Business & Economy
6:10 am
Wed June 20, 2012

Power Companies Won't Meet Pig Poop Electricity Mandate

Back in 2007, North Carolina passed the first renewable energy mandate in the Southeast. The new rules say that by the end of this year at least three percent of all electricity needs to come from green sources. The power companies say they'll easily meet that, but they're going to come up short on two fronts. The law includes a provision for electricity from poultry waste and hog manure. The utilities say they can't meet either one of those terms.

Asma Khalid: The mandate dictates that by the end of 2012, .07 percent of electricity needs to come from pig poop.

No other state in the country converts swine waste into electricity. It's unusual to say the least. I was wondering where this mandate came from, so I turned to Mike Williams. He's an agriculture professor at NC state and a guru on swine waste issues. He says this poop provision could be a blessing for the pork industry.

Now, Let's rewind a bit. In 1997, the state issued a moratorium on constructing new open-air lagoons. Traditionally, hog farmers stored pig poop in these lagoons. This law gives them an alternative.

Mike Williams: We will be generating green energy as well as addressing the environmental concerns and then that should enhance the sustainability of these industries, which their economic importance is not debatable, they're very important to the state of NC.

So, that's the thinking behind why North Carolina is the only state with a pig poop electricity requirement.

The problem though is when you're a pioneering entrepreneur, like North Carolina in this case, you're going to face hurdles.

The power companies have had a hunch they wouldn't meet this mandate basically since it was enacted. Earlier this month, they officially filed paperwork with the utilities commission asking for a waiver.

Scott Sutton is a spokesman for Progress Energy.

Scott Sutton: Every step we make is virtually a brand new step. It's new ground, you know, the hog farmers haven't been there. The developers haven't been there. The utilities haven't been there, so there's no real model we can look to, to know exactly the path forward.

Sutton is exaggerating a tad. There is at least one fully functional prototype in Yadkinville, west of Winston-Salem.

But, his point remains, not a lot of folks work in the swine waste to energy business.

Scott Sutton: All of the utilities could only come up with seven projects. So I think that goes to show just how small the pool of people are working on this issue.

Sutton mentioned seven projects. Four of those were cancelled. And, that's where things get muddy. The utilities say it was a matter of missing deadlines and immature technology. Developers strongly disagree. Most of them can't talk on the record because they've signed non-disclosure agreements. But, broadly they think the utilities' complaints are hogwash.

Lloyd Lipman is one willing to speak up. He's the managing director of Carolina Alternative Energy. He says he had a contract with the utilities until about four weeks ago when they terminated it.

Lloyd Lipman: I feel that a lot of time was wasted. And from their standpoint, what's the time. From our standpoint as a developer it's not just time, it's money. And this could have been established right up front, the attitude.

Lipman says the utilities came to the negotiating table skeptical about the technology. But, developers, like Lipman say the technology exists, and they know it works. They point to Loyd Ray Farms in Yadkinville, a farm with nearly 9,000 pigs and three benefactors; Duke Energy, Duke University,and Google.

Marvin Cavanaugh is with the engineering firm that designed the project. He says it's fairly simple. Pigs don't need to fly, they just need to poop. The farmer flushes roughly two hog houses a day. All that manure falls into a covered aneorbic digester where tiny microbes break it down.

Marvin Cavanaugh: The bacteria is working, and we like to call them the bugs. The bugs are in there working. And they have a better environment if you stir it. So, we have two big pumps, they're always stirring.

Those bugs produce methane gas. That methane is burned in a microturbine to generate electricity.

Marvin Cavanaugh: The microturbine is where the electricity is made. It's just like a big turbo jet. Right now, it's producing, we're producing about 51.1 kilowatts.

This project costs 1.2 million dollars, and that doesn't include annual maintenance expenses. Duke Energy estimates it would need some 260 farms like this one to meet the mandate. Do the math, that's pricey electricity.

Tanja Vujic: It's definitely more than coal!

Tanja Vujic is with Duke University. She helps run the facility.

Tanja Vujic: There is a premium for swine waste-derived electricity, for sure. I think the cost is gonna to come down with time, the more these systems are put on the ground. The first project certainly was an expensive project and this is expensive electricity.

Nearly everyone agrees, the hang-up is the price tag. Duke Energy and Progress Energy estimate that swine waste is up to five times more expensive than other forms of renewable energy. As power companies, their job is to purchase cheap energy for their customers. And buying swine electricity doesn't mesh with that objective.

That's why they filed a waiver for this year. And they say it's doubtful they'll meet the requirement next year either.

But, the problem is that if no one is willing to take the risk and pour money into these early pilot projects, some fear the mandate may eventually be eliminated.