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Bute Biogas Feasibility Summary - Bute Biogas - Background

By Lisa Stewart,2014-05-17 12:00
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Fyne Homes commissioned Econsult in 2004 to produce initial Feasibility Report which indicated potential viability of a large scale biogas plant for the

Bute Biogas Feasibility Summary:

Outline Issues

    Pollution from slurry run off on Bute recognised as a major issue.

    Community groups looking for income generating opportunities via community energy. Farmers looking for alternative income streams.

    Fyne Homes commissioned Econsult in 2004 to produce initial Feasibility Report which indicated potential viability of a large scale biogas plant for the island of Bute.

Formation of Bute Biogas Working Group

    Following the Enconsult Report, Fyne Homes pulled together a working group to explore the potential for Biogas on Bute further.

Representatives on Bute Biogas Working Group from:

    Fyne Homes

    Bute Farmers

    Argyll and Bute Agriculture Forum

    HICEC / Community Energy Scotland

    SEPA

    Local Community Representatives

    Social Enterprise

    Scottish Executive

Key aims of the Biogas Working Group

    To identify solution to pollution issues around Etrick Bay from cattle slurry run off To generate sustainable income for community benefit

    To generate alternative income streams and sustainable fertilizer for farming community

Information Gathering

    Fyne Homes secured funding to undertake transnational feasibility project with funding support from WHELK Leader Plus, Communities Scotland and HICEC. Initial transnational partnership with Kilkenny in Ireland established to link their experience in community biogas project and experience from Argyll in relation to community Biomas systems.

    The scale of plant in Kilkenny was limited to be a useful comparator for the potential on Bute. However Kilkenny had worked with a proven biogas installer called Biogas Nord who are based in Germany. The working groups next action was to visit a number of facilities operated by Biogas Nord in Germany that were thought to be more suitable for the Bute situation. These included:

    ? 700 Kilowat plant - Farm Scale Plant operating on pig slurry, vegetable waste

    and glycerine supplying power to the grid and heat to a local hotel

    ? 2 units- 150kw / 200kw, 300 cow organic Dairy Unit running on cattle slurry, farm

    manure, maize and grass silage and grain feedstock, selling power to the grid

    and heat to a local nursing home.

Key Actions arising from information gathering

    Legal requirements for applying digestate material back to land were considered by a working group with SEPA.

Potential energy yield from silage and slurry on Bute was undertaken with samples of

    from a number of farms on Bute analysed by Biogas Nord.

    The quality, quantity and access to potential slurry and silage feedstock on Bute was

    researched by Scottish Agricultural College.

The working group recognised that a complex set of data would need detailed analysis

    to determine the feasibility of a plant or plants on Bute.

Options appraisal and business case

    The summary of the brief for the options appraisal, technical and the business case is as

    follows:

1. Options Appraisal - To pull together information on Feedstock, Access, Storage,

    and Logistics (Brief supplied) along with information on potential site/sites, customers for

    Heat and Energy and indicative costs for design and build to enable us to make

    decisions on the viability of taking this project forward. In order to give us a list of

    options and indication of the preferred option, the following elements will need to be

    considered:

    ? Available feedstock, feedstock analysis, Access, Storage, associated costs and

    legislative requirements.

    ? Logistics Analysis and associated costs for transport of feedstocks and digestate.

    ? Site/sites analysis (ie one plant or two plants and how close to heat sales - taking

    on board the logistics analysis).

    ? Labour requirements for maintenance, operation and transportation.

    ? Design concept.

    ? Energy income, ROC’s, Heat Sales, potential for fuel cell and potential grant

    sources.

    ? Indicative costs for design,\ build and ongoing costs (taking on board the remote

    island location of Bute).

2. Full Technical Analysis:

    Which would take the project forward in more detail once the best option has been

    identified and initial viability has been confirmed this would include:

    ? Environmental evaluation including legislative restrictions.

    ? Planning support and requirements along with indicative costs for taking the

    project through the planning process.

    ? Investment Plan, outlining potential grant and loan funders, returns and payback

    terms.

    ? Grid connection survey.

    ? Detailed costings (anticipated to be within 10% +/-).

    ? Community consultation, to determine support for the project and establish a

    community agreed plan of how the profits from the plant will be distributed.

3. Detailed Business Plan.

    This will pull together all the elements of the feasibility stages to a single document,

    taking the project to a level which will enable potential investors to recognize the benefits

    from investing in the project, showing its sustainability and wider community benefits.

    This should show how the business will operate financially over the lifetime of loans and beyond with detailed:

    ? Financial projections, including cash flow analysis.

    ? Project structure and management arrangements.

    ? Stability in the supply of feedstock.

    ? Stability and supply of energy and heat.

    ? Risk assessment and sensitivity analysis.

    ? Community Investment Plan.

Findings

    SLR consulting carried out the options appraisal. Key findings were:

    On the basis of the options appraisal, SLR highlighted that the biogas project demonstrates only marginal viability but should be to be taken forward to detailed feasibility to investigate further the options and sensitivities that could make the project viable, while also considering the wider project benefits arising.

    Further analysis was carried out by Glasgow Caledonian which also indicated that additional foodwaste feedstock would not improve the viability of a plant.

Conclusions

    The working group decided that the marginal viability did not justify beyond the initial options appraisal to a technical analysis and full business case. Key issues for the viability of a Biogas Plant on Bute include:

    Low energy value of slurry feedstock

    Volume of dirty water collected with farm slurry

    Fluctuating value of agricultural feedstocks

    Lack of suitable feedstocks on Bute that would generate a gate fee

    Transport logistics

    Potential location options and the distance to potential heat users

    Difficulty quantifying economic and environmental benefits of reducing pollution from slurry run off.

    Potential for future activity would be to explore single farm small scale plant.

Available Reports:

    Enconsult Initial Feasibility Study

    SLR Options Appraisal Report

    Glasgow Caledonian additional feasibility in to food waste

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