Progress 09/01/11 to 02/28/15

Outputs
Target Audience: The primary audience targeted by Quantalux during this Phase II effort consisted of farmers in mid-Michigan.A keygoal of this project was to target small to mid-sized farms in order to deliver cost-effective biodigestion solutions. Our outreach to this group was assisted by the MSU Extension office, who organized several Farm-Energy events where farmers could assess better energy management strategies. We also participated in Anaerobic Digestion workshops (at MSU) and also shared information with MSU Extension staff in Western Michigan on bio-digestion options. We used these opportunities to meet and discuss anaerobic digestion with Michigan farmers. Farmers face two main hurdles in deploying any digestion system. First, the capital and labor costs for a smaller farmer remains a challenge, with the farm likely needing to finance the capital cost for over 15 years, and with the need for additional skilled staff. Second, the lack of viable power purchase agreements for electrical sales means that farmers will not receive the steady stream of income from electrical sales needed to cover the digester debt-load. In general, the farmers we contacted have chosen energy management solutions with less complexity/ lower initial costs, or have simply decided to wait since fossil fuels prices have dropped significantly. An additional audience consisted of operators of existing anaerobic digesters. We had a number of interactions with experienced operators and owners of AD systems (including Fremont MI and Green Meadows Farm in Elsie Michigan.) We worked to identify key technology shortcomings where Quantalux technology could provide improvements. In particular, we determined that Green Meadows needed enhanced remote monitoring in order to improve AD performance. We proposed additional development work to the SBIR program to develop a retrofit solution to a system such as Green Meadows but were unsuccessful. Finally, we worked with Swedish Biogas to propose an anaerobic digestion solution to a Michigan-based utility Consumers Energy (CMS) in order to provide additional baseload generation for their renewable portfolio. While CMS verbally expressed interest and support for digestion-based generation, they have tentatively selected an increase in their solar portfolio to meet their goals. Changes/Problems: The only major change in this project was the extension of time granted to Quantalux to complete the work. Additional time was justified by the possibility of matching funds from the State of Michigan for the construction of the Pilot Scale digester. These funds were from the Small Company Innovation Program (SCIP) and the dollars became availablenear the end of the original Phase II contract. NIFA granted additional time to Quantalux for no additional cost in order to leverage the matching funds into the Phase II project, allowing an extra $40,000 to be applied to meeting the project's goals. What opportunities for training and professional development has the project provided? This NIFA Phase II SBIR project afforded Quantalux staff the opportunity to gain the technical knowledge and experience with anaerobic digestion (AD) systems.These skills are critical in order tounderstand the wide variety of tradeoffs that any AD designer or operator will face. Tradeoffs are both technical and economic in nature. Specific skills gained by Quantalux staff include: * Thermal management and allowable limits for temperature variations on the digested material * Typical failure mechanisms for operational digesters, and methods to improve reliability * Use of co-feedstocks to earn revenue from tipping fees, and also to enhance biogas production * Key parameters to monitor to assure maximum system up-time. During the course of the Phase II, Quantalux had a successful cooperative development effort with Michigan State and Swedish Biogas. Both groups are experienced in biogas systems, and as part of this Phase II effort, the three groups were able to collaborate on the construction of a pilot scale digester unit. This practical experience in constructing a system provided the opportunity to learn how to design and coordinate the construction of the system. Because the Pilot AD was built at Michigan State, many students were able to be involved in the project, with Quantalux providing engineering experience and guidance to junior/senior level engineering students working on the system. Economically, the staff learned how to evaluate projects by building theAD Pro Forma model. This is a critical skill for anyone working in renewable energy. This model described the benefit of investing in a digester systemfrom the perspective of a neutral investor, and showed how challenging it can be to make a viable investment in the energy field. Staff became comfortable with descibing the Net Present Value, Internal Rate of Return and Hurdle Rates for the proposed projects. In short, we were able to "speak the language" of investors and finance people, which is critical for any entrepreneural firm. During the contact, we met with engineers and personnel from DTE Energy and Consumers Energy (our local utilities in SE Michigan) on the topic of anaerobic digestion, and were able to describe our systems' advantages both technically and economically. We also benefited by partnering with Swedish Biogas staff, who have substantial experience in project development for large digester systems. How have the results been disseminated to communities of interest? Results from the NIFA sponsored Phase II were disseminated primarily at the Biocycle Conference, which is where most professionals in the area of anaerobic digestion meet to share information. Quantalux presented the results of our Phase II work at three separate presentations: "Anaerobic Digester System Failure Analysis, Corrective Actions and Best Management Practices", J Tesar, J Willard - Quantalux & D Kirk - Michigan State University, Biocycle in St Louis, MO, 30 October 2012 Hybrid Biorefinery: Biodiesel and Biogas Production Synergies, Joe Tesar, Quantalux, LLC, Dana Kirk, MSU Department of Biosystems and Agricultural Engineering, Dennis Pennington, Michigan State Extension, Biocycle Conference, Columbus, OH, October 21, 2013 Energy Model for Anaerobic Digesters, Joe Tesar, Quantalux, LLC, David Bradley, Thermal Energy Simulation Specialists (TESS), Dana Kirk, MSU Department of Biosystems and Agricultural Engineering, Biocycle Conference, Columbus, OH, October 21, 2013 What do you plan to do during the next reporting period to accomplish the goals? Nothing Reported

