The potential financial returns from the energy produced by 100 dairy cows are calculated from data in Table 3 and Table 3 and are summarised in Table 1 below. No account is taken of costs involved with connecting to the grid, maintenance, labour, depreciation, digester specification, requirement for additional storage tanks, cost of additional treatments (such as mechanical separation and pasteurisation) as well as any civil works required.
Table 1: Potential value of net energy returns from AD
This table is based on data from Table 2 and Table 3 and shows the potential value of net energy returns1 from AD of slurry produced by 100 dairy cows over 180 days (6 months) - ROCs valued at £32.69/MWh and assumptions for energy production as per Table 2
per 180 days
per 180 days
per 180 days
per 180 days
|CHP - 11p/kWh electricity exported; 35p/l oil
(electricity used to offset demand, with 10% parasitic losses, and Option 4 in Table 2)
|CHP – 4.5p/kWh electricity exported (Option 4 Table 3); 35p/l oil||£1,511||£1,098||£3,767|
|CHP - 12p/kWh electricity (9% increase); 50p/l oil (43% increase)||£4,030||£1,098||£1,654||£6,782|
|CHP - 15p/kWh electricity (36% increase); 47p/l oil (34% increase); 4p/kWh ROCs (33% increase)||£5,037||£1,343||£1,555||£7,935|
|Gas boiler only at 35p/litre oil||-||-||£2,909||£2,909|
1Net energy taken as energy available after AD process requirements for heat and electricity (see Table 2).
2ROCs are only on net electricity available after deducting parasitic losses in the plant.
Electricity and heat generation via a CHP produce a greater financial return than use of a gas boiler only (Table 4). However, depreciation and running costs for a CHP will be greater than those for a gas boiler. Offsetting electricity generated by a CHP against purchased electricity, as opposed to spilling to the grid, produces the best financial returns (Table 4). The main parameters affecting the amount of energy available for export as electricity and/or heat are: dry matter and type of feedstock, the volume of biogas produced per m3 of feedstock, the methane content of the biogas, the amount of electricity needed to run the plant and the efficiency of the CHP, e.g. if the slurry is only 4% dry matter rather than 8%, the energy required to heat the digester increases by approximately 4%, but the potential biogas production is reduced by 50%. Clearly the financial values of returns are sensitive to all the assumptions used in the calculations e.g. unit financial values attributed to energy and the quantities of energy produced.
The financial value of returns must be set against capital and running costs. Capital cost for the 175m3 mesophilic digester and CHP required for 100 dairy cows indicated in Table 2 could be in the order of £1,250 per cow. This cost excludes any civil works, additional digestate storage tanks, pre-treatment and post treatment technologies. Larger digesters cost less per unit volume than smaller digesters, thus decreasing the cost per animal or unit volume of feedstock. Capital cost for a digester and CHP suitable for 300 dairy cows could be in the order of £1,000 per cow.
Housing animals all year and digesting all the slurry produced will double the value of energy outputs from the digester, compared with digesting slurry produced over the winter housing period only. Therefore, housing animals all year and digesting the slurry produced will half the crude payback time (capital cost divided by annual financial returns). The crude payback for an on-farm AD for 100 dairy cows, at the financial returns indicated in Table 4 (row 1), could vary from 20 to 10 years depending upon whether the dairy cows are housed for six months or all year round. Larger sized digesters should give a shorter crude payback period than smaller digesters. For example, an on-farm AD for 300 dairy cows housed all year could give a crude payback of 7 years.
Financial returns from on-farm AD are dependent on many factors. The installation of an on-farm AD at Hillsborough will enable quantification of many of the operating parameters that are assumed in the above calculations. The information gained from this research will determine the feasibility of on-farm AD in Northern Ireland.
Further financial returns from AD are possible through attributing values to digestate, nutrient management, odour reduction and value added end products of mechanical separation. These returns are difficult to quantify.
Table 2: AD energy outputs from slurry
The data in this table is based on slurry produced by 100 dairy cows per day (1MJ x 3.6 = kWh). [Assuming one 550 kg dairy cow produces 66 kg slurry per day at 8% dry matter, i.e. no excessive dilution (derived from DARD, 2003)
|Parameter||AD energy outputs|
|Slurry input (t fresh at 8% dry matter/day)||6.6|
|Quantity biogas produced (m3/day)||106|
|Gross energy from biogas (MJ/day)||2,332|
|Gross energy produced by combined heat and power (CHP) unit (MJ/day)||1,982|
|Gross electrical energy produced by CHP (kWh/day)||208|
|Gross CHP continuous electricity generation by CHP (kWelectricity)||8.6|
|Gross heat energy produced by CHP (kWh/day)||344|
|Electrical energy to run plant (kWh/day)||21|
|Net electrical energy available for export produced by CHP (kWh/day)||186|
|Heat energy to heat digester (kWh/day)||206|
|Net heat energy available for export produced by CHP (kWh/day)||138|
|Net heat energy available for export produced by CHP(litres oil equivalent at 80% oil boiler efficiency/day)||18|
Table 3: Available Trading Options
This table is based on the Available Trading Options for Generation less than 100kW (Action Renewables, 2006).
|Option 1||Sell exported electricity to NIE PPB||No||Varies from 2p – 4.1p/kWh||NIE PPB|
|Option 2||Sell exported electricity to NIE PPB||Yes||5p/kWh||NIE PPB|
|Option 3||Obtain standard spill tariff for exported electricity, but sell ROCs independently||Yes||Revenue from electricity sales varies from 2p to 4.1p/kWh.
Revenue from ROC sales up to £40/MWh of exported electricity
|NIE PPB or a second tier supplier such as Airtricity, Energia or ESB|
|Option 4||Obtain a Sell and Buy Back Contract||Yes||Revenue from exported electricity sales of 4.5p/kWh
Revenue from ROC sales of £32.69/MWh of total electricity generated
|NIE Supply or a second tier supplier|