunity to take an early position in one of the most significant ventures in the renewable energy industry. Participants can invest in equity, provide grant or loan funding, or assist in the promotion of the enterprise. It’s a project that is win-win for all on a remarkable scale.
Conclusion
Believe it or not, I’m sometimes asked, “Does this have to be in Pakistan?” The answer: Yes. I think a great deal of myself and my business acumen, but I’m willing to admit my shortcomings; in particular, I’m incapable of moving almost half a million animals that weigh 1500 pounds apiece to another part of the world that may be more to investors’ liking. Having said that, this remains one of the most remarkable opportunities I’ve ever run across.
As always, I’d be happy to entertain any and all questions about the company and the project, or put Hedge Connection readers directly in touch with the team.
Please send details of machinery/plant,manufacturing detsails for BioFertilizer and BioGas from Animal Waste
I’m not at liberty to do that. If you’re a potential investor, I’ll put you in touch with the deal’s principle.
I wish the project the best of good fortune – it seems the only real challenge is the location, and I believe that can be overcome.
Well, note what I wrote (tongue in cheek) at the bottom: I think a great deal of myself and my business acumen, but I’m willing to admit my shortcomings; in particular, I’m incapable of moving almost half a million animals that weigh 1500 pounds apiece to another part of the world that may be more to investors’ liking.
Having said that, I’m sure there are other sites somewhere on the globe with similar conditiosn.
This looks like an excellent project. It could potentially also offer a solution to managing human sewage and food waste.
This could possibly be of interest to one of the sharia compliant investment funds found throughout the Middle East, and more recently appearing on some European markets such as London. (there is a large minority community of Pakistani heritage in the uk).
Excellent point; I’ll pass this along to the deal principle, who happens to live in Manchester.
One more thing – many power projects are funded based on a power purchase contract.
This project could possibly obtain several take off contracts –
1. For gas or power,
2. For fertilizer
3. For the disposal of sewage sludge
4. For the disposal of food waste.
5. Enhanced voluntary carbon credits may also be possible based on the overall social, environmental, biodiversity and climate benefits with which it is associated.
If such contracts can be agreed in advance subject to funding of the project, then the investors will have a reasonable assurance of their future income from the project making funding more likely.
Absolutely true. The project starts with biofertilizer, and I know the deal principle has discussed the off-take, but I don’t know where he is with respect to a signed agreement. I’ll ask. Thanks very much.
Craig,
Getting past the sad situation these unfortunate animals find themselves, your project has a great deal of merit.
Pakistan, is a very complex nation. A nation armed with nuclear weapons, but incredibly volatile and notoriously difficult to do business with in a domestic context. The bureaucracy is very corrupt, and inefficient. ( not as bad as India, but still difficult).
Pakistan has a population of 190 million, but a per capita income of around $25 per week.
GDP is about $230 billion, or the equivalent of Oregon’s 4 million citizens.
Although Pakistan has some very rich business leaders, there wealth is mostly invested outside of Pakistan.Probably the most environmentally conscious of those who made their fortunes in Pakistan, is the Lakhani brother’s, Lakson group . Chairman Iqbal Ali Lakhani and siblings Amin Lakhani, Sultan Lakhani and Zulfiqar Lakhani, have a well deserved reputation for investment in green industrial practice.
Investors from the middle east , enjoy a special relationship with Pakistan, and often make better partners than local Pakistanis.
Between 2006 and 2012 a great deal of interest was expressed in utilizing the the animal waste of Landhi, with many different projects proposed, and many pilots were commenced.
1) The New Zealand Agency for International Development funded a pilot scheme to turn animal waste into energy and fertilizer.
2) M/S HiRAD Technology, Plc, of the UK, commissioned a $5 million pilot project producing 486 meters cubic feet of bio-gas and 25 kilowatts of electricity per day from cow dung in the Landhi Cattle Colony. The project could produce 2.25 tons of enriched natural manure (organic fertilizer) per day.
3) Koel Ltd. (Karachi Organic Energy Limited) in association with the Aman Foundation, attracted investors.Koel claims it’s plant will start operating in 2016.
4) A New Zealand private consortium, Clean Energy Development Ltd/Empower, also announced the building of a $75 million pilot project, able to process waste from an estimated 400,000 cattle., which produce 7,200 tons of dung per day. Its capital cost is . The pilot phase of the project, to be completed by the end of 2007, would generate 14 tons of organic fertilizer per day
5) The Karachi Electricity Supply Company , announce planes in 2011 to build and enormous bio-gas, in the Landhi colony. The plant was completely approved by the Pakistani government and should already be in operation.
These are just a few examples
.
Have you examined why these projects haven’t materialized ? Have you considered the water supply problems ?
In theory, the project looks a brilliant solution, to a very real environmental problem. my query would be to study carefully all the other projects, to gain an insight into the problems they encountered, before invested one dollar.
Thanks very much for this. In all cases, I recommend investors do their own due diligence, and you raise some excellent points in this specific instance.