Impacts
What was accomplished under these goals? The overall goal of the Phase II project was to develop strategies and technology that can enable small to mid-sized anaerobic digestion to be technically and economically feasible. The Phase II project plan was broken into two major efforts: • Detailed computer modeling and system design, and • Prototype fabrication. Given the system-wide complexity for anaerobic digesters, computer modeling for specific subsystems is a good approach. Our models were able to look at a wide range of trade-offs as we sought to achieve the ultimate goal: a financially viable digester for smaller farms. We examined energy, feedstocks and potential uses for biogas, all against the background of competing fossil fuels or electricity. We then used the results from our computer modeling to design and prototype an innovative two-stage anaerobic digester. The following items were accomplished during the project. Failure Study of Operational AD Systems: In order to validate our Phase I assumptions on anaerobic digester problems, we conducted a Failure Study for dairy digesters currently operational in the US. The goal was to understand typical failure modes before we started with our own design work. This study used available case studies at dairy digesters across the US to characterize typical failures for both complete mix and plug flow systems. This effort gave us a much better understanding of current problems experienced by anaerobic digesters from the perspective of digester operators. This work set the stage for all tasks by defining real-world problem areas experienced at anaerobic digesters. Co-Feedstock Research: We next developed a detailed evaluation of the biogas production enhancements offered by co-feedstocks with Anaerobic Digester Decision Tool. This model predicts increase in biogas production (and also potential negative effects on the digester) when using co-feedstocks. This work identified various co-feedstocks that could be used to enhance biogas production, and included by-products from biodiesel production (glycerin and oil seed meal) and food waste. This work met Objective 1, Enhance Computer Models and Objective 9, Evaluate Co-Feeds to increase Biogas Production. Energy Modeling of AD Systems: We developed a comprehensiveenergymodel for a anaerobic digester. The model was an accurate representation of the South Campus Anaerobic Digester (SCD), a Continuous Stir Tank Reactor (CSTR) dairy manure digester for approximately 200 cows at Michigan State University (MSU). A key advantage to Quantalux is that the SCD could provide accurate data on energy consumption. Quantalux worked together with our subcontractor TESS, Inc of Madison WI, to develop the model in TRNSYS, a thermal modeling software package. An important result was that the use of Thermal Storage for AD systems was not cost-effective at full scale. Instead, other energy-related strategies were a better investment.A summary of theAD Energy Modelwas presented at the Biocycle Conference in Columbus Ohio. This item meets Objective 1, Enhance Computer Models, Objective 2 - Evaluate TES and Gas-fired Chilling and Objective 5, Couple TES to Digester. Economic Modeling: A detailed financial model (in Excel) to describe the economics of a digester system. This model was a substantial enhancement of the Phase I model, and identified a number of economic barriers, including labor costs, capital costs and declining cost of natural gas. The model calculated important financial parameters such as Net Present Value andInternal Rate of Return, which are the typical metrics used by investors to assess a potential investment. The model also included various revenue sources from co-feedstocks, and also from the sale of electricity (with an assumed per kWh value.Development of this modelmet Objective 3, Enhance Economic Models. Improved Remote Monitoring: Based on the results of the Failure Study, we learned that better monitoring capabilities are needed to enhance digester reliability and performance. We researched key parameters to monitor to assure stable performance, modeled their interaction, and also developed a design for a remote monitoring system. This item met Objective 1 - Enhanced Computer Models since we were able to use the models to estimate the improvement in digester performance. Revenue Options: Another part of the Phase IIlooked at how to maximize the value of biogas by converting to either heat, electricity or fuel.Also,we developed a modelfor an existing digester and analyzed options for earning more money by accepting co-feedstocks. Model for Best Use for Biogas: Biogas provides an excellent renewable energy source. Biogas can generate economic and environmental value in several ways. The Quantalux Biogas Best-Use Model (QBBM) was designed to analyze how AD operation sizewill affectsystem viabiliby. We developed a model that describes the various revenues and costs associated with three forms of biogas utilization. Heat:Thermal energy for hot water, heating and cooling applications. Electricity: Converting biogas into electricity in a generator or combined heat and power unit can serve as baseload (24/7) renewable electricity. Fuel: Upgrading biogas to vehicle fuel specifications (similar to compressed natural gas) can offset petroleum fuel use for transportation. Each application requires different degrees of biogas processing and applies to different energy markets. Understanding the best biogas use is a market-driven decision and requires a combination of energy and economic modeling to understand the various options. The QBBM allows a user to explore a wide range of tradeoffs when considering options for using biogas. Model for Co-Feedstocks to Earn More Revenue: To explore the effect of co-feedstocks on revenue, Quantalux developed a computer model to analyze the effect of co-feedstock ratios on an anaerobic digester's Internal Rate of Return (IRR).This basic model evaluated farms sizes of 100, 250, 500 cows to compare the effects of farm size. The model used IRR=14% as a minimum "hurdle rate", i.e. the IRR above which the investment is considered viable. Food waste from food production facilities is a good potential feedstock because it is high in energy, and is better suited for digestion than for composting. This is especially true of items such as sugary syrup, fruit mash, juices (non-consumable) and other liquid-type waste materials. These materials are current solidified and sent to a landfill for disposal. The Co-Feedstock model allows a user to evaluate the potential economic benefit of accepting food waste into an agricultural digester. Prototype Development: The project concluded with the construction of a Pilot Scale Anaerobic Digester (AD). This unit, designed completely by Quantalux, is a two-stage digester optimized for co-feedstocks. By combining a small thermophilic first stage with a larger mesophilic second stage, the maximum bioenergy can be extracted from any feedstocks. The current system accepts 20 gallons of feedstock per day (approx. "1 cow") and is mounted to a mobile trailer to accommodate different test locations as well as provide a basis for training/demonstration opportunities. The Pilot AD was funded jointly by this USDA SBIR Phase II, and also by the State of Michigan Small Company Innovation Program (SCIP). The combination of funds allowed for additional monitoring and higher level control capabilities. The result is a functional dual-stage Pilot-scale Anaerobic Digester to test biogas production of biodiesel byproducts (glycerin and oil seed meal) and food waste (sourced from the Michigan State dormitories). This effort meets several key Phase II objectives: : Objective 4 - Develop Design Document, Objective 6 - Controlled Operational Testing, Objective 8 - Develop Biogas Distribution System, Objective 9 - Evaluate Co-Feeds to increase Biogas Production and Objective 10 - Demonstrate to Potential Customers/Investors.

