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Costs of Producing Biogas at Dairy Farms in The Netherlands

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  • Gebrezgabher, Solomie A.
  • Meuwissen, Miranda P.M.
  • Oude Lansink, Alfons G.J.M.

Abstract

By 2020, Dutch dairy chains envisage to be self‐sufficient with regard to energy used by dairy farms and dairy processors. This would require dairy farms to produce 25 PJ per year, possibly by a combination of wind, solar and biogas. This paper focuses on biogas. To evaluate the project’s viability we estimated the expected technical and financial performance of 4 types of business models, i.e. “CHP‐farm”, “CHP‐large”, “green gas” and “central upgrading of green gas”. Data stem from among others 23 biogas plants in the Netherlands. Anticipating that CHPmodels and green gas models occur with a likelihood of 40% and 60% respectively, the total number of biogas plants would amount to 232 (1% of dairy farms), including a total of 5 million tons of manure per year (14% of all cattle manure in the Netherlands) and annual government subsidies of Euro 295 million. Aggregated annual profits are expected to be positive, but over the project’s total life time there is an expected deficit of Euro 262. For this to change costs of feedstocks or digestate disposal costs would for instance have to go down. Also fully switching to green gas models dampens the deficit. Results are used in current stakeholders debates on the organization of an “energy neutral dairy chain” in the Netherlands. Further analyses incorporating uncertainty around key technical and economic parameters including financial impacts of CO2‐reductions are underway.

Suggested Citation

  • Gebrezgabher, Solomie A. & Meuwissen, Miranda P.M. & Oude Lansink, Alfons G.J.M., 2010. "Costs of Producing Biogas at Dairy Farms in The Netherlands," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 1(1), pages 1-10.
  • Handle: RePEc:ags:ijofsd:91139
    DOI: 10.22004/ag.econ.91139
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    1. Unknown, 2008. "Institute of Agricultural Economics," Economics of Agriculture, Institute of Agricultural Economics, vol. 55(3).
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    1. Reise, Christian & Musshoff, Oliver & Granoszewski, Karol & Spiller, Achim, 2012. "Which factors influence the expansion of bioenergy? An empirical study of the investment behaviours of German farmers," Ecological Economics, Elsevier, vol. 73(C), pages 133-141.
    2. Dieu Linh Hoang & Chris Davis & Henri C. Moll & Sanderine Nonhebel, 2020. "Impacts of biogas production on nitrogen flows on Dutch dairy system: Multiple level assessment of nitrogen indicators within the biogas production chain," Journal of Industrial Ecology, Yale University, vol. 24(3), pages 665-680, June.
    3. Piwowar, Arkadiusz & Dzikuć, Maciej & Adamczyk, Janusz, 2016. "Agricultural biogas plants in Poland – selected technological, market and environmental aspects," Renewable and Sustainable Energy Reviews, Elsevier, vol. 58(C), pages 69-74.
    4. Valerii Havrysh & Vitalii Nitsenko & Yuriy Bilan & Dalia Streimikiene, 2019. "Assessment of optimal location for a centralized biogas upgrading facility," Energy & Environment, , vol. 30(3), pages 462-480, May.
    5. Reise, Christian & Liebe, Ulf & Mußhoff, Oliver, 2012. "Präferenzen von Landwirten bei der Gestaltung von Substratlieferverträgen für Biogasanlagen: Ein Choice-Experiment," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 61(3).
    6. Anna Gaviglio & Biagio Pecorino & Alessandro Ragazzoni, 2014. "Produrre energia rinnovabile nelle aziende agro-zootecniche. Effetti economici dalle novit? introdotte nella normativa del 2012," Economia agro-alimentare, FrancoAngeli Editore, vol. 16(2), pages 31-60.
    7. Gabriel Cucui & Constantin Aurelian Ionescu & Ioana Raluca Goldbach & Mihaela Denisa Coman & Elena Liliana Moiceanu Marin, 2018. "Quantifying the Economic Effects of Biogas Installations for Organic Waste from Agro-Industrial Sector," Sustainability, MDPI, vol. 10(7), pages 1-16, July.
    8. Reise, Christian & Liebe, Ulf & Musshoff, Oliver, 2012. "Design of substrate supply contracts for biogas plants," 2012 Conference (56th), February 7-10, 2012, Fremantle, Australia 124428, Australian Agricultural and Resource Economics Society.
    9. Reise, Christian & Liebe, Ulf & Mußhoff, Oliver, 2012. "Präferenzen von Landwirten bei der Gestaltung von Substratlieferverträgen für Biogasanlagen: Ein Choice-Experiment," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 61(03), pages 1-16, August.
    10. