Converting Poultry Litter into Energy in the United States - By The Foundation for Organic Resources Management, Inc. - This paper reviews the current status of litter-to-energy activities in the United States from both on-farm and off-farm (centralized) perspectives, and identifies key issues and factors affecting design and deployment of litter-to-energy systems in the U.S.

Abstract

Poultry litter – the mixture of cellulosic bedding material and manure generated in broiler and turkey production houses – can be converted into thermal and/or electrical energy or even into liquid fuel.

There is increasing interest in litter-to-energy options because there are increasing pressures on poultry producers to embrace alternative management practices for surplus litter (due to environmental concerns associated with traditional land application of the litter).

On-farm options

Fuel for space heating is typically the single greatest operating expense for broiler and turkey producers in the United States. It is estimated that at least 75% of the approximately 65,000 broiler and turkey production houses in the United States use propane, with essentially all of the remainder using natural gas. At consumption levels of 4,000~6,000 gallons of propane per house per year and propane prices of $0.65~0.90 per gallon, total fuel expenses for a four-house broiler farm can range from about $10,000 to over $20,000 per year.

At the same time there are increasing pressures on poultry producers to embrace alternative management practices for surplus litter (due to environmental concerns associated with traditional land application of the litter). Although there are many factors affecting the amount of litter produced at each poultry farm, the amount of litter deemed to be “surplus” (i.e., that amount that cannot be land-applied on or near the farm) can be in the range of fifty percent in many of the areas of concentrated poultry production in the U.S.ⁱⁱ Thus, on average, alternatives are needed for managing approximately 65 tons of litter generated each year at a typical broiler production facility located in such an area.

One option is to convert the litter into thermal energy and use the heat for space heating, thereby displacing some of the fossil fuel otherwise consumed at the site. Depending on numerous factors such as the nature of the bedding material used, the number of flocks produced on the bedding prior to clean-out, and the moisture content of the litter, the as is energy content of the litter ranges from about 3800 to 5000 Btu per pound. Assuming an average of 4600 Btu per pound and a conversion system efficiency of 70%, the 65 tons of surplus litter could provide about 86% of the thermal energy needed for a typical broiler house. Assuming a net economic value to the grower of $3.00 per ton of litter and an average propane cost of $0.75 per gallon, a farmer’s net savings from use of surplus litter as fuel would be about $3,700 per year per house.ⁱⁱⁱ

Recognizing these potential economic benefits as well as the potential benefits associated with on-site management of the surplus litter (including reduced regulatory scrutiny and potential liability associated with traditional land application of the surplus litter), numerous efforts have been invested in the past twenty years to develop on-farm litter-fired energy systems for heating poultry houses. Most efforts have used combustion or gasification technologies coupled with air-to-air or water-based heat exchangers for delivery of the heat into the poultry house. Most systems, at least during development stages, have been single house units, although some systems were designed from the onset to heat two or more houses per furnace unit.

But the challenges of developing a viable farm-scale litter-fired furnace system are significant. To date, no such systems have been developed that are commercially available, despite substantial past investments in research and development activities by both the public and private sectors. However, because of increasing regulatory pressures and increasing energy prices, the potential benefits and attractiveness of on-farm litter-to-energy systems are greater than ever; accordingly, several efforts are currently underway to develop and deploy such systems, including:

• A 600,000 Btu/hour two-stage combustion system is currently being developed by External Power LLC and Wood-Mizer Products, Inc. (EP/WM), under a project being coordinated by the Foundation for Organic Resources Management (FORM) with funding support from the U.S. Department of Energy’s Commercialization Ventures Program.^iv The PLC-controlled system reaches 2400°F maximum combustion temperature with a high turn-down ratio (over 10:1), and uses an air-to-air heat exchanger for thermal energy output.
  
  It was initially intended that the system would utilize both litter and low-grade sawdust feedstocks; however, because of significant technical difficulties encountered during litter combustion trials in 2001~2002, EP/WM concluded that separate furnace systems would be required for the two fuels. As a result, the companies are focusing current efforts on sawdustand wood chip-fired systems. As of August 2002, a fourth-generation sawdust and wood chip-fired furnace system is being fabricated, with performance testing and on-farm trial operations scheduled for the 2002~2003 heating season.
  
  EP/WM anticipate having sawdust and wood chip-fired units commercially available in 2004 (the companies have not yet determined when litter-fired systems will be developed and be commercially available). In addition to dedicated thermal output units, EP/WM intends to offer cogeneration options using External Power’s 15kW Stirling engine/generator system for farm-scale electrical production.

