The Cheese Niche: GreenWhey Energy Converts Dairy to Electricity

GreenWhey Energy stands on the leading edge of an industry niche for turning dairying and other food byproducts into electricity and high-quality biosolids.
The Cheese Niche: GreenWhey Energy Converts Dairy to Electricity
The GreenWhey Energy team includes, from left, Tim Peaster, co-founder and chief financial officer; Tom Ludy, co-founder and president; Beth Ludy, office manager; Eric Ludy, business development; and Kent Paulson and Jim Arnold, plant operators.

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Tom Ludy has been in the dairy business “since I was in diapers,” and now the industry has taken him in a new direction.

Ludy and two business partners own GreenWhey Energy, a startup company in Turtle Lake, Wisconsin, that uses a pair of anaerobic digesters to produce biogas from dairying waste and other food waste products. That gas is fed to engine-generators that produce electric power for sale to the local utility grid. The digesters also yield a high-quality biosolids product suitable for multiple soil conditioning and fertilizer uses.

Ludy’s business partners are Larry and Tim Peaster, who are father and son. Larry is retired, and Tim owns Northern Liquid Waste Management, a company important to the GreenWhey story.

The company’s story might be a classic example of necessity being the mother of invention. GreenWhey at least partly owes its existence to a shortage of land on which to apply biosolids. That was brought home when Ludy’s Turtle Lake cheese plant exceeded production forecasts by an astonishing amount.

It has been a continuing journey and learning experience, but Ludy is upbeat about the prospects for GreenWhey, and he’s already thinking about new markets for what it produces.

Third generation

Ludy’s grandfather started the family dairy business 85 years ago and later passed it on to Ludy’s father. The family sold the business in 1998, and Tom Ludy built a new cheese plant in Turtle Lake in 2001: Lake Country Dairy, a maker of Italian-style hard cheeses.

Partly to accommodate the new company, the Village of Turtle Lake built a new wastewater treatment plant. But the cheese plant got so busy so fast that its wastewater soon overwhelmed the municipal operation. “It wasn’t 6 months old when we had the treatment plant at 140 percent of capacity,” Ludy says.

Regulators from the Wisconsin Department of Natural Resources sent warning letters. Ludy sought to mitigate the problem by hauling liquid waste away from the cheese plant and separating out spreadable solids to take the pressure off the treatment plant. But he soon realized it was becoming more and more difficult to land-apply solids in the area.

“We were running out of fields to spread it on,” Ludy says. A big reason was northern Wisconsin’s tourist trade. As tourism expanded, farmland was bought up for resorts and homes. “The people buying up the land don’t want you spreading biosolids on it,” Ludy says. And changing farming practices also reduced the use of some biosolids.

Helpful connections

Through his years in the dairy industry, Ludy had made friends with waste-hauling contractors. Conversations with those haulers helped him launch a project to find alternative uses for the dairy waste products. Ludy and his business partners ruled out an ethanol plant — one potential use for dairy waste — because some of the waste that process yields “is worse than what you started with,” Ludy says.

Further research led to a company in New York state called Ecovation, founded by a professor at Cornell University in Ithaca. Originally, Ludy and partners were interested in the company’s new digester, designed specifically to generate methane from dairy waste. But even as they explored that, Ecovation was purchased by Ecolab, a multinational corporation with operations in many related areas. In the end, GreenWhey purchased a pair of UAC upflow digesters developed in Belgium; Ecolab has U.S. construction and distribution rights for the product line.

In 2009, Ludy sold the cheese plant and began putting together GreenWhey. As originally designed, the plant would handle only dairy byproducts, including whey, lactose and permeate. Then came another surprise: “The whey, permeate and lactose markets in the dairy industry changed,” Ludy says. “Lactose became valuable. Instead of us getting paid for it, we basically paid for it.”

Branching out

GreenWhey shifted gears. With the help of Northern Liquid Waste Management, the company expanded its feedstock to include other materials. Now GreenWhey takes in liquid waste from breweries and from a tomato paste canner, a salad dressing distributor and soda bottlers. “We are basically a wastewater treatment plant,” says Ludy.

Dairy byproducts still account for about 60 percent of GreenWhey feedstock. Fortunately, the Ecolab digesters could take a wider range of feedstock than the original digesters the company had considered. GreenWhey wants liquid waste that is high in BOD and COD, and the digestion of those materials produces substantial methane.