A bit of a side note: You mention CNG, but note that Adsorbed Natural Gas (ANG) is an alternative technology for methane storage that requires less complex infrastructure than CNG and may be a useful alternative.
Let me know if you want a short PPT on ANG as an alternative marine fuel.
Craig, you know this is one of my favorite underdeveloped technologies. The same environmental degradation happens around animals in this country leading to a dead area in the gulf of Mexico.
Yes, food waste digests just fine.
Germany derives around 18% of their energy from anaerobic digesters. We don’t even get 1%.
CDB, I would be interested in your PPT.
Best,
Bruce
If you produce energy people will buy it
Bruce,
Er, …Bruce is good to see your enthusiasm for bio-mass.
However, I’m afraid you seem to have get a little carried away in reference to German energy production. Germany is certainly the worlds leading Bio-mass nation, but the percentage is less than 8 % , ( only 1% bio-waste l).
It’s still a remarkable effort by Germany. Germany has in operation more than 7,000 large-scale anaerobic digester plants. In contrast to solar or wind, Bio-mass is mostly used in dedicated power energy applications, ensuring these plants generate a very high percentage of ‘useable’ fuel.
You are right, I had my numbers wrong, 18% of German farms have digesters versus 1-2% here in the USA
That’s ok, it’s an easy mistake to make. But 18% of German farms having digesters, is a really impressive achievement, eh!
Gut gemacht Deutsch Bauern !
= “Well done German farmers!” To which I add: einfach herrlich! (simply stupendous)
What accounts for the difference, in your estimation? Are there incentives?
Craig,
Yes ! The reason why Germany leads the world in Bio-gas production is mainly due to massive government incentives, and assistance at every level. 99 % of all German disgesters produce electricity, while only 1% produce bio-methane. (although government incentives for upgrading to bio-methane production have been introduced).
Government incentives include a very high. guaranteed feed in tariff rate. In recent years German incentives have been adjusted to apply only to Corn waste, not corn itself. The production of ethanol, is regarded as a separate issue from bio-mass.
German farmers have more land available to install large bio-gas reactors than small counties. Size is a real problem for small-holders, although co-operatives, and even small municipal installations can work.
Government investment in the German grid to accept and transmit this kind of feed in power has been a significant factor. Bio-mass generation, has a natural advantage over Wind and Solar, by producing constant power, with it’s own in-built energy storage facilities.
The high tariff, has been augmented with cheap loans, grants, and tax credits, including accelerated deprecation allowances.
But not all the German experience has been a success. In recent years, like the US, German farmers have begun to grow as a preference crop, and manure, bio-waste and other waste sources haven’t been fully utilized. In order to restore agricultural diversity, and attract more waste usage, Germany has been adjusting the tariffs and incentives accordingly.
This very controlled, nation-wide,approach, is beginning to show results. As long as the German taxpayer is content to heavily subsidize the cost of electricity, “Energiewende” remains viable.
Is the German bio-gas industry economically viable as a stand alone competitive industry ? Probably not !
But, in a heavily urbanized industrial nation, where the idea of the country side, and rural life remains a romanticized ideal, it’s popular. It’s important to remember that in Germany, and most of Europe, farmers remain politically very powerful. Germany, like much of Europe over produces food, and governments are forced to find ways to utilize farm production, while keep farming incomes high, so farming remains competitive.
The German system, is well monitored, flexible, and conducted with clear objectives. IMO, it’s only economically viable, within the German context.
In the UK, we are one of the few estates with a large bio-mass reactor. We receive very little assistance from the UK government, but were helped by the actions of an eccentric great-grandfather who was extremely keen on the newly introduced technology of electricity and built his own “mini-grid” ! This fitted in nicely with his earlier gas pipes distribution network. (he also built a small tramway). (curiously enough, his fortune came from coal shares, a resource he despised). Our bio-gas reactor, from a business point of view, is not really a highly economic installation, but then very little about estate management in the UK, makes any sense !
The initial capital cost of construction can be very expensive. Without either naturally occurring marsh gas, or landfill etc, it’s also expensive in terms of labour.
In Australia, I’m in the process of building a smaller bio-mass reactor, to act in conjunction with solar panels. My property is located in a valley with a lot of agricultural waste produced from a unique variety of crops. My purpose is not so much to generate electricity, as fertilizers, and winter gas heating for ourselves, and my neighbours. In particular, we want to supply the valleys retirement homes, and community centres. (we’ve already converted the valley’s community buses to operate as EV/ bio-gas hybrids.)
In countries with large land areas, and little need for intensive animal farming, manure gathering, isn’t economic or desirable. The US experience with Ethanol, is a good example of what can go wrong without very competent government monitoring.
In the Pakistani situation, I would imagine that a very caredful study should be undertaken, as to why the previous attempts failed, or didn’t proceed. In addition, a study of all the factors, including local politics should be undertaken.
It’s my experience that most of these projects in third world nation fail or prove uneconomic, because the promoters of the schemes, were overly idealistic, and ignored the realities of the local context.
Thanks very much. Please see: http://2greenenergy.com/2015/06/14/biomass-subsidies/.
