Economics, Feasibility, & Policy

Economics Relating to Anaerobic Digestion

The economics of anaerobic digestion (AD) systems vary widely and depend upon many variables. The consistent issues that arose in New York are:

Electricity prices paid to producers do not allow for economic viability for the AD system
Cost estimates for projects have sometimes been unrealistic
Tipping fees can offset the operational and management costs of the AD system
Lenders may be unfamiliar with the complexity of AD systems

Anaerobic manure digester on a dairy farm

Feasibility of Anaerobic Digestion Systems

Before constructing and operating an anaerobic digester, it is best to first ensure that the process is feasible for the farm.

Economic Feasibility Case Study of Co-Digestion of Manure and Food Waste on a NNY Dairy - (2023)
Combining Anaerobic Digestion and Hydrothermal Liquefaction in the Conversion of Dairy Waste into Energy: A centralized Case study for New York State - Nazih Kassem (2018)
Small Farms AD Report - Tim Shelford and Curt Gooch (2012)
Feasibility Study of Anaerobic Digestion in Salem, NY - Kimberly Bothi and Brian Aldrich (2005)
Feasibility Study of Anaerobic Digestion in Perry, NY - Kimberly Bothi and Brian Aldrich (2005)
AD Performance Goals: AD Effect on System Components and Costs - Curt Gooch and David Ludington (2005)
Feasibility Studies of Anaerobic Digestion Presentation - David Ludington - DLtech, Inc. (2004)

Policy Relating to Anaerobic Digestion

The policy that both supports and governs anaerobic digestion can be confusing to navigate. On this webpage, we have listed resources to help understand these topics.

Analysis report: California Low Carbon Fuel Standard Carbon Intensity Applied to New York State Dairy Manure Anaerobic Digestion to Renewable Natural Gas - Lauren Ray and Peter Wright (2023)
Two-part fact sheet: California Low Carbon Fuel Standard Carbon Intensity Applied to New York State Dairies - Lauren Ray and Peter Wright (2022)
Monetizing Electricity Produced by Farm-Based Anaerobic Digestion in New York - Lauren Ray and Curt Gooch (2020)
Meeting New York State's Energy, Environmental and Economic Goals While Strengthening Dairy Farms Through the Widespread Adoption of Manure-Based Anaerobic Digestion Technology - Jennifer Pronto, Curt Gooch, and Peter Wright (2017)
New York State Remote Net Metering - Jennifer Pronto and Curt Gooch (2012)
NYS Public Service Commission Standardized Interconnection Requirements

Economic Resources

Simple Cost-Benefit Analyses of Biogas Use and Tariff Options for an Existing Anaerobic Digester System on a New York State Dairy Farm (2020)
Estimating the Economic Value of the Greenhouse Gas Reductions Associated with Dairy Manure - Peter Wright and Curt Gooch (2017)
Inputs for Biogas Economic Assessment - Brent Gloy (2008)
Creating Renewable Energy From Livestock Waste Overcoming Barriers to Adoption - Brent Gloy (2008)
Economic Analysis of Anaerobic Digestion Systems and Financial Incentive - Brent Gloy (2008)
An Economic Comparison of Two Anaerobic Digestion Systems on Dairy Farms - Peter Wright and Scott Inglis (2003)

Digester Simulation Module and Greenhouse Synergy

Partnering Commercial Greenhouses with Dairy Manure-Based Anaerobic Digestion Systems - Quantifying Energy Synergies - Timothy J. Shelford, Curt A. Gooch, and Peter E. Wright (2016)
Coupling Dairy Manure Anaerobic Digesters with Commercial Greenhouses - An Assessment of Technical and Economic Feasibility - Timothy J. Shelford, Curt A. Gooch, and Peter E. Wright (2015)

Biogas Economic Assessment Tools

The first tool is designed for use with Farm Ware 3.1 which was developed by the United States Environmental Protection Agency and is available for free download at www.epa.gov/agstar/resources/handbook.html. This analysis uses the outputs of Farm Ware 3.1 to conduct a financial analysis. This worksheet does not guide the user through the inputs required to conduct a Farm Ware assessment.
The second tool allows the user to input more detailed information about their specific anaerobic digestion project. The tool requires that the user possess information about the capital and operating costs for the project. It utilizes a variety of assumptions to create estimates of the biogas and electrical generation potential of the project.

The worksheets itemize the inputs that one would need to conduct an economic assessment of a biogas project. The inputs are designed for use with two Microsoft Excel spreadsheets.

The inputs are used to create proforma financial statements for the biogas project and to conduct a discounted cash flow analysis of the project. A basic understanding of financial concepts is required to understand and interpret the outputs of the spreadsheets. These tools should only be used for an initial analysis of a biogas project. A more thorough analysis is required to establish the expected profitability of the project.

Users should carefully consider the validity of the assumptions utilized in the assessment before making investment decisions. In other words, these tools should be used with caution and no warranty is made regarding the validity of outputs obtained and decisions made based upon the model. The assessment does not consider the impact of any taxes that may be generated or saved by the project. These values may significantly alter the profitability of the project. The spreadsheets do not currently consider inflation or allow for changing prices over time. These assumptions can be modified with modest alterations to the spreadsheets.

In both spreadsheets, users should be careful to enter parameter values that correspond to the units listed in the spreadsheet. The spreadsheet will not identify inappropriate units or entries that are unrealistic.