With milk prices so low and margins under pressure, dairy companies across Europe are looking at ways to cut costs and carbon emissions. One option is to turn creamery process residues into green energy and technology to do so is becoming ever more sophisticated. Richard Gueterbock of British on-site anaerobic digestion specialists Clearfleau assesses this option and the impact of their latest dairy project, on First Milk’s cheese creamery at Aspatria in Cumbria.

On-site digestion of residues

Food and beverage manufacturers, including companies in the dairy processing sector, are starting to realise that their production residues are a potential source of energy, rather than just an ever-increasing expense. Growing recognition of the potential benefits of the circular economy has highlighted the scope for on-site energy generation on manufacturing sites.

For companies in the food and beverage industry that are keen to evaluate how to generate renewable energy on their sites, one option is anaerobic digestion (AD), which is able to convert residues into energy for use in the factory and can offer an attractive investment return.

First Milk’s cheese creamery in the scenic Lake District is commissioning a new on-site digestion plant built by Clearfleau. This site produces cheese under the strategic partnership with Adams Foods (owned by dairy companies and farmers and part of the Irish Dairy Board). When fully on stream, the bio-energy plant will reduce annual fossil fuel energy consumption by 25%.

Lake District Biogas partnership

The on-site AD plant at Lake District Biogas treats trade effluent and whey permeate. When fully operational, the plant will generate 1,000m3/ day of biogas, 80% of which will be upgraded for injection to the national gas grid, from where some of the gas will power the site’s boilers. Some biogas will be used in combined heat and power (CHP) engine to supply power to the site.

The project cost in the region of €9m (including the gas upgrade system), but this was funded by a third party. This meant that First Milk did not have to finance the plant.

Lake District Biogas (www.lakedistrictbiogas.com) was set up to manage the project with external funding, to allow First Milk to concentrate on core milk processing activity. Clearfleau was asked to design, build and operate the bio-energy plant because of its track record in on-site digestion.

On-site digestion will reduce annual energy costs by 25% and remove 7,000t of carbon per annum from the supply chain. Cleansed water is discharged to the River Ellen (after removal of phosphates and greatly reducing bio-oxygen demand).

The plant provides economic benefits to the creamery and its farmer owners, also helping secure over 100 local jobs in rural Cumbria, while eliminating frequent truck journeys and fuel costs, as the whey permeate is used on-site.

The gas fed into the gas grid gets about 6.5p per kW under the RHI, along with an additional payment of about 1.5p per kW for the gas – so net revenue for the gas is 8p per kW. With annual revenue of £3m per annum, the payback on the project is about five years.

The Lake District Biogas funding partnership offers an example to other dairy companies that wish to deploy on-site renewables with external finance. Converting biodegradable residues into energy should be evaluated while there are still incentives available to support the project.

Adding value to process residues

The largest on-site AD plant in the dairy processing sector in Europe, run by Lake District Biogas, is not the only gas to grid plant that is installed on a UK cheese processing site. Wyke Farms (in Somerset) also has a plant injecting gas to the grid.

Using the same gas upgrade technology, a conventional farm digestion system also treats livestock slurry and purpose-grown crops, using German technology.

However, the Aspatria plant is the first one in Europe to feed gas into the grid based only on treating residues from cheesemaking without other non-factory feedstocks.

The on-site digestion system is able to supply 25% of the energy needs of the Lake District site, based entirely on treating its effluent and whey permeate. There are only three outputs from this facility, biogas sufficient to heat over 1,000 households, bio-solids that can be land-applied as a soil improver and clean water that is discharged to the nearby river, with approval from the environment agency, following remedial work undertaken prior to building the AD plant.

While the on-site industrial digestion market is developing in the UK, it has not really taken off in Ireland, although deployment of on-site renewables will help boost the competitiveness of the Irish food sector, which is driving the country’s economic recovery. However, converting residues into renewable energy needs Government support to stimulate initial investment.

Incentives are intended to support early adopters. In the longer term, on-site digestion should be viable without incentives, due to potential cost savings.

In Britain, financial benefits include index-linked, incentive (FIT and RHI) payments, which, once secured, last for 20 years. Although incentive rates are being reduced, they are available for the next four years. Meanwhile, in Northern Ireland, the generous NI ROC scheme will end in April 2017 and will not be replaced.

Opportunities in Ireland

There is currently no support available from the Irish Government for on-site AD in the agri-food sector. This could change if the development of decentralised energy was given greater priority by the new Irish Government.

Elsewhere across Europe, there has been significant development of AD plants on farms, but limited deployment on food factories, despite the ability to reduce a site’s carbon footprint and add value to its process residues.

However, expectations are changing. Following the recent Paris climate change summit, CEOs of leading global food companies, including Unilever and Nestlé, stated: “We want the facilities where we make our products to be powered by renewable energy with nothing going to waste.”

Proven benefits from deployment of on-site digestion in the dairy processing sector include reduced energy costs, lower effluent treatment costs and cutting off-site disposal costs.

For byproducts like whey or fatty process residues, the revenue from AD can outweigh the return from other markets. Dairy processors can generate value from their residues with a better return on the investment required than for other more conventional treatment and disposal options.

On-site digestion is proving to be a useful way of adding value to process residues. Is the Irish agri-food sector missing an opportunity to reduce costs, become more sustainable and limit its environmental impact?

On-site bio-energy production from process residues should be part of the innovative Origin Green programme, which is helping Irish food producers demonstrate to international customers the progress being made to ensure greater supply chain sustainability.

To read the full Renewables Focus, click here.