Economic implications of anaerobic digesters on dairy farms in Texas

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Title: Economic implications of anaerobic digesters on dairy farms in Texas
Author: Jackson, Randy Scott, Jr.
Abstract: Historically , air and water have been considered common property resources and , therefore , over utilized as waste receptors . Dairy waste is a leading environmental concern in the North Bosque River watershed in Texas . Changing societal attitudes are forcing dairies and policymakers to balance environmental concerns with farm profitability . Dairies are entering a realm filled with technologies to combat waste concerns . Anaerobic digester technology may play a role in helping dairies balance profit and the environment . Digesters capture methane from livestock waste and transform it into electricity which can be sold to utilities or used on -farm . Because a digester facility is confined , air and water pollution can be reduced . Technological advancement and institutional factor changes allowing the sale of on -farm produced electricity and green power requirements have increased the economic feasibility of digesters . The study of the economic implications of anaerobic digesters for Texas dairies provides producers and policymakers with information to make good decisions concerning adoption and subsidization of this technology . At the beginning of this study , no digesters were operating in Texas . Dairies operating digesters in four states , therefore , were interviewed on -site to provide necessary data . The expected net present value , E (NPV ) , of a plug -flow digester is negative with and without selling electricity , indicating it should not be constructed based strictly on its financial contribution . At the current electricity -selling price , digesters are less economically feasible than current waste management strategies , lagoons , even after considering potential environmental penalties . However , selling electricity and capturing by -product heat for cost savings makes the digester's E (NPV ) less negative than lagoons . The E (NPV ) of a covered lagoon digester is positive . This indicates digesters are a potentially feasible waste management strategy . For plug -flow digesters to show a positive E (NPV ) , the selling price needs to be approximately 82 .38 % higher than the current price . The breakeven selling price is 12 % higher than the current price . Below the breakeven price , lagoons have a larger E (NPV ) than plug -flow digesters , therefore making lagoons the preferred waste management strategy . Results suggest changes in rules and technology efficiency make digesters economically competitive with current waste management systems .
URI: http : / /hdl .handle .net /1969 .1 /5844
Date: 2007-09-17

Citation

Economic implications of anaerobic digesters on dairy farms in Texas. Available electronically from http : / /hdl .handle .net /1969 .1 /5844 .

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