While it is technically feasible to convert cow manure to electricity on farms, the economic returns are highly dependent on a host of factors related to energy prices in a given area, according to an article in a recent American Dairy Association newsletter.

Researchers at the University of Vermont and the Central Vermont Public Service Corporation (CVPS) published a case study in the Journal of Dairy Science. They confirmed that the economic returns depend highly on the base electricity price; the premium paid for converted energy; financial supports from government and other agencies; and the ability to sell byproducts of the methane generation.

The CVPS Cow Power program assists farms in planning and installing anaerobic digesters and generators to convert cow manure into electricity, and market the resulting power to its customers. Dairy farms apply for grants from CVPS, government agencies and other organizations, and draw on their own funds and loans from local banks to install the necessary equipment. CVPS customers voluntarily participate in and agree to pay a premium of $0.04 per kWh for a proportion or all of their electricity use.

"With more than 4,600 CVPS electricity customers voluntarily paying $470,000 in premiums per year, the Cow Power program represents a successful and locally sourced renewable energy project with many economic and environmental benefits," states lead author Qingbin Wang, a professor in the Department of Community Development and Applied Economics, University of Vermont. However, the study found that because of the huge initial investment of about $2 million for equipment per farm, grants and subsidies from government agencies have been necessary; without them, few dairy farms are able to fund such a system. The price farmers received for their electricity and revenue from byproducts of the system were also critically important.

The case study suggests that relatively small changes in the premium price can have a significant impact on the cash flow of an average operation. Also, waste heat from biogas combustion can be captured and used on the farm and byproducts from the digester, in the form of animal bedding and compost, contributed significantly to the cash flow of farms – up to 26% of the total revenues in 2008.

Wang says the strong commitment and collaboration of utilities, dairy farmers, electric customers and government agencies at the state and local level are essential for any community interested in a locally sourced, renewable energy project like the CVPS Cow Power Program.

The article is "Economic Feasibility of Converting Cow Manure to Electricity: A Case Study of the CVPS Cow Power Program in Vermont," by Q. Wang, E. Thompson, R. Parsons, G. Rogers and D. Dunn. Journal of Dairy Science, Vol. 94, Issue 10 (October 2011), DOI 10:3168/jds.2010-4124. Published by Elsevier.