Since these digesters can and should be modular and pre engineered, it would be prudent to do a pilot project to handle 1/10 of the manure to prove that the concept an work. That means /10 as much money to raise to get the project moving forward.
In my experience in this country, every digester is custom designed by an engineer which increases the cost. A pre engineered modular design would lower costs.
The incentives offered by the current administration are helping get more digesters built, but the high costs keep adoption of the technology slow. Also there are not many available for small farms that need the technology.
Current ROI’s are around 12 years, too long for a farmer to tie up valuable credit.
My modular design is expected to lower costs at least 25% and increase gas output by at least 25% which would lower ROI to 5-6 years.
Bruce, you give estimated ROI but do not state location.
Biodigesters tend to be much more economic in hot countries and for large digesters due to reduced / non existent parasitic heating loads. Also, less insulation and higher running temperatures can be used with simpler digester design.
In Pakistan, labour costs are far lower than in the West so this should also help ROI.
Not all digesters in developing countries fail
There are literally millions of functioning small digesters in countries like China, India and Vietnam – mostly optimised for the production of gas for cooking.
Gary,
You are absolutely correct, there are many thousands of small bio-mass digesters in operation around the world. They range from very simple (little more than compost heaps), to very sophisticated, high tech installations.
Bruce makes an interesting point, he believes that a modular bio-mass reactor, could be engineered to be mass produced, thus reducing installation time, construction and labour costs.
The problem is that each installation and circumstances are very different. This makes standardization very difficult. It’s generally accepted that engineering each plant to it’s specific task, produces a more efficient, and superior installation.
There is also a myriad of jurisdictional regulations to overcome. This makes standardization difficult.
( But Bruce’s idea has merit, and is certainly worth exploring)
I am comparing my costs to the cost of currently available digesters here in the USA. Typically a digester for 250 cows costs about a million dollars of which almost a quarter is the cost of the engineering. The only calculations required are the size which is based on the number of animals. My product line currently has nine sizes to handle between 20-250 cows. Just put four of the largest sized digesters together to service 1000 cows.
In this country most digesters are simple troughs in the ground lined with concrete and covered with a plastic cover. Heat is lost to the ground and air. To build any digester anywhere in the world without insulating it is to ignore the needs of the bacteria doing the work.
That’s very cool, Bruce; I has forgotten you were so involved in this professionally. I’ll recommend you to people I come across looking for solutions in this space.
Bruce and I went to K-12 together. I recall that I was super-impressed with the speed he learned to read; when we entered first grade he recognized the word “because,” which blew my mind. Perhaps it was this precocity that led to his career in renewable energy. Then again, maybe not. 🙂
We now have REAP funding to help the farmer pay to do an audit to determine need then grants and low interest loans to help finance the project. Tax credits help sweeten the pot for the farmer.
I hope you will forgive me for sounding skeptical, in fact that’s not my intention. It’s just i hear so many schemes, proposed by ardent enthusiasts, that I get a little cynical.
Your project sounds very creative and very interesting.
I realize the term Bio-mass plant, is very wide, covering everything from a large compost heap, to the 140 MW facility operated by Hope Power Partnership !
In my experience, to get the best results every bio-mass plant needs to be different. . There are many factors that govern the viability and environmental aspects of bio-mass reactors, including location, feedstock, climate, maintenance, contamination, type of power generators, etc.
The production of enzymes by bacteria and other microorganisms, are not always automatic, or reliable. All sorts of things can affect production. Animal antibiotics, intestinal infections, incompatibility of other bio-mass feedstock, imbalance of chemical reactions, etc.
Operating a bio-mass plant, even a small one, isn’t as easy as it looks. For American farmers, the are a myriad of different regulations, form county to county, state to state.
Then there’s the technology required to convert the feedstock into a fuel that can be used to produce electricity, while still allowing for side products such a fertilizer etc.
Bio-mass reactors produce carbon monoxide, hydrogen, and methane. (producer gas ). Bio-mass converts to electrical energy via electrochemical oxidation. Usually through the utilization of direct carbon or ethanol fuel cells. (There’s even a microbial fuel cell.)
Alternatively, fuel cell system containing a reformer and be used.
Other interesting projects include the Bill & Melinda Gates Foundation sponsored, Omni Processor. Designed to produce potable water and electricity the fecal sludge of developing nations.
Craig’s example was for utilizing the easily collected fecal matter from animals in a concentrated location.
Intensive or factory animal farming, is under considerable political attack, on ethical, health and environmental grounds.
In the US your bio-mass plant must be able to efficiently adapt to more than one type of feedstock . Cow excreta can be very labour intensive to collect outside of a Factory farm situation. (It’s also undesirable, as cows help fertilize pastures, and distribute seeds. )
Pig (or hog) farm feedstock, is probably more viable in the US since more pigs are factory farmed.. But pig excrement must be dealt with very carefully.
All that, notwithstanding, good luck with your project, I shall eagerly await the finished product !
I’m connected with a fabulous grant writer in this space, if you ever need to speak with a person in that capacity.