Waste to Energy Projects Are Slow to Take Off in BC

Anaerobic Digestion Plant


March 13, 2014

Despite big uptake in Europe and parts of North America, anaerobic digestion has played a tiny role in British Columbia's renewable energy production. For a proven technology that produces energy from waste and reduces greenhouse gas emissions, its appeal should seem obvious.

Yet it has one significant drawback: It’s not cheap.

Anaerobic digestion (AD) is uncomplicated; essentially, it’s a waste-to-energy technology that heats animal manure and/or food processing waste to 30 degrees C and converts it into a biogas that can be used to generate heat, electricity and fuels. A typical anaerobic digester system can cost between $1.5 million and $4 million to build and requires five to seven years to pay off.

AD projects typically earn revenue from three sources: converting the biogas into electricity for sale to the grid, charging tipping fees for the processing of the organic waste, and selling the digestate byproduct as bio-fertlizer. Selling electricity through a power purchase agreement is the most lucrative and essential to a project's success.

Europe boasts more than 8,000 AD installations and could have nearly 25,000 by 2020. European governments provide long-term power purchase agreements to AD project proponents at a price that guarantees the economic viability of those projects. Ontario has approximately 50 digesters, owing largely to progressive legislation by the provincial government. The Feed-In Tariff Program pays between 16 to 26 cents per kw/h for biogas produced in any of the province’s on-farm digesters.

In British Columbia, BC Hydro pays only 10 cents per kw/h for renewable electricity. A feasible AD system requires at least 13 to 14 cents per kw/h, which is largely why BC has only two on-farm digesters in operation, both in the Fraser Valley.

On-farm AD systems have proven to provide significant environmental, social and economic benefits. However, without an electricity tariff or higher paid rates, the development of on-farm AD systems in BC will continue to lag.