We help build manure digesters on farms whose baseline practice is to store their manure in storage ponds, where it is kept pending bi-annual or tri-annual spreading on the fields. In these storage ponds, all but the very surface of the manure has no access to oxygen, so bacteria that thrive without oxygen decompose the manure, giving off gases including methane (CH4) as a byproduct, which bubble up and enter the atmosphere. There, methane has 21 times the global warming impact of carbon dioxide. Each 95' pounds of methane can be expressed as one ton of CO₂-equivalent, or CO₂e.

The farms we work with install anaerobic digester systems in place of the storage ponds. These are heated, airtight systems that accelerate the decomposition and capture the methane, which the farms then burn to generate electricity and useful heat. The digested manure is then pumped from the digester to pre-spread storage lagoons, with virtually no future methane off-gassing. As the CO₂ emissions from burning the methane for electricity and heat are equivalent to the CO₂ that would have been emitted if the manure was put directly onto the fields, the electricity and thermal energy are considered CO₂-neutral. As a result, the farms create three sources of CO₂ or CO₂ reductions:

• Reductions from the displacement of electricity from fossil fuels that results from the farms' generation of electricity and delivery of that electricity to the grid ("Electricity-Based CO₂ Reductions");
• Reductions from the displacement of the farms' use of fossil fuels for heating and cooling needs that results from the farms' capture and use of heat given off by the generators ("Avoided Fossil Fuel CO₂ Reductions"); and
• Reductions from the avoidance, or abatement, of fugitive methane emissions that would have resulted from the farms' continued pond storage of manure that would have occurred in the absence of the digester ("Methane Abatement CO₂e Reductions")

Electricity-Based CO₂ Reductions

REC Generation

We start with the project's nominal capacity factor based on the project engineer's best estimates of gross generation (e.g., theoretical performance based on expected methane generation), and apply all discounts recommended by project engineer to account for scheduled and expected unscheduled downtime (maintenance and repair) and related losses or similar efficiency degradation or losses to arrive at the baseline capacity factor. We require this baseline capacity factor to be consistent with the project pro forma assumptions utilized for the project financing. We then discount the baseline capacity factor by 5% to insure against any further underproduction risk. Our final REC generation estimate is determined in accordance with the following formula:

NGC x 8760 hours/year x DCF x POL

where:
NGC = the project's nameplate generating capacity
DCF = the final discounted capacity factor
POL = the project's assumed operating life, which is the shorter of 25 years or the expected equipment operating life, assuming commercially reasonable maintenance, repair and parts replacement for wear and tear.

CO₂ Avoidance

We start with the average fossil CO₂ emissions rate for the applicable power control area based on most recent EGRID data. We then improve the PCA Emissions Rate by 0.8% of the original amount per year over the project's assumed operating life. Beginning with the year in which the then-current EIA Annual Energy Outlook shows planned or unplanned capacity increases of fossil generating capacity in the applicable NERC region, average the annual improving average fossil rate (which represents the emissions rate for the energy the project will displace) with the emissions rate for the first planned or unplanned fossil generating capacity (which represents the emissions rate of marginal generating units whose generating capacity may theoretically be displaced by the project) to derive our assumed long-term average emissions rate. We then multiply this levelized average emissions rate by the assumed REC generation to determine the expected CO₂ reductions the project's electricity will produce over its assumed operating life, and allocate appropriate shares of its generating capacity to each customer. (Note ' although the project emits CO₂ when it burns the methane, that CO₂ amount is equivalent to the assumed baseline of field-spreading the manure, so the electricity is assumed to be CO₂-neutral).

Avoided Fossil Fuel CO₂ Reductions

Thermal Energy Generation

For those farm methane projects that utilize waste heat from the electricity generator to reduce their consumption of fossil fuels, we start with the project engineer's best estimates of the BTU's of recoverable and usable thermal energy and apply all discounts recommended by project engineer to account for scheduled and expected unscheduled downtime (maintenance and repair) and related losses or similar efficiency degradation or losses to arrive at the baseline usable thermal energy capacity. We require this baseline thermal energy capacity to be consistent with the project pro forma assumptions utilized for the project financing. We then discount the baseline thermal energy capacity by 5% to insure against any further underproduction risk.

