A case study of the Central Vermont Public Service Corporation (CVPS) Cow Power program examines the economic feasibility for dairy farms to convert cow manure into electricity via anaerobic methane digestion. The study reviews the mechanism for CVPS, dairy farms, electricity customers, and government agencies to develop and operate the program since 2004, examines the costs and returns for the participating dairy farms, and assesses their cash flow over a period of 7 yr under different scenarios. With 6 dairy farms generating about 12 million kilowatt-hours of electricity per year and more than 4,600 CVPS electricity customers voluntarily paying premiums of $0.04 per kilowatt-hour, or a total of about $470,000 per year, the CVPS Cow Power program represents a successful and locally sourced renewable energy project with many environmental and economic benefits. Factors for the successful development and operation of the program include significant grants from government agencies and other organizations, strong consumer support, timely adjustments to the basic electricity price paid to the farms, and close collaboration among the participating parties. This study confirms that it is technically feasible to convert cow manure to electricity on farms, but the economic returns depend highly on the base electricity price, premium rate, financial supports from government agencies and other organizations, and sales of the byproducts of methane generation.
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.
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