He installed a nearly $1 million renewable energy system in 1985 that used the methane from manure to create electricity for his farm. In 2002, he replaced that system with newer technology, but he hit a snag when air-quality standards called for expensive retrofits to reduce air pollution; he eventually shut down the system in 2009.
In a few weeks, however, Koetsier’s renewable-energy efforts will get a reboot as a new company replaces his current system with one that is expected to satisfy strict air standards in the highly polluted San Joaquin Valley.
A decade or so ago, dozens of California dairy farmers built million-dollar systems called methane digesters that convert manure into power. Then, unexpected pollution problems, regulatory roadblocks and low rates of return killed most such digester systems, leaving only a handful in operation.
All that could be changing as renewable energy companies develop new ways of running digesters to boost profits. They’re improving technology to meet tough smog-control rules. At the same time, the state is trying out a streamlined permitting process to help remove costly regulatory hurdles.
Koetsier will be the first dairy farmer to install a digester under the state’s program. He said he is optimistic that this go-around — his third attempt to make a system work — will finally pay off.
After hearing of the technological and other advances, he decided to “give it another whirl,” Koetsier said.
State officials are pushing to reduce greenhouse gas emissions, and that is causing utilities to pursue more renewable energy sources. Experts say digesters show particular promise in California, the top dairy-producing state with 1.8 million cows.
“If these digesters run properly, they can reduce odors associated with manure, stabilize nitrogen and have a number of environmental benefits,” said John Blue, climate change advisor for the California Environmental Protection Agency.
The systems “add to California’s goal of renewable power generation. We’d like to see dairy digesters as part of the mix.”
One California renewable energy company, CH4 Power Inc., said it plans to build more than 40 digester systems over the next year. It’s set to begin construction on its first digester on Koetsier’s dairy in the coming weeks. Other firms are expected to follow.
The challenge, however, may be trying to persuade weary dairy farmers to give digesters another try, especially after some tough years in the dairy industry.
Dairy farmers have plenty of manure lying around to convert to energy. A typical cow can produce as much as 150 pounds of dung daily. That presents a continuing challenge for farmers to dispose of waste and control the methane — a greenhouse gas — produced by decomposing manure.
Digesters seemed like the perfect solution only a few years ago. Manure is fed into a digester, which extracts methane from decomposing organic material, removes impurities and burns it to produce energy.
But many farmers ran afoul of air pollution regulations because their generators emitted nitrogen oxide, or NOx, a component of smog.
Retrofitting digesters with catalytic converters was expensive, costing about $150,000, and put additional strain on the engines that run the systems.
The current generation of digesters has improved technology that should alleviate that concern, experts said.
With those advances in mind, officials are trying to kick-start new projects by turning to a consolidated permitting program on the books since the mid-1990s but never used.
It took the collaboration by the state Department of Food and Agriculture, Cal/EPA, and local air and water quality boards to figure out how to permit new digesters.
The goal is to involve all the various permitting agencies in the beginning of the process to ensure there are no surprises later, Cal/EPA’s Blue said.
Ray Brewer, president of CH4 Power, drew Koetsier back to the digester concept with the promise of a new, potentially less risky way of doing business: Instead of Koetsier running the operation, CH4 will lease the land where the system will be installed and buy Koetsier’s manure.
CH4 technicians will be able to monitor it remotely and will be readily available if it breaks down, Brewer said.
Brewer said he tested his system in other states, such as Wisconsin and Idaho, before shopping it around with California dairy farmers, whom he said were very skeptical.
He eventually signed his first contract with Koetsier — “Talk about apprehensive,” Brewer recalled. “That was a little bit of an understatement.”
Brewer’s business model, in which farmers lease their land and sell their animals’ waste to third-party operators, seemed less of a financial gamble, Koetsier said.
It’s a model dairy farmers will be more comfortable with, experts said. That way, a dairy operator can focus on producing milk, not running a small power plant.
“You have a lot of dairy farmers who put these things on and found themselves willy-nilly in the energy business,” said Stacey Sullivan, policy director at Sustainable Conservation, a San Francisco environmental group. “There are few people who have managed to make it work.”
Sullivan said the technology has advanced to meet air- and water-quality standards, but the missing piece of the puzzle is whether utilities will set rates economically favorable to farmers.
Others, however, are skeptical and waiting to see how others, such as CH4 Power, fare.
Mark Moser, president of RCM International Inc., stopped installing digesters in California four years ago.
Moser said the biggest hurdle isn’t the rates utilities pay for energy produced — it’s state environmental regulations. He said the last time he installed a digester in California it took 18 months to get it permitted. In Pennsylvania, where he also installs his machines, it took three months.
“The air rules are impossible,” he said.
About 10 years ago, there were a couple of dozen digesters in California. Now there are just 11, and six of them are Moser’s. He has since moved staff and his manufacturing out of the state.
It’s unclear whether CH4’s bet will pay off, but observers, such as Cal/EPA’s Blue, are paying close attention.
“I suspect if we can get one project through the process successfully, then we’ll have more,” Blue said. “Everyone wants to be second in line with these types of things.”
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