• A 500,000 Btu/hour gasification system is currently being developed by Community Power Corporation (CPC), under a project with funding support from the U.S. Department of Energy’s Small Business Innovative Research program, with technical assistance provided by the Foundation for Organic Resources Management (FORM) and others.^v
  
  The litter-fired system will employ a gas production module providing producer gas as fuel for existing commercial propane/natural gas-fired furnaces used in poultry houses and/or as fuel for a 15 kW engine/generator set. CPC’s system will include a gas clean-up component (i.e., for tar reforming, catalytic reduction of ammonia, and particle filtration). A full-scale system will be field tested at the University of Arkansas’ full-scale broiler research facility during the 2003~2004 heating season.

• A 2,000,000 Btu/hour combustion system is currently being developed by Roger Reed, a private entrepreneur in Owensville, Missouri.^vi The litter-fired “non-grate” system has a 20:1 turn-down ratio, is PLC controlled (both fuel and air), has a maximum combustion temperature of 1500°F, and employs an air-to-air heat exchanger. The furnace system will provide heat to two poultry houses.

Based on the conditions encountered at typical poultry farms in the United States, the following criteria must be met for successful deployment of an on-farm litter-to-energy system:

• Technical viability: The system must be technically reliable and sufficiently robust to meet the demanding conditions encountered at a poultry farm (e.g., temperature extremes, high dust levels, and minimal labor available for operation and maintenance). An on-farm litter-fired system includes not only a furnace but fuel storage and handling components, an in-house heat distribution system, and a control system for integration with existing [gas] heating and ventilation systems.

• Economic feasibility: The system must be economically feasible from the poultry producer’s perspective. Although a 5~6 year simple payback may be acceptable to some growers (inclusive of all operating expenses and debt service), lease options [coupled with service contracts] should also be considered by litter-to-energy system vendors. There are also potential opportunities for public sector support (e.g., through the USDA’s Environmental Quality Incentives Program [EQIP]^vii for financial support of on-farm litter storage facilities; also, substantial financial support for deployment of on-farm renewable energy systems was included in the 2002 Farm Bill^viii).

• "Hassle factor:" Even if a system is technically viable and economically feasible, it still must be “user friendly” from a poultry producer’s perspective. Farmers typically are unwilling or unable to use equipment that entails substantial additional effort for operations/maintenance. This is particularly true for on-farm litter-to-energy systems, where the existing competition is very convenient gas-fired energy systems.

Other issues and factors must be considered during design and/or deployment of on-farm litterto- energy systems, such as:

• Ash management: Environmental concerns in areas of concentrated poultry production have increasingly focused on phosphorus contained within the litter…and it is increasingly recognized that addressing such concerns will entail accumulation and subsequent export of the surplus phosphorus. Combustion or gasification of litter provides the most efficient means of managing the litter-derived phosphorus because essentially all of the mineral survives the thermo-chemical conversion process as ash.
  
  The phosphorus-rich ash (approximately twenty percent by weight) has high bulk density, is easily transportable, and has significant market value as a fertilizer ingredient (in the range of $40~$50 per ton, wholesale, aggregated). Thus, deployment of on-farm litter-fired furnaces within an area of concentrated poultry production should also entail on-farm storage and offfarm aggregation and subsequent export of the ash produced by each furnace.

• Emissions and regulatory concerns: Combustion or gasification of litter generates some emissions (chemical and particulate, although all pathogens are eliminated during the thermo-chemical process). Chemical emissions of particular concern include nitrogen and sulfur derivatives. Large-scale litter-to-energy systems in operation in the United Kingdom include effective emissions control subsystems, although use of such equipment may be costprohibitive on farm-scale systems. Nonetheless, farm-scale furnace systems must be designed, tested, and proven to meet any applicable state/federal regulatory requirements regarding air emissions.

• Sales and deployment strategies: Successful sales of furnace systems will require in-depth understanding of the poultry industry and of poultry litter (including the various factors that affect the fuel characteristics of the material). Successful deployment of on-farm furnaces will require considerable after-sales support for both operational and maintenance reasons, as well as ash aggregation and export. One strategy for the latter might be for a vendor to help establish a third party enterprise that would be responsible for ash management and export (and one option for such an enterprise might be the Resource Conservation and Development Council[s] operating in the area of concentrated poultry production).

Although the concept of on-farm litter-to-energy systems is very attractive and use of such systems could address multiple concerns simultaneously, the challenges of successfully designing and deploying on-farm litter-to-energy systems are, as discussed above, substantial, and it unknown as to when (if ever) on-farm systems will be commercially available that are considered technically viable, economic feasible, and consumer-friendly.

