An Analysis of Energy Production Costs from Anaerobic Digestion Systems on U.S. Livestock Production Facilities

Report Preface: This technical publication reviews the potential of using manure anaerobic digestion (AD) systems on livestock production facilities to produce electricity or biogas to supply farm energy needs. An in-depth biogas production cost analysis is provided to assess the feasibility of utilizing an anaerobic digester for on-farm purposes. The cost of electricity and biogas production using manure-based AD systems is presented based on an analysis of 38 installations in the United States. Both electricity and biogas costs from these systems were compared to the current U.S. cost of electricity, natural gas, and liquid propane (L.P.) in dollars per gigajoule of energy content. This analysis shows that AD system capital cost can be reduced by approximately 36 percent if no electrical generation system is installed. The economic advantage of using biogas at the point of generation is more apparent in remote locations where the costs of natural and L.P. gas are higher than standard markets. The cost analysis presented in this document suggest that lower cost AD systems currently employed on United States farms can provide biogas that is competitive or lower in cost than current United States commercial natural gas prices, if the biogas is used directly on site in space heaters or boilers without excessive additional gas upgrading (cleaning and conditioning) costs. Producers interested in manure AD systems should evaluate the potential of using biogas produced on site as an on-farm energy source alternative (e.g., heating water, heating animal housing, etc.) to generating electricity. Lastly, general information relevant to AD system functionality, biogas production computations, and on-farm biogas use is provided for the landowner.