Murray Goulburn Co-operative, Australia’s largest manufacturer of dairy products, is investing in bioenergy technology to minimise its impact on the environment. In using the waste resource to produce energy, Murray Goulburn has seen a two-fold benefit – waste treatment and a reduction in costs.

The company’s investment in bioenergy began several years ago, through a major project which resulted in the production of biogas (methane) from onsite waste. This project saw an upgrade to the Waste Water Treatment Plant (WWTP) which treated the waste from the dairy manufacturing site.

Following this, and with Sustainability Victoria’s financial support, two biogas engines with an electric capacity of 760kilowatts were installed using the methane from the WWTP to generate electricity. A gas treatment system completed the project.

A number of potential suppliers of gas engines and gas turbines were considered, but in order to ensure a payback period of three years or less, orders were placed for Chinese Shengdong engines.

Other suppliers in Europe and America were considered but were unable to provide the same payback period, while delivery would have taken longer than 12 months. Shengli Power Machinery Co has many Shengdong engines across the world, but this was the first time the engines were sent to Australia.

The project took 18 months at a cost of $1.82 million, and the risk was significant. The engines became operational this year and have generated more than 500 megawatt hours (MWh) of renewable electricity, with the potential to generate 5000 MWh per year.

Partners of the project included Sustainability Victoria and SP Ausnet. Under Sustainability Victoria’s Renewable Energy Support Fund, funding of $140,000 was obtained for the project.

From waste to sustainable energy

Prior to the WWTP upgrade, effluent that had not been fully treated was discharged into Venus Bay containing some organics. With the upgrade, an anaerobic biomass digester now digests the effluent and creates methane gas as a by-product.

A flare was installed to burn the gas. The flare was a basic unshrouded device that only partially converted methane gas into less harmful gases (70 per cent efficient). Methane is 20 times more harmful to the environment (as a greenhouse gas) than CO2. By completing the Biogas Engine Project and burning the biogas in an engine, there is 99 percent destruction of methane, plus the electricity generated offsets emissions from grid electricity.

The biological oxygen demand reduction and nitrogen reduction now fully complies with EPA requirements. Overall savings to the company are about $600,000 per year. The savings come from the reduced need for electricity from the grid, as well as the Renewable Energy Certificates earned (each with a tradable value of about $40), which account for more than half the savings.

Lessons learned

• Plan ahead and ensure plenty of room for electricity easements or corridors
• Compile and submit all electrical information on generators to Energy Safe Victoria and local electricity distributor at least six months prior to commissioning
• Obtain connection agreement with electricity distributor early – this entire process took Murray Goulburn more than two years from project commencement
• Work with an experienced consultant to conduct generator studies
• Ensure generators have been inspected and obtain all Australian Standard Certifications before purchasing
• Ensure your biogas digestor has a flare (mandatory), can accumulate some gas (to smooth out pressure and flow) and has a sturdy blanket or cover
• Biogas digestor needs an emergency vent system
• The Office of the Renewable Energy Regulator requires all approvals, including shire council planning permission, in order to apply renewable energy credits
• Engage a contractor who has an electrical distribution license – this gives some guarantee the connection and subsequent power generation is able to proceed with a set budget.