OFF-FARM (CENTRALIZED) OPTIONS:

A large-scale, centralized litter-to-energy system represent another approach for addressing environmental concerns associated with traditional management of surplus litter while also generating renewable energy from litter fuel. Key considerations associated with centralized litter-to-energy systems include:

• Energy products that can be made from litter include thermal and/or electrical energy and liquid fuels. Thermal energy is generally the most attractive option, although siting options are limited to locations where litter can be processed adjacent to a large thermal load. Electrical energy provides greater flexibility in that siting options are much less restricted and the electricity can be transported to end-users via existing power lines. Converting poultry litter into liquid fuels (e.g., ethanol, bio-oil) is attractive for numerous reasons, although a recent assessment of litter-to-ethanol options concluded that the characteristics of litter make it much less attractive than other biomass feedstocks and that cellulose-to-ethanol conversion technologies are not yet ready for commercialization.^ix

• Technologies for converting litter into electricity are already proven and at commercial scale, which minimizes the technological risk for such systems. Four large-scale litter-to-electricity processing facilities are already in operation in the U.K., with additional sites under development in the U.S. The U.K. sites include three facilities in England owned and operated by Fibrowatt Ltd.^x (using spreader-stoker and traveling grate boiler designs) and one facility in Scotland owned and operated by Energy Power Resources Ltd.^xi (using a fluidized bed boiler design). Fuel consumption at the four sites range from about 110,000 dry tons of litter per year to over 400,000 dry tons of litter per year, with operating experiences ranging from one to ten years.

• Unlike other litter-derived products (e.g., compost, pellets), long-term product purchase contracts for [litter-derived] electricity can be arranged (for ten-, fifteen-, or even twenty-year periods). Such long-term commitments can greatly reduce the financial risks associated with large-scale litter processing facility.

• All of the phosphorus and most of the other nutrients in the litter survive the conversion process as ash. As noted previously, the nutrient-rich ash co-product has significant market value as a fertilizer ingredient. The material has high bulk density and is readily transportable to distant agricultural markets out of a region of concentrated poultry production (thereby addressing surplus phosphorus concerns in such areas).

Other issues and factors must be considered during design and/or deployment of centralized litter-to-energy systems, such as:

• Litter aggregation: The nature of the poultry industry in the United States makes aggregation of litter particularly challenging (i.e., most of the birds [and litter] are produced at relatively small, privately owned farms operating under contract with large poultry companies).
  
  For example, in the Northwest Arkansas/Southwest Missouri/Northeast Oklahoma region, there are about 2,700 poultry farms^xii generating an average of 480 tons of litter per farm per year.^xiii If each participating farm sends half of its litter to the central facility then a 300,000 ton/year litter-to-energy facility would have supply contracts with over 1,200 idependent farmers. The complexities, logistics, and transactional costs associated with such aggregation require an in-depth knowledge of and a close working relationship with the poultry industry, and can be a “show stopper” for many companies interested in establishing a litter-toenergy operation.
  
  One strategy for aggregating the litter under such circumstances is to establish an enterprise solely for this purpose. As shown in Figure 1, the third-party enterprise could serve as either a broker or a wholesaler, although the latter is preferred from a poultry producer’s perspective as transfer of ownership of the litter could also entail transfer of associated potential liability associated with surplus litter management.^xiv Under current economic conditions a nonprofit organization has been determined to be the most desiable organizational structure for such an enterprise. Such an organization has been referred to as a "Litter Bank."
  
  

  
  
  C.O.C. refers to existing clean-out contractors (typically, small-scale local entrepreneurs). In addition to serving as a broker or wholesaler, a full-service Litter Bank would also coordinate clean-out services and raw litter management within its region of operation. For a litter-to electricity facility, the value-added manufacturer would be the energy facility and the valueadded end-user would be the consumer[s] of the litter-derived electricity.

• Regional coordination: The potential for aggregating litter and using it as a fuel at a central litter-to-energy facility is greatest in areas of concentrated poultry production (refer to Figure 2). Environmental concerns associated with traditional litter management are greatest in such areas (where the poultry industry is motivated to embrace litter management options).
  
