Life’s a (bio)gas

In our first 2013 edition we took an in-depth look at biofuels in South Arica, with the Southern African Biogas Industry Association (SABIA) getting a mention. But with alternative energy being the talk of the town and biogas having a promising future, we bring you more on this wonder vapour.

Biogas is generated through the breakdown of organic waste in an oxygen-free environment with, on average, 60 percent of the gas created being methane – the combustion of which produces energy.

But, as SHEQ MANAGEMENT journalist Claire Rencken reported, SABIA believes that biogas should no longer be lumped together with other alternative energy sources, with it holding enough weight to stand in its own category.

This was made possible, as SABIA chairman Mark Tiepelt explains, with Eskom’s announcement in July last year that its rebate programme will now extend to small scale renewable projects. “Biogas can be stored and the electricity produced can be used at will, especially during peak hours where there is the biggest demand,” he points out. “This isn’t the case with solar- and wind-generated electricity that can only be produced when the sun shines or the wind blows.”

Tiepelt adds that it is possible to generate 2 500 megawatts of power through biogas and estimates that there is a potential to develop a domestic industry worth R10 billion. And with the state’s Independent Power Producer programme aiming to produce 3 725 megawatts of power from wind, concentrated solar energy, biogas, biomass and landfill gas by 2016, biogas can fill a great deal of this quota.

So the future is looking bright for the South African biogas industry.

In addition to Eskom’s rebate programme, biogas investors can also approach the Department of Trade and Industry (DTI) for grant funding through its manufacturing incentive scheme which is applicable to companies that have a manufacturing component to their operations. As an example, dairy farmers who deliver milk to a central dairy will not qualify, but they will however be eligible if the pasteurisation and bottling of the milk takes place on their premises.

Tiepelt points out that the setting up of biodigesters (the oxygen-free breakdown environments) involves a fairly substantial capital expenditure, but with Eskom’s rebate system now including biogas, the financial viability is increased. “Especially with the DTI’s grant scheme, geared toward the manufacturing sector,” he adds.

However, currently, South Africa lags behind the rest of the developed and developing world when it comes to using biogas for energy. “There are approximately 200 small scale biogas digesters, which have been installed mainly by non-governmental organisations, with only about 10 of these being commercial-sized digesters,” Tiepelt points out.

Raoul Goosen from the Industrial Development Corporation’s (IDC’s) Green Industries Business Unit adds: “Germany, as an example, has built 7 000 biogas plants over the past 15 years and currently builds a new biogas plant every eight hours.” He points out that South Africa is currently where Germany was 15 years ago, with our country likely to see increasing investment in many biogas plants.

The IDC’s unit has recently funded some of the first South African biogas plants. “The IDC is committed to assisting further development of South Africa’s growing biogas industry, leading to businesses that currently generate waste becoming cleaner and more efficient,” Goosen emphasises.

Jonathan de Magalhaes, managing director of Ubuntu Energy Solutions (a consulting company on renewable energy solutions), adds: “If you look at abattoirs and farm lands, the waste that they generate incurs a cost as they have to get rid of the waste, but with biogas you’re using that waste to generate energy. Plus, after the process, you are left with organic compost – because the biogas process turns harmful waste into an organic fertilizer as it removes harmful pathogens without removing the nutritional value of the material.”

So, as Tiepelt says, the biggest potential for the biogas industry lies in the industrial and agricultural sectors, with the production of this gassy energy making sense for operations like dairies, piggeries, fruit and vegetable farmers, food processing plants, wine estates and breweries. Basically any company or industry that is already working with organic material, or has organic material as a by-product, and has enough space to install a biogas plant at its operation.

However, despite the advantages to both these operations and the biogas industry, the latter is still faced with some challenges in South Africa. “These include the amount of biogas feedstock that is available in the country, where waste is not generally separated at source, and the Municipal Finance Management Act (MFMA) not allowing municipalities to sign contracts of more than three years with private enterprises,” says World Wide Fund for Nature South Africa Living Planet Unit chief Saliem Fakir.

Tiepelt explains why the three year contracts are problematic: “You are talking about a R50- to R60-million investment in a plant – and if you get only a three-year contract, you won’t get a return on your investment.” But he says that it is still early days and that there’s a lot of red tape involved.

Peet du Plooy, programme manager at Trade and Industrial Policy Strategies (an independent, non-profit economic research institution), offers some more reassurance. “It is to be found in the 20-year contracts that other renewable energy providers have signed with municipalities.” He says that biogas is also tantalisingly job intensive, which will make it even more eligible for longer-term contracts.

Dr Joël Houdet, managing director of Integrated Sustainability Services (another consulting company on renewable energy solutions), emphasises the importance of biogas: “It is a powerful tool to simultaneously reduce your energy and waste management costs, and your environmental impact. And through reductions in carbon emissions, decreases in tax liabilities could become an additional benefit should the much-debated South African carbon tax materialise.”

Fakir adds that the big challenge with biogas production is to get a regular supply of generated gases, and that municipal waste has great potential. And with all the benefits that accompany this renewable energy source, and the additional funding avenues, the biogas industry has great potential to be a major player in South Africa’s energy sector.