South Africa’s first commercial biogas plant, in Bronkhorstpruit, east of Pretoria, is the product of perseverance, good partnerships and lateral thinking. For over eight years, entrepreneur Sean Thomas, CEO of Bio2Watt, waded through untested waters, eventually setting a precedent for future biogas-to-electricity projects with a 10-year off-take agreement with BMW.
In 2007 Sean Thomas embarked on what he thought would be a few years of hard work to develop South Africa’s first large-scale biogas-to-electricity plant, but legislation and licensing proved to be bigger challenges in getting the project off the ground than he had anticipated. It was only on 10 October 2015 that the first unit of green electricity was purchased. The environmental impact assessment (EIA) process in particular, took almost three years and cost ten times the initial amount expected. In spite of this, Thomas’ determination in pursuing renewable energy saw the sector break new ground with regard to the project’s scale and the legal arrangements as well as the power-purchasing agreement (PPA) and wheeling arrangement.
At 4.4MWp, the Bronkhorstpruit biogas plant is by far South Africa’s largest.
How it works
The plant was designed, manufactured, installed and supplied by Bosch Projects together with Danish technology partner CombiGas, and was the winner of the CESA Engineering Excellence Award in 2015 for a project valued between R50 million and R250 million.
Organic waste is fed from a receiving tank towards primary and secondary digesters after being mixed with water, aiding its transport towards the digesters, explains Thomas. The water used in the plant is obtained from pollution dams on the feedlot. Two types of conditions are present in the airtight (oxygen-free) primary and secondary anaerobic digesters, which resemble large tanks. Firstly, thermophyllic (primary digestors), where bacteria operate at temperatures of between 50 and 52 degrees celsius and; secondly mesophillic (secondary), where bacteria operate at temperatures around 39 degrees celsius. The gas is eventually directed into an internal combustion engine commonly known as a gas engine, which produces electricity. A by-product of the plant is the nutrient-rich digestate, which is used as fertiliser.
Waste feeding the project
Thomas worked with technology partners from New Zealand and approached large producers of waste to gauge their level of interest in supplying the feedstock. Thomas was met with scepticism from a few feedlot owners: “Some of them said: Ja, we’ve heard about biogas before but it doesn’t work,” he explains.
An eventual key supplier of waste was Beefcor, one of the country’s largest, oldest feedlots. An area adjacent to Beefcor would be chosen as the site of the plant, located some 80km east of BMW’s Rosslyn plant. The site was chosen for its access to important fuel supplies, grid connectivity and sufficient water supply from Beefcor’s storm water collection dams.
The Beefcor feedlot carries 25 000 head of cattle and 2800 lambs, and produces significant organic waste in the form of manure. Bio2Watt estimates that as much as 40 000 tonnes of cattle manure per year will be fed into the two anaerobic digesters, with about 20 000 tonnes of mixed organic waste to produce the biogas feedstock for a combined heat and power application. Tshwane Municipality, as well as Kimberly Clarke also became key suppliers of waste for the project. All waste suppliers provide waste without cost. According to Thomas, South Africa does not have a set price for waste that is used for the purpose of producing electricity, unlike several European countries where governments have specific feed-in tariffs for the amount of waste supplied. The plant is fed with 160 tonnes of manure per day, with the remaining 340 tonnes coming from other sources.
Getting the partnership right
After consulting with the National Energy Regulator of South Africa (NERSA) and the Department of Energy (DoE), and realising there was nothing in the legislation precluding Bio2Watt as an Independent Power Producer (IPP) from selling electricity, Thomas needed to find a large industrial organisation that would be interested in buying the electricity.
When BMW, a pioneer of sustainability in the automotive sector, expressed interest in purchasing the ‘green’ electricity generated from the plant, Thomas realised the weight that a well-respected global brand held. The off-take agreement was officially signed a couple of years ago, marking the first time a small IPP has sold electricity directly to a private industrial consumer using the national grid to transport the power into a municipal area.
BMW’s interest in the project comes from the company’s vision to incorporate sustainable practices into its business operations. Specifically, the German manufacturer aims to achieve 100% renewable energy at its manufacturing plants world-wide from the current 51%, says Tim Abbot, BMW SA MD. Although the electricity generated at Bronkhorstspruit is purchased by BMW, the biogas-generated electricity is not physically taken up at Rosslyn.
Rather, a power wheeling arrangement between Bronkhorstspruit Biogas Project and the City of Tshwane as well as Eskom allows the plant to connect to the grid and facilitate the sale of electricity between Bio2Watt and BMW. A wheeling arrangement of this nature had never been facilitated before and sets a precedent for other small IPPs. For the ‘greener’ power, BMW is paying a slightly higher premium, with Bio2Watt paying a monthly fee for use of the grid to Eskom, as well as a wheeling fee to the city.
The total project cost was R150 million, or R34 090/kW, and was financed primarily through a R98 million loan from the Industrial Development Corporation (IDC) as well as a R16 million grant from the Department of Trade and Industry and about R36 million in equity. Equity investors include Norfund, the engineering procurement and construction contractor, Bosch Projects, two impact funds from two high net-worth families and Bio2Watt. The plant’s modular design means it could be scaled up to around 8MWp, which would be in line with BMW’s 12MW demand at the Rosslyn plant. In addition, the plant’s life cycle is estimated at 20 years, so a second PPA could be agreed to between BMW and Bio2Watt after 2025.
Blazing a trail
Given the large number of cattle in the country and the proven viability of biogas, Bio2Watt believes there is massive potential for biogas as an option for renewable energy.
Importantly, the Bronkhorstspruit project has opened the door for other renewables often sidelined by wind and solar, and is putting the waste beneficiation economy on the map. The provision of electricity to a private buyer on a smaller scale is a market to watch in coming years.
By Jonathan Ramayia
For the full article, see earthworks magazine Issue 29, December 2015/January 2016.