  Figure 2: Poultry Manure Production in the Continental United States^xv
  

  
  
  In any such area, aggregation of litter would likely need to be pursued on a regional basis, i.e., focused on specific watersheds of concern and working with all producers in the region (irrespective of which integrator a grower is contracted with for bird production). Again, use of a third-party enterprise can help ensure producer participation throughout the area of concern and also work with public agencies and other interested parties to ensure that the surplus litter is effectively managed (i.e., through aggregation of the litter, conversion into energy, and export of the resulting nutrient-rich ash).

• Ash management: Environmental concerns in areas of concentrated poultry production have increasingly focused on phosphorus contained within the litter...and it is increasingly recognized that addressing such concerns will entail accumulation and subsequent export of the surplus phosphorus. Combustion or gasification of litter provides the most efficient means of managing the litter-derived phosphorus because all of the mineral survives the thermochemical conversion process as ash.

• Economics: Although centralized systems benefit from economies of scale, the estimated capital costs of large-scale litter-to-electricity systems (like other bioenergy system) under current economic conditions is high – perhaps in the range of $2,500 ~ $3,000 per kilowatt of generating capacity. Operating expenses for large-scale litter-to-electricity systems are also projected to be high—a key factor is the net cost of litter fuel delivered to the facility.^xvi Revenues are based on market values of both the electricity and ash co-products.
  
  Where possible, one strategy for addressing economic challenges is to sell the electricity at premium prices through a green power program. Another strategy is to utilize public sector support programs for various components of the litter-to-energy operation. Eventually, current economic conditions associated with the poultry industry are likely to become more favorable—the industry will, sooner or later, have to embrace strategies for recovering operating costs that are now being recognized as required for managing surplus poultry litter.

• Public sector support: There are numerous programs at federal, state, and local levels that could be used to support the deployment of a centralized litter-to-energy facility, such as: EQIP funds to support transport of litter from farms to the facility; the existing federal tax credit for converting litter into electricity (currently about $0.017 per kWh)^xvii; authorization of tax-free bonds for facility financing; State Revolving Funds for some components of the enterprise; grants from public agencies to support the establishment/operations of a Litter Bank.

• Liability transfer: Another key benefit of a centralized litter management enterprise is that such systems fully relieve poultry producers of responsibility [and potential liability] associated with surplus litter management. And an independent third-party enterprise is attractive to poultry companies (“integrators”) in that the companies generally do not want to invest in, own, or operate litter conversion facilities.

In Summary

Using litter as a fuel for space heating on poultry farms represents—at least in theory—an excellent option for reducing operating expenses while also addressing environmental concerns associated with traditional litter management practices (and displacement of fossil fuels). On-farm litter-to-energy systems entail litter (fuel) storage and handling, thermochemical conversion (utilizing combustion or gasification technologies), and distribution of the resulting heat within the production house (plus some systems may offer electrical generation options). To be commercially successful, such systems must be technically viable, economically feasible, and usable and acceptable from the customer’s perspective. Although no such systems are commercially available as of August 2002, several efforts are currently underway to develop such systems. These efforts should recognize and address the key issues and factors that can affect commercial success, including ash management, emissions and applicable regulations, and an in-depth understanding of the unique characteristics of poultry litter and the poultry industry.

Large-scale off-farm litter-to-energy options include thermal and/or electrical energy as well as liquid fuels. Thermal systems are limited by siting constraints while liquid fuel technologies using litter feedstocks are not yet commercially proven, whereas litter-to-electricity systems are already commercially established and can benefit from long-term power purchase contracts. Centralized operations have numerous advantages relative to small, de-centralized (on-farm) systems. Capture and subsequent export of the phosphorus and other minerals within the litterderived ash is an essential component of any litter-to-electricity system in the United States, enabling the facility and the participating poultry industry to effectively address environmental concerns associated with traditional surplus litter management.

Aggregation of the litter feedstocks is one of the greatest challenges, but could be effectively overcome through establishment of a third-party enterprise focused on aggregation activities. A nonprofit “Litter Bank” is the preferred type of enterprise under current economic conditions, and could ensure equitable participation by poultry producers on a regional basis; as well as effective transfer of potential liability associated with surplus litter management from participating growers to the Litter Bank. Various public sector programs exist that could support a litter-toelectricity initiative, including, in particular, a $0.017/kWh federal tax credit. Additional financial support (e.g., through premium pricing of the litter-derived green power) would likely be needed to ensure break-even financial performance for the enterprise. Under current economic conditions and with the required supplemental financial support, a large-scale, centralized litterto- electricity facility coupled with a Litter Bank for supplying fuel represents the best option for managing surplus litter in many areas of concentrated poultry production in the United States.

Source: The Foundation for Organic Resources Management, Inc. - September 2002