Outline Feasibility of Centralised Anaerobic Digestion Plants linked to Dairy Supply Chain

Abstract:

<p>This document is a report for the project titled 'Outline Feasibility of Centralised Anaerobic Digestion Plants linked to Dairy Supply Chain'.</p> <p>Dairy UK and AEA Energy & Environment have undertaken a high level assessment of the feasibility of centralised anaerobic digestion (CAD) in the dairy processing sector. This was based on the identification of 10 potential sites that could host centralised anaerobic digestion plants. The work comprised technical, economic and environmental assessments.</p> <p>This work has confirmed our previous findings that centralised anaerobic digestion plants, based at or close to industrial dairy sites, have the potential to be economically attractive, as several positive factors would combine in their favour, with payback periods as low as 3 years. This is because they can be designed to co-treat organic wastes from industrial dairy sites along with animal wastes from nearby livestock farms and other food manufacturing wastes. As the cost of landfilling will continue to rise due to the Landfill tax, producers of industrial food waste will increasingly need outlets such as AD plants. Inclusion of these will help to increase the viability of the CAD by providing a diverse feedstock and by providing an additional income stream to the plant operator.</p> <p>The successful exploitation of CAD depends on gaining the full economic benefit of the outputs combined with full exploitation of ancillary benefits. Generation and utilisation of biogas is one of the key benefits of adopting anaerobic digestion process for treating biodegradable wastes. The Government already provides incentives that contribute to improving the economics of biogas utilisation, through the Renewable Obligation, Climate Change Levy (CCL) exemption and Enhanced Capital Allowance. There is potential for additional energy income from the sale of heat generated from the combined heat and power (CHP) scheme, but this would depend on the development of infrastructure to deliver the heat to where it is needed within a few hundred meters. Assessment of land use around the 10 identified potential CAD sites showed that there would be sufficient area to return digestate to land within a 7.5 km radius.</p> <p>The CAD schemes can provide the industrial dairies with several environmental benefits that will also help them to consolidate or secure new market outlets. For instance, a significant proportion of their carbon footprint could be reduced -which will help those dairies to link up favourably with C-labelling schemes which are being planned by retail chains and the Carbon Trust.</p> This report contains and executive summary, and is divided into the following sections: <ol> <li>Introduction</li> <li>Assessment of CAD plants</li> <li>Potential CAD schemes</li> <li>CAD scheme development</li> <li>Conclusions and recommendations</li> </ol> <ul> <li>Appendix 1 - Questionnaire - Confidential</li> <li>Appendix 2 - Techno-economic assumptions</li> </ul>

Author(s):

AEA Energy & Environment