Publications

• Type: Conference Papers and Presentations Status: Published Year Published: 2012 Citation: Biocycle Conference, St Louis MO, October 30,2012
• Type: Conference Papers and Presentations Status: Published Year Published: 2013 Citation: Biocycle Conference, Columbus OH, October 21, 2013

Progress 09/01/11 to 08/31/12

Outputs
OUTPUTS: For the first year of the USDA Phase II titled "A Biogas Heat Engine for Small to Mid-Sized Farms", Quantalux focused on a step-wise evaluation of a small-scale anaerobic digester. 1)A detailed financial model (in Excel) to describe the economics of a digester system. (This met Objective 3, Enhance Economic Models): The model we built was a substantial enhancement of the Phase I model and other Quantalux work, and identified a number of economic barriers, including labor costs, capital costs and declining cost of natural gas. The model focused on dairies currently using propane and fuel oil for heating on the farm. Cost-of-operation, Return-on-Investment and Internal Rate of Return were computed. 2)A detailed Failure Study that analyzed typical problems or failure modes seen by anaerobic digesters currently operational. (This activity supported Objective 4, Complete a Design Document): This study was done in collaboration with Michigan State University, and used available case studies and collected data to identify and characterize typical failures for both complete mix and plug flow systems. 3)A detailed evaluation of the advantages offered by co-feedstocks (This work met Objective 9, Evaluate Co-Feeds to increase Biogas Production). This model, built in collaboration with Swedish Biogas, Inc. is a detailed assessment of various co-feedstocks and their predicted increase in biogas production (and also potential negative effects on the digester.) We next created a detailed design for a 300 cow anaerobic digester system, and then evaluated this design using TRNSYS, a thermal modeling program. 4)A detailed design for a 300 cow anaerobic digester system (partially meeting Objective 4, Complete a Design Document). This activity was conducted in collaboration with our partner Swedish Biogas. Our goal was to construct a baseline system using standard equipment and parts. Once the system had been laid out, we could then look at two critical areas: a) the parts or components that have the greatest impact on cost, and b) the areas of the system that consume the most energy, and therefore increase cost-of-operation the most. (The same baseline design will be scaled down to 100 cows in Year 2 of the contract to identify the minimum viable size for a digester system.) 5)An updated thermal model for an anaerobic digester (which met Objective 1, Enhance Computer Models). This activity constructed a complete thermal model of the 300 cow using TRNSYS, a thermal modeling software package. All energy flows were modeled. We also worked to gain a better understanding of the commercial barriers (and opportunities) for smaller. 6)A commercial evaluation of the small-scale anaerobic digester market (as part of the USDA Commercialization program), and 7)A computer based decision tool for small scale digester systems , funded by matching funds from the Michigan Emerging Technologies Fund (MIETF). 8)During the summer of 2012, MIETF also funded a comprehensive evaluation of the market for digested soils as an "engineered soil". The goal of this effort was to identify how smaller farmers could extract more value out of their existing anaerobic digester systems. PARTICIPANTS: The Principal Investigator for this project was Mr. Joseph Tesar. He was responsible for project management of each of the Activities listed previously. In this role, he coordinated the subcontracting activities with Michigan State University (MSU), Swedish Biogas, Inc (SBI) and Thermal Energy System Solutions (TESS). Mr. Tesar also contributed to on technical content for all the Activities listed above, in particular the financial model and the co-feedstock models (with SBI), the thermal model (with TESS) and the failure analysis (with MSU). His contract hours for this Fiscal Year (September 1, 2011 to August 31, 2012) were 614 direct hours and 268 indirect hours. A