From Waste to Watts

Storms Farm leads the way for other farmers to create energy from hog waste while helping North Carolina meet its renewable energy quota
Diane Mettler
September 30, 2014
By Diane Mettler

When waste is scraped, from any of Storms Farms swine barns, it goes through a transverse sewer line and runs into an underground storage tank [one of 12]. A vacuum truck comes once a day and empties it. With the waste handled underground, odor is all but eliminated.

Whether it’s raising hogs and chickens or crop farming, Billy Storms excels.

The North Carolina farmer is one of the largest contract growers for Murphy Brown — possibly one of the largest in the entire country. The fifth-generation farmer raises approximately 28,000 hogs on his farm at one time. Storms continually looks for a better way to do things, so it’s no surprise that in 2009 he was researching digesters to turn his hog waste into energy.

“I have a grandson who would like to continue farming and I feel we have to protect the soil for the next generation,” says Storms. “The soil is the most important thing to a farmer. And I wanted to be able to do something different with our nutrients besides going to a lagoon and pumping them to the same field, building up phosphorous levels in the soil.”

It should have been a straightforward project. No one could have predicted the rocky road ahead.

Partnering up
At the same time Storms was checking out operations using DVO, Inc.’s patented anaerobic digester technology in Wisconsin and Missouri, Dr. Garth Boyd, currently senior partner of The Prasino Group, was starting up a new company called AgPower Partners LLC with a couple of colleagues. The company was focused on turning pig manure into energy.

“To kick off the company, we sought out several hog farmers that had expressed an interest in working with us to cover existing hog lagoons with a HDPE (high density polyethylene cover) to capture methane,” says Dr. Boyd. One of those farms was Storms’.

In 2010, AgPower applied for grant money through the Green Business Fund, part of the American Reinvestment and Recovery Act (ARRA) and was awarded grants for four different projects. The economics of covering lagoons needed further evaluation, but Storms’ idea for an anaerobic digester still held promise.

We were looking for a client that was looking to go ‘whole hog,’ if you will, trying to create electricity year round,” explains Dr. Boyd. “As a part of that project, we scoped out all the commercially available digester technology providers and DVO came out clearly ahead.”

In 2011, Jeff Smerko, joined the AgPower team, valued for his financial prowess and tax credits knowledge — and, it turns out, unparalled tenacity.

Stopped before it started
The grant was both a blessing and a curse. It got the project up and running, but the compliance requirement ultimately consumed a great deal of time and resources. And that was just the start.  

“Most people would have thrown up their hands and walked away,” says Dr. Boyd, “Jeff’s unique skill set and personality is the reason that this project turned into a success. Between the grant, putting together the commercial loan package, the extraordinary caution after the recession and the banking failures, the unfamiliarity Farm Credit had with digesters, and the previous overall failure rate of digesters on U.S. farms, it made requirement and contractual issues unbelievable. And this was with a customer [Storms] in extremely good standing with extremely good credit.”

Political problems
The project had another obstacle — a changing political environment.

Director of policy development & communications for the North Carolina Pork Council, Angie Whitener Maier, describes the scenario where she and Jeff worked to keep energy North Carolina energy incentives alive.

“In 2007, North Carolina passed a renewable energy portfolio standard which requires electric providers to purchase a specific amount of energy from renewable sources, and of that, a certain percentage must be derived from swine waste. We’re the only state in the country that has a renewable energy law with a dedicated carve out for swine waste.”

In 2013, the law was targeted for repeal by state legislators and the pork council found itself working with the environmental community to keep the incentives intact. Next year will probably be the same battle and that’s why Storms’ project is so significant, says Maier.

“Last year, when we were trying to lobby against [the proposal to eliminate the incentive], what we heard was: ‘Nothing is happening, so why should we keep this law in place if it’s not doing anything?’ Now, we’ll be able to hold up the Storms’ farm as an example. Just because progress is slow doesn’t mean it’s not progress. And there’s nothing wrong with taking your time to make sure it’s right.

“And the Storms’ farm is significant because of the model that it represents,” Maier adds. “Because of the size of their operation, he was able to make all the financing work and make all the pieces fall into place, which is crucial for the swine industry’s credibility in its commitment to this. Now we’ve got a farmer who has a lot of skin in the game — a lot.”

In addition, the Storms’ project may also lead to future expansion of hog farming. In North Carolina, a farmer can’t build a new farm or expand unless the waste treatment technology meets five very strict performance standards.

