Project Steps
The following seven steps should be followed if you are looking to build an anaerobic digestion system in BC. These steps may be realised in sequence or in parallel:
1. Secure feedstock
One of the most challenging steps of project development, the quantity and quality of feedstock must be established and secured early in the project:
- Feedstock quantity: the quantity of feedstock should be constant throughout the life of the anaerobic digestion project as these systems are optimized for a given flow rate and cannot take too much variation without decline in efficiency or problematic operation.
- Feedstock quality: while the quality of manure is relatively constant, the quality of off-farm feedstocks can fluctuate greatly. The greater the fluctuation in feedstock quality, the greater the risk of decreased efficiency or problematic operation. Great care must also be taken to minimize contaminants (plastic, metal, chemical, antibiotics, etc.)
- Gate fees: Off-farm feedstocks are accepted for a gate or tipping fee. These fees often determines the price at which the biogas energy can be sold. It is therefore paramount to secure long-term contractual agreements with waste suppliers. Contract terms should be in synchronization with the energy contracts (e.g., anaerobic digestion projects with a 10-year energy contracts should sign 10-year feedstock contracts).
2. Select applicable technologies
Anaerobic digestion systems are designed around available feedstock and not the other way around. It is therefore important to know feedstock quantity and composition to ensure the proper
technology is selected. Furthermore, anaerobic digestion system vendors should be able to demonstrate experience with comparable projects, provide local service and maintenance resources, and guarantee the quality of their equipment to meet projected system efficiency.
3. Acquire permits
Once the technology is selected, technical information on sizing, layout, emission calculations, etc. are required to begin the permitting process. Anaerobic digestion systems will typically require building and siting permits from the municipality, solid waste and air emission approvals from the Ministry of Environment, and zoning amendments from the Agricultural Land Commission. Amendments to the Regional District’s Solid Waste Management Plan may also be required.
It is strongly advised to begin the permitting process as early as possible.
4. Secure energy contracts
BC Hydro will not issue an energy contract until essential permitting is achieved. Furthermore, you should only enter into a long-term energy contract once gate fees and biogas output have been negotiated and calculated. Entering into an energy contract without a proper and accurate business plan is very risky.
5. Secure affordable financing
Once a long-term energy contract in secured, project financing can be secured. To avoid high costs and unnecessary delays, this financing should be from a financial institution experienced in project financing (as inexperienced financial institution will likely demand a higher level of equity in the
project and will charge higher rates). Once the anaerobic digestion system demonstrates a viable cash flow, the financing should be repackaged for a more favourable rate.
6. Project implementation
With financing in place, construction can begin. Experience has shown that permitting, energy contract negotiations and financing can take 12 – 18 months to complete. A well-planned and managed construction schedule should take approximately 3 months to complete.
7. Commissioning
Once construction is completed, the anaerobic digestion system is started and any unforeseen design or implementation mistakes are corrected. Anaerobic digestion manufacturers typically guarantee certain biogas production for the first year of operations, after which they are released from their obligations.
