The Business of Biowaste: Developing a Profitable Model for Off-grid Energy
Wednesday, March 31, 2021
Growing, processing and distributing agricultural products takes energy—and not just from the sun. Unreliable sources of electricity can be the difference between a profitable harvest and a loss, particularly for smallholder farmers, cooperatives, and larger businesses operating in low- and middle-income countries (LMICs). Many such ventures contend with inconsistent, inefficient and expensive power. And the frequent solution to this challenge, generators, isn’t necessarily the best one. They’re inefficient and produce high levels of emissions.
On top of energy issues, farms are under constant pressure to increase crop output, a goal that goes hand-in-hand with the need to improve and maintain soil quality. Farms also have to manage crop residues—a pricey and taxing process that could include burning, composting or transporting the unused remnants, or “biowaste,” of their harvests.
Unfortunately, the consequences of inefficient agricultural practices don’t just fall on the local businesses. There are massive climate impacts: Energy and agriculture are responsible for nearly 60% of global carbon emissions, and global emissions from crops and livestock grew 14% between 2001-2011. In turn, climate change affects agricultural production by creating warmer temperatures and weather changes.
These layered challenges are normally addressed in layered approaches—but University of Michigan Professor Jose Alfaro has developed a more comprehensive solution rooted in a circular economy approach. Alfaro, an assistant professor of practice at U-M’s School of Environment and Sustainability and a WDI Research Fellow, is rolling it out as a new business, MBRACE (Minigrids from Biomass Residues for Agricultural Circular Economy), with the help of the William Davidson Institute at the University of Michigan.
“Our work with MBRACE is a really good example of what WDI can do by pairing our lens and business expertise with a technical expert aimed at commercialization,” said Dana Gorodetsky, senior project manager on WDI’s Energy consulting team. “We’re helping to take something from an academic setting and turn it into a profitable and sustainable business, one that also improves lives and businesses in LMICs through improved energy access and other benefits.”
Adapting Existing Technology for Real-World Solutions
Considering the problems facing farmers around the globe, Alfaro, an energy and environment expert, began to connect the dots between common agricultural business concerns and existing technology. “We saw a problem, we worked with real customers, and we came up with solutions,” said Alfaro.
That solution comes in the form of biomass gasifier technology that turns agricultural waste into power and fertilizer in a carbon-neutral way. While gasification is a fairly old technology, Alfaro is applying it in a new way.
His concept is centered on adapting sustainable technology and bringing it to small- and medium-sized enterprises (SMEs) in developing countries. “That is really the way to drive the market in these emerging economies,” Alfaro said.
The result is a circular economy approach, one that addresses multiple problems and fuels itself. Farms turn their crop residues into pellets or keep them in an easy-to-handle form, making it easy and safe to store the remnants. The biowaste is then gasified in the reactor, and the thermal process breaks down the biomass into its components. The synthetic gas that is produced can be used to power an engine, becoming an energy source for the agricultural business or local community, or sold back to the grid for profit. The carbon product that’s left, biochar, is a carbon-rich material used as an addition to the soil. As a soil amendment it can improve crop yields, and it can also allow the farmer to gain carbon credits where there are carbon markets.
The system is already up and running at its first sites. In Puerto Rico, the MBRACE team installed a 15kw gasification system and tested it using wood feedstocks. It is now working with a community that recently created a cooperative around solar microgrids. The group is moving toward lowering their electricity costs and possibly selling excess electricity back to the grid for a profit. In Costa Rica, the team is working closely with a major coffee cooperative to improve energy sourcing, guard against power losses, and put the group in a position to sell carbon credits.
And, in Michigan, Alfaro has built and installed a gasifier at U-M Matthaei Botanical Gardens. His team also is connecting with conservation coalitions to develop a system for gasifying invasive species, like honeysuckle and buckthorn, and generating funds through electricity for those organizations. In fact, WDI was recently awarded a grant from the Michigan Translational Research and Commercialization (MTRAC) Innovation Hub for AgBio at Michigan State University to advance this work.
“It’s exciting to take a product from pilot scale through the commercialization process,” said Sachin Nijhawan, a research fellow with WDI’s energy sector who is helping to guide the project. “The gasification technology has been used for many years, but this new product has features that make it best suited for the agricultural feedstocks, is the right size and creates a best-in-class product that has immense market potential to make this is a viable business.”
Growing Small Farms with Sustainable Practices
He’s not the only one who sees growth on the horizon. “The potential global impacts could be huge,” Gorodetsky said. “Right now, we’re focusing on a few initial installations, but it could work with many crops in any country.”
Alfaro agrees—and believes small- and medium-sized farms have the strongest market potential. “We often forget that food doesn’t always come from megafarms. It might come from small farms, and that’s the case in Africa, South America, Asia and the U.S. In fact, the United States classifies the majority of farms in America as small farms.” As the global population increases, he explained, the need for food will as well, and that food is not going to be grown in big farms that have already been industrialized. Alfaro says his solution can help SMEs increase their sustainability and production, and he’s on a mission to improve its effectiveness and spread the word.
To ensure MBRACE reaches its potential, Alfaro is partnering with a company to enhance the gasifier’s resulting biochar with biotechnology, making its impact on the farms even more substantial and improving its chances to lead a market that generated $530 million in 2019, according to Alfaro. The team is also searching for locations where the technology could succeed, knowing it can be adapted for use at any SME with crop residues. And the WDI team is supporting the project’s growth across low- and middle-income countries with its analysis, connections and resources.
“We’re really encouraged that this venture can be profitable, which is important to WDI’s mission of driving economic and social development through business,” Gorodetsky said. “MBRACE’s model centers on being self-sustaining, and that will help sustain its other important impacts.”
Note: this work is supported under the MTRAC Program by the State of Michigan 21st Century Jobs Fund received through the Michigan Strategic Fund and administered by the Michigan Economic Development Corporation.
Images of the gasification technology development and use in the field. Photos courtesy of Jose Alfaro.