CO₂ Avoidance

We assume a BTU-for-BTU displacement of the kind of fossil fuel (diesel, propane, etc., based on historic purchase records) that will be displaced by the project's thermal energy output, over the project's assumed operating life, and quantify the CO₂ avoidance based on the emissions profile (Lbs. CO₂/btu) of the displaced fuel.

Methane Abatement CO₂e Reductions

The EPA has developed a methodology listed in U.S. Methane Emissions 1990-2020: Inventories, Projections, and Opportunities for Reductions (EPA 430-R-99-013) (September 1999) for calculating baseline methane emissions from various manure management systems based on factors presented in the 1996 Revised Intergovernmental Panel on Climate Change (IPCC) Guidelines.

Three principle factors are needed to calculate baseline methane emissions from manure management systems: Quantity of Manure Volatile Solids; Manure Characteristics; and Manure Management System used. IPCC Tier II standards require these factors to be specific to country location and animal type and class. The EPA utilizes USDA data and conversion factors from the Natural Resources Conservation Service (NRCS) and provides criteria by state. The resulting equation in the EPA methodology is:

CH4 = Manureij * MFijk * VSij * Boj * MCFijk, where:

CH4 = Methane created at baseline
Manureij = total manure produced by animal type j in state i
MFijk = % of manure managed by system k for animal type j in state i
VSij = % of manure that is volatile solids for animal type j in state i
Boj = Maximum methane (CH4) potential of manure for animal type j
MCFik = Methane conversion factor for systems k in state i

We apply the following formula based on information provided by the farms regarding their baseline number of cows, cow types (milkers, heifers, dry cows), feeding practices and manure handling practices, which we confirm through one or more site visits. An example for calculating methane emissions from a liquid/slurry storage system (k) for manure from 500 dairy milking cows (j) in Pennsylvania (i) might look like:

CH4 = (80lbs manure /1000# animal weight *500 cows@1400lbs/cow ) *.4536 kg/lb * 100% in system * .1062 (%VS) * 0.24 m3 CH4/kg (Bo) * 0.35 (MCF of liquid/slurry system)

= 226.60 m3 CH4/day = 82,710 m3 CH4/yr = 181,960 m3 CH4*1.4956 lbs/m3 = 123,701 lbs CH4/yr

=123,701 lbs CH4 * 21 GHG factor? = 2,597,722 Lbs CO₂e

= 1298.86 tons CO₂e per year

Note: The Bo factor of 0.24 m3CH4 and the MCF of .35 are IPCC Tier 2-developed factors that recognize the existing animal diets for North American livestock and the temperate climate zone of Pennsylvania respectively.

NativeEnergy's methodology refines this base equation by including the average monthly ambient temperature effect, by county location, on the speed of manure decomposition in the lagoon using the van't Hoff-Arrhenius equation from the EPA's 2003 Annex M to calculate the effective MCF:

f = exp[E*(T2-T1)/(R*T1*T2)]
where:

f Conversion efficiency of Vs to CH4 per month.
E Activation energy constant (15,175 cal/mol).
T2 Ambient temperature (Kelvin) for the climate, by county (NOAA data).
T1 303.16 (273.16' + 30') in example of 30' C ambient
R Ideal gas constant (1.987 cal/ K mol).

Using farm-specific data, we also reflect the tempering effect on fugitive methane production of the daily loading of raw manure into the lagoon and the semi-annual or scheduled unloading for field spreading.

Once we have determined the expected annual CO₂e reductions pursuant to the foregoing, we then apply the following discounts:

• a non-cumulative 5% discount to each year's assumed volume to account for potential methane leakage from the digester
• a cumulative annual 5% discount to the 20-year stream of reductions to account for the potential mainstreaming of the technology