Context and potential

In Canada, there are currently 37 operational on-farm anaerobic digestion systems, primarily on large dairy farms, with a significant concentration in Ontario. This province has historically provided the most robust support for biogas development through policies, programs, and incentives, including cost-shared financial assistance and a lucrative feed-in tariff (FIT) system. Ontario’s FIT programs have historically offered the highest rates for electricity generated from biogas in the country.

The pioneering on-farm biogas system was installed at Fepro Farms in Foresters Falls in 2003, utilizing technology from Swiss manufacturer Thomas Böhni Energie & Umwelt. This installation marked the beginning of using on-farm systems connected to the provincial electricity grid. Following this, the support from Ontario’s capital assistance program and green power incentives facilitated the construction of 30 additional on-farm digesters. These systems were predominantly adopted by larger dairy operations, ranging from 250 to 1,000 cows, which utilized a co-digestion process involving dairy manure and organic waste from local sources such as restaurants, grocery stores, and food processors.

However, with Ontario’s electricity grid becoming more decarbonized and the cessation of the FIT program, these larger dairy farms are shifting focus towards producing renewable natural gas (biomethane). Under the prevailing energy and climate change policies, upgrading biogas to biomethane is economically feasible only at larger scales. This shift has left smaller livestock farms with limited opportunities to implement anaerobic digestion systems due to the scale and financial viability challenges.

Innovative micro biogas systems in European agriculture

Introduced in Europe about a decade ago, micro biogas systems have showcased a variety of designs and capabilities. These small-scale anaerobic digestion (AD) systems, generally ranging from 5 to 50 kW, utilize a single type of feedstock to cater to the energy demands of the farm. Predominantly agricultural and sited on smaller farms within the EU, these systems were primarily developed as a response to the escalating costs of co-substrates like food waste, which was once cheap or even profitable but has since become harder to source. Micro biogas setups enable farmers to leverage the full spectrum of AD benefits—including manure valorization, pathogen reduction, enhanced nutrient availability, and new revenue avenues- without the hefty operational and investment demands of larger installations.

The Biolectric small-scale AD System at Harcolm farms, Canada

Harcolm Farms in Beachville, Ontario, represents Canada’s inaugural foray into the micro biogas concept with a dairy operation of 75 cows and 80 hectares of cultivable land. In January 2018, a compact AD system from Biolectric, a Belgian firm tailored to smaller dairy farms, was installed by Martin Energy Group. This model has seen over 125 installations across Europe, chosen for its proven technology, low capital investment, and sophisticated, low-maintenance automation.

Manufactured and pre-packaged in Belgium, the Biolectric system was shipped to the farm for quick installation, significantly cutting down on deployment costs. The digester, composed of insulated stainless steel panels, was assembled in under a week during the chilly month of January. Key components, including mechanical, electrical, and automation controls, were housed within a 20-foot shipping container. Connection to the electrical grid, along with the installation of insulated hot water and manure pipes, was facilitated through a trench leading to the digester. A screw press for digestate at the digester’s exit reclaims undigested straw and hay fibers for use as animal bedding.

The system pumps dairy manure directly into the digester without the need for storage or pasteurization. Post-digestion, the digestate is stored outdoors until it is spread on fields, adhering to a nutrient management plan approved by the Ministry of Agriculture, Food and Rural Affairs. Methane emissions from the digestate tank are minimized using a floating straw cover, and the solid byproducts are recycled as bedding for the animals.

Financial viability and the micro FIT contract

To be economically viable, the investment for an anaerobic digestion (AD) system must align with typical farm equipment returns, aiming for an ROI between 8 to 12%. At Harcolm Farms, the installed AD system features two combined heat and power (CHP) systems, each under separate electrical grid connection contracts. The first CHP operates under a net metering contract that compensates at approximately $0.20/kWh, offsetting the farm’s electrical expenses by about $12,000 annually (in 2018 Canadian dollars). The second operates under Ontario’s micro FIT program with the Independent Electricity System Operator, selling excess electricity back to the grid at $0.258/kWh (adjusted for 20% inflation over 20 years), yielding about $20,000 annually. This micro FIT contract, deemed bankable, was crucial for securing project financing.

Potential enhancements to increase system revenue include:

• Utilizing excess heat from the CHP systems for drying digestate, hay, or wood chips in summer, or for generating hot water.
• Developing a small-scale district heating network to extend heat usage to nearby properties, enhancing overall energy efficiency and heat revenue.

Key advantages of the Biolectric installation

The Biolectric AD system at Harcolm Farms offers an affordable, easy-to-maintain solution that transforms dairy manure from a 75-cow operation into valuable outputs like electricity, heat, nutrient-rich digestate for land application, animal bedding, and surplus electricity for grid sale. Key benefits include:

• Rapid installation and setup, completed in under a week even in winter conditions, with quick operational startup.
• Full automation allowing for remote management via smartphone.
• Efficient processing of fresh manure, enhancing methane yield and reducing fugitive emissions.
• Minimal management overhead as no off-farm materials are needed, avoiding the logistical challenges larger AD systems face in sourcing co-substrates.
• Elimination of land use change issues since the system does not require energy crops.
• Competitive installation costs, similar to larger AD systems, thanks to financial support from the BLOOM Clean Technology Demonstration Fund.
• Reduction in peak electricity demand charges and odour concerns due to on-site processing and minimal manure storage.
• Significant pathogen reduction in the digestate and improved nitrogen bioavailability, reducing the need for synthetic fertilizers.
• Projected annual reduction of 70 tonnes of CO2 equivalent per year over the system’s 20-year lifespan, as part of the BLOOM Clean Technology Demonstration Program’s environmental impact assessment.

This model not only enables farms like Harcolm to achieve energy self-sufficiency but also supports broader environmental goals by significantly lowering on-farm greenhouse gas emissions.

Future chances and essential policy framework

Anaerobic digestion (AD) presents significant environmental advantages for managing organic waste, with scalable technologies suitable for both small and large operations. Despite nearly 11,000 dairy farms in Canada, AD adoption has been minimal due to hefty initial costs and the absence of supportive long-term energy and climate policies that ensure economic feasibility. Since provincial governments primarily control these policy areas, each needs to develop frameworks that reflect their specific needs and contexts.

For small-scale farms, renewable natural gas (biomethane) production remains unfeasible. Instead, initiatives like micro FIT-type programs, net metering, capital aid, or innovative financing models—such as leasing options—could provide the necessary economic justification for these farms to invest in AD technology. In this scenario, the micro FIT power purchase agreements are critical for securing financing, as they are deemed bankable. In contrast, net metering contracts and carbon credits currently do not provide the financial securities required for collateral.

Enhancing the value of GHG emission reductions and other environmental benefits from AD systems could reduce the investment payback time and increase the appeal of these systems. Canadian dairy producers are engaged with the Dairy Farmers of Canada’s proAction program, which focuses on milk quality, food safety, animal care, and biosecurity. The forthcoming 2021 iteration of the proAction program will expand to include environmental sustainability measures.

Compact and automated AD systems represent a viable and economical solution for smaller farms to diminish their ecological impacts if a supportive policy framework is established. This would facilitate broader adoption of AD technologies, aligning farm operations with sustainable practices and contributing significantly to environmental conservation goals.