In the dairy industry, the production of biogas can be profitable, even for small farms
Dairy farms must deal with wastewater that’s particularly high in organic matter and that can be challenging to deal with. However, establishing an on-farm anaerobic digestion plant that generates biogas from cattle slurry offers several benefits:
- It captures methane and converts it into a renewable source of energy that can be used to replace fossil fuels used for heating or as a source of electricity.
- It prevents methane, a potent greenhouse gas, from escaping into the atmosphere.
- Digestate, the wet material left over from the digestion process, can be processed for use as a natural fertilizer to replace carbon-rich chemical fertilizers. This fertilizer is more eco-friendly than undigested cattle slurry because weed seeds, pathogens, and odor-generating bacteria are killed in the AD process, and nitrate pollution of waterways is reduced.
The initial investment required to establish an on-site anaerobic digestion plant on smaller dairy farms may pose a challenge to farmers and may not be recouped that readily. But if farmers do their homework, anaerobic digestion can still be a viable proposition.
How Much Does It Cost?
According to a 2020 report from the National Westminster Bank, the estimated costs associated with establishing an anaerobic digester on a small dairy farm in the United Kingdom range from 3,000-6,915 pounds sterling ($3,610-8,320) per kWe (kilowatt of electric capacity).
Farmers must also factor in costs associated with conducting a feasibility study and environmental or other assessments, as well as acquiring necessary planning permissions and licenses. These additional costs typically range from around 10-15% of the overall cost.
Working on a rule of thumb that slurry from 200 dairy cows will require a digester capacity of 200 m3 and produce about 20 kWe of power continuously, the minimum cost to set up a digester of this capacity would be 66,000 pounds, or about $80,000.
Because the digester will be the greatest expense, it’s important that farmers carefully consider their options. Small-scale modular biogas plants cost far less than larger systems and may be all that’s necessary for a small dairy farm. Farmers can also cut costs by using their own farm machinery and workers for any civil excavation work needed.
Income can be generated from selling methane-rich biogas, which can be used to generate electricity, provide heating, and even power the anaerobic digestion process. The biogas can be upgraded to remove impurities — such as hydrogen sulfide, carbon dioxide, and water — and then sold for use in the natural gas grid, or it can be compressed to power vehicles. Many countries offer incentives for using renewable energy, which farmers can tap into to further increase profitability.
The digestate left over can be used as a nutrient-rich fertilizer, either sold or used on the farm.
ROI and Operating Costs
Anaerobic digester projects commonly yield a return on investment in two to five years, contingent on factors such as organic loading and capital expenses. Also, in the United States, a company’s federal tax liability can be offset through incentives in the Investment Tax Credit (ITC). In terms of operational expenses, traditional aerobic treatment methods incur a range of $0.01 to $0.05 per gallon ($5.67 per thousand gallons) of treated wastewater. In contrast, anaerobic digestion not only reduces ongoing costs but can also generate income, typically around $0.39 per thousand gallons of treated wastewater.
Fluence’s AD with sludge concentration, a complete mixed process with anaerobic biomass recirculation, can handle liquid wastes with a COD of 40,000 mg/L and higher, and offers the best solution for dairy farms.
Biogas produced in an anaerobic digester can contain elevated levels of hydrogen sulfide, which can damage cogenerators and boilers, and must be removed. Fluence’s unique biogas desulfurization technology is one of the most efficient and cost-effective solutions on the market.
To be financially viable, the anaerobic digestion system selected needs to improve farm efficiency without incurring a greater cost per cow than the current slurry storage, treatment, and disposal system.
Fluence’s team of experts can evaluate the financial viability of a project, calculate capital expenses, propose solutions to reduce operating costs, and provide an estimated return on investment. Contact Fluence to find out how our on-farm waste-to-energy solutions can improve your bottom line.