The digesters are not designed to take on large amounts of fats, oils and greases because the GreenWhey plant has only one pretreatment tank. “We can handle some fat — we just have to monitor what we take in,” Ludy says. “Sugar and protein in the feedstock is what does our digester best. Aside from that, anything that’s pumpable and mixes with water we can take in this plant.” Powdered products such as whey and milk powders are welcome, as they simply need to be rehydrated.

Biosolids strategy

The plant doesn’t take in human or animal waste or wastewater that contains quaternary ammonium salts (quat sanitizers). High concentrations of salts aren’t good, either. Chlorides must be monitored the way fats are because the digester “is very sensitive to a high-salt diet,” Ludy says. “It’s similar to a human that way. If you feed it something wrong, it will get sick.”

A full-service lab on site samples the waste materials at 14 points before the digester and another six points afterward. The absence of human and animal waste allows the digested biosolids to be used in gardening. The biosolids from the digester are “top-grade topsoil,” Ludy says. “Employees have worked with it in their gardens, in their yards. It’s beautiful stuff.”

Liquid wastes come in mostly by truck, although some are sent through a pipeline from Ludy’s former company, Lake Country Dairy, next to GreenWhey’s site. Regardless how it is delivered, the first stop for the waste is a series of holding tanks. “We can take in 350,000 gallons a day, seven days a week, of high COD, high BOD wastewater,” Ludy says. When it’s time to process the waste, it is pumped first to a pretreatment tank, then it goes on to the digesters.

When digestion is complete, the biosolids, still in highly liquid form, pass over a belt filter press for dewatering. The result is a storable wet cake, almost like clay, that can be stored up to six months on site. The methane is drawn off the top of the digester and conditioned as needed to remove moisture.

Then the methane is fed directly to a pair of 2,200 hp Caterpillar model 3520 engines of the type often installed on landfills to generate electricity. They produce 20 million Btu/hr. The engines drive generators that produce electricity for sale to an Xcel Energy power grid under a renewable energy tariff.

GreenWhey also received a renewable energy grant in lieu of tax credits through the American Recovery and Reinvestment Act of 2009.

The 3.2 MW engine-generators produce enough electricity to power a city of about 3,000 people. Running around the clock, they produce 76.8 MWh per day, or 28,032 MWh per year. They also produce 20 million Btu/hr for digester heating and other purposes, significantly helping project economics.

GreenWhey uses Northern Liquid Waste Management to haul the material from the source to the GreenWhey plant. Transportation costs are built into the overall tipping fees. The fee also is adjusted based on what the material contains; suppliers of wastes high in COD, particularly soluble COD (such as corn syrup), pay less because of the materials’ gas generating potential.

Keeping it green

GreenWhey’s digestion process yields water at up to 325 gpm. The facility does not have a permit for above-ground discharge but can recycle it for non-potable purposes. “The only well water we use in this plant is to flush our toilets and for our drinking fountain,” says Ludy. “Everything else is hauled in and reused.”

The digester’s plant location near Ludy’s former cheese plant and within reach of a number of other dairies is beneficial. There are nearly a dozen dairy plants within 50 miles. Based on current capacity, Ludy believes three more digester plants of the same size strategically placed would accommodate nearly all the liquid waste byproducts from Wisconsin dairy producers. More varied feedstock might create much more room to grow. The company is looking at feedstocks such as spoiled produce from grocery stores and other food wastes.

The company has been studying equipment that “basically purees everything down to a liquid that would go into our digesters,” says Ludy. “That’s very much in development.” As various forms of biofuel enter public awareness, he believes GreenWhey is well positioned for success.

While the engines use all the methane generated for now, the company is exploring compression and bottling of excess gas that might be generated. Ludy expects the plant to hit capacity in the next year or so. The operation was sized to take up to 70 percent of the output of about eight to 10 area dairy plants. If it reaches that point, GreenWhey will need to consider alternatives, which could include a plant expansion or simply bringing in more concentrated, dewatered feedstocks.

For the moment, GreenWhey is focusing on what it knows, even as the company considers new outlets for its end product. Slow and steady seems the likely approach, says Ludy: “This is a very new industry that basically is just getting off the ground.”   


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