new employee is Mr. John Willard. He was hired in 2012 as a full-time employee having received a master's degree from the School of Natural Resources, Sustainable Systems, University of Michigan. Mr. Willard was able to bring outstanding knowledge of renewable energy systems (esp. biogas systems) based on his master's coursework and projects. Mr. Willard worked on the engineered soil analysis (and business plan), the Anaerobic Digester Decision Tool, and an assessment of existing producer-handlers farms and utility rates in states that are targets for digester development. His total hours for the FY2012 were 452 direct hours. (Mr. Willard will work on this SBIR Phase II contract through FY2013, and on additional Quantalux projects in the future. ) Swedish Biogas (sub-contractor) worked primarily on the co-feedstock model and on the initial design of the 300 cow anaerobic digester system. For FY2012, Swedish Biogas was paid $30,000. We anticipate additional work for SBI in FY2013 as we make revisions to the 300 cow system and also as we design the 100 cow system. Thermal Energy System Specialists (TESS, subcontractor) were responsible for the thermal models for the 300 cow system. This model is being built in TRNSYS, a high level thermal modeling tool. Work is ongoing since we are scheduled to modify the TRNSYS model to represent a smaller, 100 cow system in October and November of 2012. TESS has been paid $2000 for an initial payment, but as of the date of this report, has not yet invoiced for their additional work. Michigan State University (Anaerobic Digester Research and Education Center) was responsible for a portion of the Failure Study. They were paid an initial payment of $3000 for this effort, but has not invoiced for the additional work (as of the date of this report). Significant additional work is planned for MSU in FY2013 for prototyping and testing. We also hired several students from the University of Michigan to support us in our tasks during the summer of 2012, but they did not exceed 160 hours for each. (Additional information can be made available upon request.) TARGET AUDIENCES: The Target Audience for the anaerobic digester technology under development includes small farmers or agricultural producers. While our initial focus is to look at dairy farms, we anticipate that we can also consider swine, poultry and cattle once we have the technology refined. The intent of the work by Mr. Willard in the summer of 2012 was to identify producer-handlers in various states. He constructed a database of producer-handler dairies based on available information on line. This initial work will be augmented later in the project as we make additional progress on the prototype development. We have identified three producer handlers in the Southeast Michigan area to work with: Mooville Dairy (Nashville, MI.), Crooked Creek Dairy (Romeo, MI.) and Calder Dairy in Lincoln Park/Carleton MI. Each is a dairy with approximately 100 cows and all produce specialty milks that allow them to charge a premium over what they would receive for bulk wholesale milk. We are currently scheduling energy audits for at least two of these dairies in order to accurately assess energy consumption for a) hot water and b) pasteurization. The energy use patterns for these farms will offer real-world data on consumption patterns for a dairy farm. This data will then be integrated into the thermal model that we have developed in TRNSYS. PROJECT MODIFICATIONS: In general, the Phase II project is proceeding according to the proposed project plan. However, there were a few minor delays. One minor delay was experienced when Swedish Biogas had to delay their design work on the 300 cow system due to a large workload on their other projects. Michigan State also had a minor delay in finishing the failure analysis, attributable to a conflict with other projects for their staff. We emphasize that both delays were minor, and occurred reasonably early in the project, Quantalux was able to reorganize the task sequence and continue with the project's technical tasks. We have been working with both SBI and MSU to coordinate our scheduling for next year, and do not anticipate any problems in FY2013.

