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Energy Outputs and Financial Returns of On-Farm Biodigester Systems in the United States: A Case Study in Vermont

Received: 20 February 2017     Accepted: 14 March 2017     Published: 11 April 2017
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Abstract

This study assesses the investments, energy outputs, and financial returns of on-farm anaerobic digester systems (ADS) by farm size through a case study in Vermont and discusses the potential policy implications. Detailed data on the initial investments, production of electricity and other marketable products, operational expenses, and income, collected through surveys of eight operating ADS on dairy farms in Vermont, are used to estimate the return on equity (ROE), return on assets (ROA), and other financial indicators for small, medium, and large farms. The primary survey data indicate that the average investment was $1.35 million for small and medium farms (75-500 cows) and $2.44 million for large farms (>500 cows). Financial analysis indicates that the ROE and ROA were 12.54% and 13.50% for large farms but only 0.73% and 1.07% for small and medium dairy farms, respectively. Whereas the technology of ADS developed in the United States seems to favor large farms in terms of both energy production and financial returns, the centralized ADS developed in Europe and low-cost mini digesters developed in China may have potentials for small and medium farms to develop more economically viable ADS in the United States.

Published in International Journal of Sustainable and Green Energy (Volume 6, Issue 2)
DOI 10.11648/j.ijrse.20170602.11
Page(s) 10-18
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2017. Published by Science Publishing Group

Keywords

Anaerobic Digester System, Renewable Energy, Dairy Farms, Economics, Vermont

References
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[2] MacDonald, J. M., O’Donoghue, E. J., McBride, W. D., Nehring, R. F., Sandretto, C. L., & Mosheim, R. (2007). Profits, Costs, and the Changing Structure of Dairy Farming (No. ERR-47). Economic Research Service / USDA.
[3] Wang, Q., Thompson, E., Parsons, R., Rogers, G., & Dunn, D. (2011). Economic feasibility of converting cow manure to electricity: A case study of the CVPS Cow Power program in Vermont. Journal of Dairy Science, 94 (10), 4937–4949. doi:10.3168/jds.2010-4124.
[4] U. S. Environmental Protection Agency. (2015). AgSTAR Digesters. Retrieved from http://www.epa.gov/agstar/agstar-data-and-trends.
[5] IEA Bioenergy. (2014). Economic Sustainability of Manure Based Centralised Co-Digestion. Retrieved from http://www.iea-biogas.net/files/daten-redaktion/download/publications/country-reports/november2013/Countryreport2013.pdf
[6] Wang, Q., Thompson, E. (pending). Converting animal manure into energy products through on-farm biodigesters: A comparative analysis of the development in the U.S. and China.
[7] Raker, M. (2011). CVPS Renewable Development Fund: Progress Report. CVPS Renewable Development Fund Executive Committee.
[8] U. S. Environmental Protection Agency. (2014). AgStar: Operating Anaerobic Digester Projects. Retrieved February 24, 2014, from http://www.epa.gov/agstar/projects/
[9] Kearney, T. E., Larkin, M. J., & Levett, P. N. (1993). The effect of slurry storage and anaerobic digestion on survival of pathogenic bacteria. Journal of Applied Microbiology, 74 (1), 86–93.
[10] Hogan, J. S., Smith, K. L., Hoblet, K. H., Todhunter, D. A., Schoenberger, P. S., Hueston, W. D., … Brockett, B. L. (1989). Bacterial counts in bedding materials used on nine commercial dairies. Journal of Dairy Science, 72 (1), 250–258.
[11] Rendos, J. J., Eberhart, R. J., & Kesler, E. M. (1975). Microbial populations of teat ends of dairy cows, and bedding materials. Journal of Dairy Science, 58 (10), 1492–1500.
[12] Noordhuizen, J., & Metz, J. H. M. (2005). Quality control on dairy farms with emphasis on public health, food safety, animal health and welfare. Livestock Production Science, 94 (1), 51–59.
[13] Nicholson, F. A., Groves, S. J., & Chambers, B. J. (2005). Pathogen survival during livestock manure storage and following land application. Bioresource Technology, 96 (2), 135–143. doi: 10.1016/j.biortech.2004.02.030.
[14] Raizman, E. A., & Wells, S. l. (2003). The Distribution of Mycobacterium avium paratuberculosis in the Environment and its Association with Infected Herds of Minnesota Dairy Farms. Retrieved from http://conservancy.umn.edu/handle/11299/108991
[15] Sischo, W. M., Atwill, E. R., Lanyon, L. E., & George, J. (2000). Cryptosporidia on dairy farms and the role these farms may have in contaminating surface water supplies in the northeastern United States. Preventive Veterinary Medicine, 43 (4), 253–267. doi: 10.1016/S0167-5877 (99)00107-5.
[16] Gould, B. (2012). USDA Dairy - Number of Operations by Herd Size. Retrieved from http://future.aae.wisc.edu/usda_dairy/dairy_data/index/2
[17] Penn State Extension. (2013). Farm-Based Anaerobic Digestion Practices in the United States — Biogas and Anaerobic Digestion. Retrieved from http://extension.psu.edu/energy/waste-to-energy/biogas/links/history-of-anaerobic-digestion/farm-based-anaerobic-digestion-practices-in-the-united-states
[18] Thompson, E., Wang, Q., Li, M. (2013). Anaerobic digester systems (ADS) for multiple dairy farms: A GIS analysis for optimal site selection. Energy Policy, 61, 114-124. doi: 10.1016/j.enpol.2013.06.035.
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[20] Bond, T., & Templeton, M. R. (2011). History and future of domestic biogas plants in the developing world. Energy for Sustainable Development, 15, 347–354. doi: 10.1016/j.esd.2011.09.003.
[21] Wilkie, A. C. (2005). Anaerobic digestion of dairy manure: Design and process considerations. Dairy Manure Management: Treatment, Handling, and Community Relations, 301–312.
Cite This Article
  • APA Style