Storms’ DVO digester system handles four of the five standards, and with a full-scale pilot soon to take place, involving a nitrogen removal unit developed by DVO, Andgar and Washington State University, it intends to meet all the standards.

If successful, and there is no evidence that it won’t be, it may allow some hogs farm in North Carolina to finally expand.

Putting it into action
The multi-million dollar system is unique because as Doug VanOrnum, with DVO, explains: “Every site presents unique challenges. There is no “cookie-cutter” solution. We integrate our system into the farm — not try to change how the farm does its farming.

“Hog waste is typically very diluted,” adds VanOrnum. “To ensure an efficient treatment process, one of the challenges is to optimize the amount of water that the farm is using, or at least the water that the digester will see.”

One of the solutions was to change over the 23 barns from a flush system to a scraper system, and it was done in conjunction with the installation of DVO’s digester and the genset provided by Marcus Martin of Martin Machinery.  

Between Smerko and the Storms Farm team, they designed and installed a cable driven mechanical system that scrapes out the manure. It’s far more effective and eliminated the big water concerns. They took the pipes that were extended 50’ from the back of the barn into the lagoon and intercepted them with a perpendicular sewer line. Now, when the waste is scraped, it goes through that pipe, drops into a transverse sewer line and then runs into an underground storage tank [one of 12] where a vacuum truck comes once a day and empties it. And with the waste handled underground, odor is all but eliminated.

Storms says it took some work, but they were able to do part of the flush to scrape transition while the hogs were in the barn and the rest during the 3 to 4 days the hogs were being switched out. Now the barns are scraped seven times a day. Because of the distance between the barns to the digester, Storms uses tanker trucks to transport the waste to the digester.

The digester is 16 feet deep and about half the length of a football field, encased with an earthen berm. Daily, about 50,000 gallons are fed into the 1.2 million gallon digester. It takes 21 days to process. And, with an add-on technology to the digester, upwards of 90 percent of the phosphorous from the liquid slurry can be removed as well.

“If your acreage is phosphorous limited, hypothetically, if you took out 90 percent of the phosphorous from that liquid slurry, you could irrigate more slurry per-acre,” says VanOrnum.

Return on investment
Typically, VanOrnum says a project like this is successful if there’s a return on investment in three to seven years. There are a number of reasons Storms will probably see a return sooner than later. First, he’s selling the electricity. Second, he’s getting a tipping fee for waste he’s bringing in from a processing plant to feed the digester. Third, Jeff is selling carbon credits using the California protocol, and, lastly, was able to monetize the tax benefits to cover about half the cost of the system.

“Finding a tax credit investor for the project was a big obstacle to overcome because, whereas there’s a lot of appetite for tax equity in other technologies like solar or the wind, finding investors for making electricity out of manure is a whole different deal,” says Smerko. “But now I think it sets the stage to be able to repeat it.”

VanOrnum believes some incentives are helpful to farmers, because otherwise we’re asking farmers to pay for a system that provides benefits that reach farther than their own farming operation.

“The system eliminates odors and kills pathogens such as e-coli and salmonella. Renewable energy is produced, harmful greenhouse gas emissions are reduced, and the system provides nutrient management options. Most of the storage lagoons aren’t being used any more because of this system. Because BOD and COD are reduced, even the pollution potential of the hog waste itself has been greatly reduced. Some of these do not necessarily directly benefit the farmers as much the community around the farms.”

Worth the challenges
The system is a true success. More than 130 people came to the ribbon cutting. Many have come to see the system since, some from as far away as Africa.

Storms says for anyone considering a project like this: “Have plenty of time to do it and hire yourself a good developer if you don’t have experience in doing this sort of thing. I can say that I think I had some of the best people in the state helping me with this. That’s why it’s been so successful.”

Smerko says the Storms have become like a second family to him and this was no ordinary development project.

“We blazed a trail that now can be followed.”

 

The Team Behind the Project

  • Project Developer, AgPower Partners LLC
  • Anaerobic Digestion Technology Provider, DVO, Inc.
  • Engine/Generator Provider, Martin Machinery, Inc./Gentec, LLC
  • Biogas Conditioning Provider, Energy Cube, LLC
  • Project Engineer, Withers & Ravenel, Inc.
  • Transaction Structuring /Tax Credit Advisor, CohnReznick LLP
  • Offtaker Utility, NCEMC
  • Construction Management, Barnhill Contracting Company

 

 

 

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