Predicting cost of dairy farm-based biogas plants: A North American perspective

Abstract

Livestock manure and organic agriculture wastes are an environmental challenge because they contribute to climate change by emitting greenhouse gases. Converting these organic wastes to biogas and bioenergy is a sustainable solution. Farmers, investors, and governmental departments involved in developing on-farm biogas projects need an informed decision-making process to fund such projects. Thus, estimating the required initial investment for a farm-based biogas plant is crucial. This study aims to develop two methods to estimate the cost of farm-based biogas projects, determine their economic viability, and predict the cost of each part of the plant and its related risks. A database for farm-based biogas projects in Canada and the USA was established and analyzed before developing the models. First, six mathematical models were developed using linear regression to predict the capital cost, engineering and design, operation and maintenance, gross revenue, and net profit using Monte Carlo simulation. Second, the probability of cost of components is calculated. The marginal error of cost prediction in initial modeling is about 7% in total, and the economic viability of a biogas plant for a farm housing less than 300 cows is questionable.

Keywords

• Biogas
• Cost
• Modeling
• Monte Carlo
• On-farm

References

1. [1] Smil, V. Energy Transitions: Global and National Perspectives. California, USA: ABC-CLIO, 2016.
2. [2] Gowreesunker, BL, Tassou, SA. The impact of renewable energy policies on the adoption of anaerobic digesters with farm-fed wastes in great britain. Energies 2016; 9(12): 1038. DOI: 10.3390/en9121038.
3. [3] Yang, L., Xiao,X, Gu, K. Agricultural waste recycling optimization of family farms based on environmental management accounting in rural china. Sustainability 2021; 13(10): 5515. DOI: 10.3390/su13105515.
4. [4] Mallon, S. The Financial Feasibility of Anaerobic Digestion for Ontario's Livestock Industries. Ontario, CANADA: University of Guelph, 2007.
5. [5] European Biogas Association, Statistical Report of the European Biogas Association 2018. Brussels, BELGIUM: European Biogas Association, 2018.
6. [6] Canadian Biogas Association. Biogas and Renewable Natural Gas in Ontario. Ontario, CANADA: Canadian Biogas Association, 2019.
7. [7] Yatchew, A, Baziliauskas, A. Ontario feed-in-tariff programs. Energy Policy 2011; 39(7): 3885-3893. DOI: 10.1016/j.enpol.2011.01.033.
8. [8] Kurbatova, TO. Economic benefits for producers of biogas from cattle manure within energy co-operatives in Ukraine. International Journal of Sustainable Energy Planning and Management 2018; 18: 69–80. DOI: 10.5278/ijsepm.2018.18.5.

9. [9] David R. Tyner and Matthew R. Johnson. A techno-economic analysis of methane mitigation potential from reported venting at oil production sites in alberta. Environmental Science & Technology 2018; 52(21): 12877-12885. DOI: 10.1021/acs.est.8b01345.
10. [10] Girouard, N, Labuhn, B, Tomasini, C. Environmental Performance Reviews. Manitoba, CANADA: Organisation for Economic Cooperation and Development (OECD), 2017.
11. [11] Wang, H., Zhang, S., Bi, X., & Clift, R. Greenhouse gas emission reduction potential and cost of bioenergy in British Columbia, Canada. Energy Policy 2020; 138: 111285. DOI: 10.1016/j.enpol.2020.111285.
12. [12] Montgomery, DC, Peck, EA, Vining, GG. Introduction to Linear Regression Analysis. CANADA: John Wiley & Sons, 2012.
13. [13] Pérez-López, P., Montazeri, M., Feijoo, G., Moreira, M. T., & Eckelman, M. J. Integrating uncertainties to the combined environmental and economic assessment of algal biorefineries: A Monte Carlo approach. Science of The Total Environment 2018; 626: 762-775. DOI:10.1016/j.scitotenv.2017.12.339.
14. [14] Uwineza, L, Kim, HG, Kim, CK. Feasibility study of integrating the renewable energy system in Popova Island using the Monte Carlo model and Homber. Energy Strategy Reviews 2021; 33: 100607. DOI:10.1016/j.esr.2020.100607.
15. [15] Amigun, B, Von Blottnitz, H. Capital cost prediction for biogas installations in Africa: Lang factor approach. Environmental Progress & Sustainable Energy: An Official Publication of the American Institute of Chemical Engineers 2009; 28(1): 134-142. DOI: 10.1002/ep.10341.
16. [16] Verma, S. Anaerobic Digestion of Biodegradable Organics in Municipal Solid Wastes. USA: Columbia University, 2002.
17. [17] Möller, K, Müller, T. Effects of anaerobic digestion on digestate nutrient availability and crop growth: A review. Engineering in Life Sciences 2012; 12(3): 242-257. DOI: 10.1002/elsc.201100085.
18. [18] Chen, Y, Cheng, JJ, Creamer, KS. Inhibition of anaerobic digestion process: a review. Bioresour Technol 2008; 99(10): 4044-4064. DOI: 10.1016/j.biortech.2007.01.057.
19. [19] Beddoes, JC, Bracmort, KS, Burns, RT, Lazarus, WF. An Analysis of Energy Production Costs From Anaerobic Digestion Systems on US Livestock Production Facilities. USA: NRCS Technical Note, 2007.
20. [20] Amigun, B, von Blottnitz, H. Capacity-cost and location-cost analyses for biogas plants in Africa. Resources, Conservation and Recycling 2010; 55(1): 63-73. DOI: 10.1016/j.resconrec.2010.07.004.
21. [21] Gooch, C., & Pronto, J. Capitalizing on Energy Opportunities on New York Dairy Farms. Newyork, USA: Cornell University Library, 2009.
22. [22] Canadian Biogas Association. Canadian Biogas Study Technical Document. Benefits to the Economy, Environment and Energy for the Canadian Biogas Association. Canada: Canadian Biogas Association, 2013.
23. [23] Palisade. Risk Analysis and Simulation Add-In for Microsoft® Excel Version 7. Newyork, USA: Palisade Corporation, 2016.
24. [24] Venslauskas, K, Navickas, K, Nappa, M, Kangas, P, Mozūraitytė, R, Šližytė, R, Župerka, V. Energetic and economic evaluation of zero-waste fish co-stream processing. International Journal of Environmental Research and Public Health 2021; 18(5): 2358. DOI: 10.3390/ijerph18052358.
25. [25] Salling, KB, Leleur, S. Transport appraisal and Monte Carlo simulation by use of the CBA-DK model. Transport Policy 2011; 18(1): 236-245. DOI: 10.1016/j.tranpol.2010.08.007.
26. [26] Davis, R, Teaching note—Teaching project simulation in Excel using PERT-beta distributions. Informs Transactions on Education 2008; 8(3): 139-148. DOI: 10.1287/ited.1080.0013.
27. [27] Amigun, B, Blottnitz, Hv. Investigation of scale economies for African biogas installations. Energy Conversion and Management 2007; 48(12): 3090-3094. DOI: 10.1016/j.enconman.2007.05.009.
28. [28] Elsasser, S. Anaerobic Digester Use in Dairy Farms in the United States. UNLV Theses, Dissertations, Professional Papers, and Capstones 2006; 331. DOI: 10.34917/1487202.
29. [29] Good, J. Carbon Pricing Policy in Canada. Ottawa, CANADA: Library of Parliament, 2021.
30. [30] Werner, E. Strehler, B. British Columbia On-Farm Anaerobic Digestion Benchmark Study. British Columbia, Canada: Agriculture and Agri-Food Canada, 2007.