    Qingbin Wang, Ethan Thompson, Laurel Valchuis, Robert Parsons. (2017). Energy Outputs and Financial Returns of On-Farm Biodigester Systems in the United States: A Case Study in Vermont. International Journal of Sustainable and Green Energy, 6(2), 10-18. https://doi.org/10.11648/j.ijrse.20170602.11

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    ACS Style

    Qingbin Wang; Ethan Thompson; Laurel Valchuis; Robert Parsons. Energy Outputs and Financial Returns of On-Farm Biodigester Systems in the United States: A Case Study in Vermont. Int. J. Sustain. Green Energy 2017, 6(2), 10-18. doi: 10.11648/j.ijrse.20170602.11

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    AMA Style

    Qingbin Wang, Ethan Thompson, Laurel Valchuis, Robert Parsons. Energy Outputs and Financial Returns of On-Farm Biodigester Systems in the United States: A Case Study in Vermont. Int J Sustain Green Energy. 2017;6(2):10-18. doi: 10.11648/j.ijrse.20170602.11

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  • @article{10.11648/j.ijrse.20170602.11,
      author = {Qingbin Wang and Ethan Thompson and Laurel Valchuis and Robert Parsons},
      title = {Energy Outputs and Financial Returns of On-Farm Biodigester Systems in the United States: A Case Study in Vermont},
      journal = {International Journal of Sustainable and Green Energy},
      volume = {6},
      number = {2},
      pages = {10-18},
      doi = {10.11648/j.ijrse.20170602.11},
      url = {https://doi.org/10.11648/j.ijrse.20170602.11},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijrse.20170602.11},
      abstract = {This study assesses the investments, energy outputs, and financial returns of on-farm anaerobic digester systems (ADS) by farm size through a case study in Vermont and discusses the potential policy implications. Detailed data on the initial investments, production of electricity and other marketable products, operational expenses, and income, collected through surveys of eight operating ADS on dairy farms in Vermont, are used to estimate the return on equity (ROE), return on assets (ROA), and other financial indicators for small, medium, and large farms. The primary survey data indicate that the average investment was $1.35 million for small and medium farms (75-500 cows) and $2.44 million for large farms (>500 cows). Financial analysis indicates that the ROE and ROA were 12.54% and 13.50% for large farms but only 0.73% and 1.07% for small and medium dairy farms, respectively. Whereas the technology of ADS developed in the United States seems to favor large farms in terms of both energy production and financial returns, the centralized ADS developed in Europe and low-cost mini digesters developed in China may have potentials for small and medium farms to develop more economically viable ADS in the United States.},
     year = {2017}
    }
    

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  • TY  - JOUR
    T1  - Energy Outputs and Financial Returns of On-Farm Biodigester Systems in the United States: A Case Study in Vermont
    AU  - Qingbin Wang
    AU  - Ethan Thompson
    AU  - Laurel Valchuis
    AU  - Robert Parsons
    Y1  - 2017/04/11
    PY  - 2017
    N1  - https://doi.org/10.11648/j.ijrse.20170602.11
    DO  - 10.11648/j.ijrse.20170602.11
    T2  - International Journal of Sustainable and Green Energy
    JF  - International Journal of Sustainable and Green Energy
    JO  - International Journal of Sustainable and Green Energy
    SP  - 10
    EP  - 18
    PB  - Science Publishing Group
    SN  - 2575-1549
    UR  - https://doi.org/10.11648/j.ijrse.20170602.11
    AB  - This study assesses the investments, energy outputs, and financial returns of on-farm anaerobic digester systems (ADS) by farm size through a case study in Vermont and discusses the potential policy implications. Detailed data on the initial investments, production of electricity and other marketable products, operational expenses, and income, collected through surveys of eight operating ADS on dairy farms in Vermont, are used to estimate the return on equity (ROE), return on assets (ROA), and other financial indicators for small, medium, and large farms. The primary survey data indicate that the average investment was $1.35 million for small and medium farms (75-500 cows) and $2.44 million for large farms (>500 cows). Financial analysis indicates that the ROE and ROA were 12.54% and 13.50% for large farms but only 0.73% and 1.07% for small and medium dairy farms, respectively. Whereas the technology of ADS developed in the United States seems to favor large farms in terms of both energy production and financial returns, the centralized ADS developed in Europe and low-cost mini digesters developed in China may have potentials for small and medium farms to develop more economically viable ADS in the United States.
    VL  - 6
    IS  - 2
    ER  - 

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Author Information
  • Department of Community Development and Applied Economics, University of Vermont, Burlington, USA

  • Department of Community Development and Applied Economics, University of Vermont, Burlington, USA

  • Department of Community Development and Applied Economics, University of Vermont, Burlington, USA

  • Department of Community Development and Applied Economics, University of Vermont, Burlington, USA

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