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allows farms to sell whatever electricity they cannot use themselves. As large farms have more excess electricity, they gain more when a market for it is created. To gain an appreciation for this numerically, compare the increase in electric margin (on an absolute, per cow, or per kW, basis) when switching from an inflexible to a flexible regime, across farm sizes. Finally, we can gain a very loose sense of profitability. Given the probable declining average cost of building the system, it seems likely that Dr. Fick’s estimated fixed of $660 per cow is a little low for the farms we are looking at. Tinesdale farm, with 1800 cows, invested about $1,000 per head. Given that this is one of the first generation of commercial digesters, I suspect that in the future the costs will come down. From this, I guess that $1,000 per cow may be an appropriate number for smaller farms. Given this, and assuming an interest rate of 10%, I estimate that in order to break even on the electrical output alone a farm would have to obtain an electric margin of at least $100 per year per cow. From table 6 it follows that a digester would turn a profit on its electric output alone at 10% interest only if ps=0.09$/kWh. This is higher than a commonly quoted figure of 0.06$/kWh. However, if I reduce my estimated fixed cost to $660 per cow, all the farm sizes considered are able to turn a profit at 0.06$/kWh. Given my sense of the fixed cost structure, though, I am inclined to suggest that smaller farms will not be able to break even on their electricity supply alone at 0.06$/kWh. All this said, it is imperative that conclusions about the economic feasibility and desirability of this technology not be drawn from these figures. In addition to electricity there remain five outputs of a digester that I have been unable to value: bedding/fertilizer, heat, water, odor reduction and environmental benefits. The addition of these benefits will make digesters economically feasible at less generous rate structures. Further, reducing odors and other externalities associated with dairy farming may make large dairy farms more acceptable. If so, this may help to reduce further the cost of milk if there are additional scale economies in the dairy sector to exploit. The likely presence of scale economies in digester size also points to one important policy option. Smaller dairy farms could utilize cooperatively owned digesters to exploit potential scale economies. This might not just render them as competitive as larger farms. Under rate regimes where psPDF Image | The Economics and Feasibility of Electricity Generation using Manure Digesters on Small and Mid-size Dairy Farms
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