Impacts
1) Financial Model: Quantalux determined that it was essential to first evaluate the financial picture for a smaller anaerobic digester. We constructed a detailed Excel-based model for a complete dairy-based anaerobic digester in order to describe all financials. This model was a substantial enhancement of Phase I work and other Quantalux work, and considered the avoided-cost of fossil fuels to be available revenue to the dairy farmer. We identified three key areas in need of development: i) Technology to decrease labor costs for the small system, and ii) Technology to decrease capital costs for the digester itself, and iii) Solutions to extract more value from the anaerobic digester outputs (biogas and digestate). 2) Failure Study: The financial model indicated that labor for maintenance and operations is a significant cost-of-operation. Furthermore, our research showed that many operational systems have had a history of recurring problems and serious failures. Some digesters have ceased to operate. We therefore used case studies and data to analyze the source of typical digester failures and problems. Lessons-learned will guide the design and development activity to follow. 3) Co-Feed Assessment: In order to assess potential increase in biogas, we developed a detailed spreadsheet model that calculates the increased biogas amount that is possible when co-feedstocks are added. This activity was performed in collaboration with our subcontractor Swedish Biogas International. 4) Baseline Design: We also developed a baseline design for a 300 cow anaerobic digester. This was done in collaboration with our subcontractor Swedish Biogas. Our goal is to construct a baseline system using standard equipment and parts, and then focus on decreasing costs and enhancing performance. (The same baseline design will be scaled down to 100 cows in Year 2 of the contract to identify the minimum viable size for a digester system.) 5) Thermal Model: Quantalux and Tess, Inc (Madison, WI) developed an initial thermal model based on the 300 cow system (Activity 4) so as to describe the energy flows in and out of the digester system. The goal was to identify and rank the energy consuming components, and then to modify the design to decrease energy consumption. (Energy is both electricity and thermal energy). 6) We worked with LARTA during and after the USDA Commercialization conference, and submitted a commercialization report. 7) Using MIETF matching funds from the State of Michigan, we created a software- based decision tool that includes all potential revenues and costs so that a smaller farmer can evaluate if an anaerobic digester is a good investment. The Tool includes energy cost data from all U.S. states and also lists other potential revenue sources (carbon offsets, etc.) This decision tool will be enhanced during the second year of the Phase II. 8) We also used MIETF matching funds to conduct a complete assessment of how digested solids can be enhanced in value and sold into the marketplace. This effort was expanded into a business plan for Engineered Soils for organic farmers, and will be entered in several business plan competitions available to Quantalux.

Publications

• The Failure Study identified in Activity 2 will be presented at the Biocycle Conference, Organics in Recycling in St. Louis on 30 October 2012. Co-authors are Joseph Tesar of Quantalux and Dr. Dana Kirk of Michigan State University. The session is titled Digester System Optimization, and Selection, and will also discuss recommended corrective actions and best management practices. All data for this Study was taken from published case studies and individual interviews with anaerobic digester owners. Proceedings from the conference will be published after the conference.