Methane Digester Economics 101

A famous and humorous series of children’s books gently introduces children to the idea that all animals (including little boys and girls) need some outlet for food that is eaten, and that the body is but a weigh station for much of the content that goes into the mouth ( The Gas We Pass and Everyone Poops ). While providing an excellent entrée to broaching this delicate though universal topic among children, these authors have yet to tackle the sticky issue of what comes next, i.e., what to do with the natural outcome of all this eating.

Within the livestock sector, one idea that has surfaced is to harness manure for its energy content through the on-farm installation of methane digesters. With energy prices poised to soar upon an economic recovery, and ever-increasing regulatory and societal pressures to handle manure carefully, any new technology with the potential to solve two pressing issues at one time will receive intense consideration. However, economic considerations are crucial when evaluating any new technology.

Bill Lazarus at the University of Minnesota, along with several colleagues, has prepared several useful information pieces that explore the economic aspects of methane digesters. For an overview of national issues, consider Lazarus’s USDA report

“This report summarizes the existing literature and analytical perspectives on farm-based digesters, highlights major efforts in the United States and Europe to expand digester usage, and discusses key policy issues affecting digester economics. The study serves as a snapshot overview of the industry. Digesters are fairly capital-intensive when viewed primarily as an energy source. On a strictly market basis, current U.S. average electricity prices do not appear to provide sufficient economic justification for digesters to move beyond a fairly limited niche. Digesters make the most sense today where the odor and nutrient management benefits are important, or where the electricity or heat has a higher-than-average value.”

For a view of issues at a state level, consider a report prepared by Bachewe, Lazarus and others for the Minnesota legislature : “ This review is prepared for a wide audience. The motivation for its preparation is a belief that Minnesota can improve the utilization of the manure and organic wastes that are byproducts of livestock farming and other activities, via the production of biogas that can be used to produce heat and electricity. A comparison is made between Minnesota and Denmark due to the many similarities between the two entities. Denmark serves as a role model for Minnesota in the number of central anaerobic digesters that it supports while Minnesota has none even though in terms of livestock and other organic waste production Minnesota has a similar potential to benefit from the development of central anaerobic digesters.”

Finally, if you want to run the numbers on whether a methane digester would be beneficial on your own farm, consider Lazarus’s excel spreadsheet that he describes as a “ Tool for doing rough initial calculations of annual costs and returns to be expected from owning and operating a methane digester on a dairy farm.”

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