Even Yehuda, Israel -- (SBWIRE) -- 08/28/2013 -- The clean energy markets have seen their fair share of success and failure over the past few years in the U.S. and globally. Now, one market that has been successfully growing in Europe may be ready to greatly expand in the United States and small public companies like Blue Sphere Corp are ready to pounce on burgeoning opportunities at U.S. locations.

Anaerobic Digestion (AD) is commonly known as a process in which microorganisms break down organic material in the absence of oxygen, creating Biogas (methane), which is then refined to create renewable natural gas. The biogas is then sold or used to create heat to turn an electrical generator. The second output of AD is digestate, which is mineral rich and sold as soil conditioner or fertilizer. Anaerobic Digestion has been around for decades, but updated technology is making AD more efficient and cost competitive in areas where the feedstock is readily available.

Traditionally, AD plants used manure as feedstock at commercial livestock farm sites, such as dairy farms and hog farms. These farms needed around 500 centrally located animals to be economically viable. One of the biggest issues with the original technology was that manure is digested material and the animal that provided the manure has absorbed much of the energy. New technology allows the utilization of organic materials and food waste, providing more than 10 times higher energy content, as these waste streams have not been previously digested. This new technology, known as complete mix or flow-through technology, is allowing AD technology to move from the farms into more populated areas where most of the food waste is produced.

The amount of food waste, or organic substrate as the Environmental Protection Agency (EPA) calls it, is vast and growing in the United States. In 2010 about 250 million tons of municipal solid waste was generated, 14% of which was organic substrate, 8% of the 250 million tons was commercially derived organic substrate according to the EPA. The commercial organic substrate is waste generated from grocery stores, fast food restaurants, full service restaurants and large hotels as well as commercial food processers, growers and manufacturers. In 2010 less than 3% of these waste streams were utilized to produce energy, the rest went to landfills. Anaerobic Digestion facilities in addition to producing biogas, electricity and fertilizer, act as endless landfills, providing significant environmental benefits by reducing waste delivered to landfills. By reducing the organic waste in landfills, there is a large reduction in green house gas production at those sites, some estimates are as high as a 13 million metric tons per year reduction in CO2 equivalent gas can be achieved through AD technology.

Renewable Waste Intelligence put out a report in March 2013 titled “Business Analysis of Anaerobic Digestion in the USA.” The opening paragraph tells the story of a US market that has the potential of substantial growth in the use of Anaerobic Digestion for energy production. The report states:

Business Analysis of Anaerobic Digestion in the USA Market conditions are looking increasingly favourable for the growth of the anaerobic digestion industry in the US. While this form of biogas production has historically been limited to agricultural and wastewater uses, it is growing in favour as a method of managing and extracting value from food wastes. The feasibility of anaerobic digestion projects varies state-to-state, however advances in technological application and favourable legislative developments are driving investment interest in the space.

According to the EPA, as of September 2012, there are 197 anaerobic digestion systems operating at commercial livestock farms in the US. The Innovation Center of U.S. Dairy had a report produced by Informa Economics in February 2013 titled “National Market Value of Anaerobic Digester Products,” and this report stated the dairy industry alone could product 2,647 digesters for installation on large dairies in the US. These digesters can be economically viable if they combine the feedstock of manure with food waste in a 30% to 70% combination. The report estimates that these digesters could produce current market values for the following production by-products:

- Electricity -- $894 million
- Pipeline Biomethane -- $413 million
- Compressed Natural Gas (CNG) -- $733 million
- Fertilizer nutrients – over $700 million

This indicates substantial value can be created by AD within the Dairy Industry. It is anticipated that the economics for AD could even improve with a move into more populated areas where food waste and organic waste is more readily available and the landfill relief is greatly needed.

Germany is a leader in utilization of AD systems with over 4,000 plants in operation. Germany also boasts the highest utilization rate of greater than 90% efficiency in their plants. With 31 states now passing renewable energy standards and regulating the amount of food waste allowed to be delivered to landfills, the opportunity and necessity for advanced AD technology in the United States is growing. There are estimates of market availability for upwards of 25,000 AD systems in the US.

The market is ready for growth and there are several projects in the planning stage. In Charlotte, North Carolina, a 5.2 mega watt (MW) plant has been announced and is expected to break ground within the next couple of months. The Charlotte Plant has attracted over $25 million of financing including a loan for over $17 million from Caterpillar Financial Services, a division of Caterpillar Inc. A German company that has built over 400 Anaerobic Digestion plants worldwide, BioGas Nord AG, is providing state-of-the-art flow-through AD technology and manufacturing expertise to the project. The project developer of the Charlotte Plant is a small public company with big plans, Blue Sphere Corp. The CEO of Blue Sphere stated in an interview that his company is planning to build, own and operate over 60 MW of electricity production generated from Anaerobic Digestion plants. Blue Sphere has a second project that is expected to break ground in Johnson, Rhode Island by the end of this year.

These two AD plants are a couple of just a handful of AD plants that are either operating or in the planning stages for non-farm Anaerobic Digestion energy production. These projects suggest that the race is on in the development of this new clean energy production market. This AD driven clean energy market delivers environmental benefits of less greenhouse gas emissions and less waste for landfills while producing clean energy and fertilizer. As depicted in the Charlotte Plant, large and small companies are planning and investing in these economically viable clean energy generators. Anaerobic Digestion technology looks to be the next big thing in the United States clean energy market.

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