Slow, stinky start to Le Sueur, Minn., green-energy project

LE SUEUR, Minn. – Nearly two years after going online, an innovative, municipally owned power plant that burns methane from agricultural waste is generating only a faction of its promised electricity.

The $45 million plant, built partly with federal aid in this city 50 miles southwest of Minneapolis, also is producing something its promoters said it wouldn't — stink.

"It is like living next to a giant poop plant," said Katie Terwedo, the closest neighbor to the Hometown BioEnergy plant that began operating in late 2013.

Although the plant has steadily increased its power output, it remains well short of its goal of generating electricity for 12 hours or more per day. In the first three quarters of 2015, it operated at just 12 percent of its capacity, or about three hours per day on average.

The plant's owner, Minnesota Municipal Power Agency (MMPA), and its operator, Minneapolis-based Avant Energy, express confidence in the technology. They said that odors are being addressed and that ramping up to full-scale power generation was expected to take time.

"We would be very happy to reach 12 hours [of daily power generation] in five or six years," said Derick Dahlen, CEO of Avant Energy, which gets an unspecified payment to operate the plant and collected a share of the $11 million in fees to plan and build it.

At that pace, the plant would reach its expected generating output around 2020, the state's deadline for most Minnesota utilities to get 20 percent of their electricity from ­renewable sources.

The challenge, executives said, is finding the best mix of agricultural wastes. They're dumped into tanks called anaerobic digesters, where bacteria produce methane, or natural gas, to run power generators. An innovative feature of the Le Sueur plant is three fabric domes that store methane so that generators can run only when electricity demand is high.

Husks from sweet corn processing are the primary waste "feedstock" for the plant. But more than 25 agriculture and food industry wastes, from manure to cheese whey, have been tested with the aim of signing contracts to take the most advantageous, said Kelsey Dillon, Avant Energy vice president of biopower.

"Our objective is to have as much feedstock diversity as possible," said Dillon, and each new waste requires test loads in the anaerobic digester. "It was always intended that we would need a ramp-up as we are bringing in those different feedstocks."

The plant, largely funded with municipal-backed bonds and $8 million in federal aid, has generated controversy from the beginning.

John Schultz, a critic of the plant who is a former member of the Le Sueur City Council and MMPA board of directors, said he never heard, until now, that the plant would take many years to reach its power-generation target.

"The implication was that in a very short order it would be a functioning plant," Schultz said. "They could have put up a solar project for a fraction of the cost and had it running the first day."

Dahlen said the plant isn't yet generating at 5 cents per kilowatt hour as he has projected, but is meeting financial goals, which he declined to share. At the projected price, the plant's electricity would be cheaper than solar, and close to the price of wind power.

The multiyear ramp-up doesn't worry Steve Schmidt, an Anoka City Council member and chairman of the MMPA board of directors, who pointed to a 2014 "Top Plant" honor awarded by a power industry trade journal for the innovative approach to biogas.

"We are kind of inventing along the way," Schmidt said.

More than 2,000 biogas plants operate in the United States, mostly at landfills, which naturally produce methane from the breakdown of waste. Many small plants operate on farms, turning manure into energy.

Dan Andersen, an assistant professor and extension specialist in the Iowa State University Agricultural and Biosystems Engineering Department, said designers of biogas projects often are "very optimistic" about how much methane a digester will produce. He said he has visited plants, though not Le Sueur's, that get only 50 to 70 percent of the expected output.

"They found that there are some struggles in the day-to-day operation," Andersen said. "For the most part the systems are still in operation. They are making energy, maybe it is a little less than they were hoping for, but they are plugging along."

Most reach 50 percent of their operating capacity in a few months, he added. Yet not all have been a success. According to the U.S. Department of Agriculture, 54 farm-based projects have been shut down, including nine in Wisconsin. A manure-based plant in Dane County, Wis., that leaked liquid waste and emitted stinky hydrogen sulfide paid an $80,000 state penalty in July, court records show.

Andersen said a plant like Hometown BioEnergy faces more complex challenges because of its larger size and mixture of wastes. The plant's financial model relies partly on collecting "tipping fees" for wastes that might otherwise go to landfills. The plant also aims to profit from the sale of byproducts of the digestion process, including nutrients that can be applied to farm fields.

But the waste and nutrient markets can be tough, Andersen said. One problem, he said, is that waste materials often contain water. "It costs a lot of money to move water around," he added. Ramping up a mixed-waste biogas plant "is as much an economic management decision as it is something about the technology," he said.

Although the Hometown BioEnergy plant is large compared with other biogas plants — 8 million watts of output — it's a small part of MMPA's generating capacity, which includes large natural gas-fired units. In 2014, the biogas plant produced just 0.3 percent of the electricity MMPA supplied to the 12 cities that own the power agency.

One of the goals of the project is to meet the state mandate for utilities to get 25 percent of their electricity from renewable sources by 2025.

MMPA also has a wind farm and scattered wind turbines and is considering solar power to meet the requirement.

If the biogas plant can't achieve its operating goals, "you have put out a lot of capital to run the plant a few hours," said Doug Tiffany, an assistant extension professor in the University of Minnesota Department of Applied Economics.

Neighbors of the plant would be happy if it didn't stink.

Kena Sheets, who lives and works near the biogas plant, said that driving past it during one of the intermittent stinky times is "like walking through a sewer."

Last spring, when odors were particularly bad, Terwedo, the closest neighbor, said her daughter "literally threw up on the back steps" as she walked from the house into the foul air.

Avant and the Danish supplier of the plant's equipment, Xergi A/S, initially said odor wouldn't be a problem. After the complaints, the plant did maintenance on a biofilter, Avant's Dahlen said.

That helped but didn't solve the problem, neighbors say. Terwedo said the odor was so bad recently that she complained to the Minnesota Pollution Control Agency, which says it will look into it, but only has jurisdiction if a regulated pollutant was emitted.

Avant officials contend that other sources of odor might be to blame. "You do run into those sorts of challenges in an agricultural community with this much food processing," said Dillon. "It is not easy to tell what you are smelling and where it's coming from."

But neighbors said their noses are not being deceived about the source of the stink. Sheets said Hometown BioEnergy's odor is "ten times worse than a farmer putting manure on a field."

David Shaffer • 612-673-7090

Twitter: @ShafferStrib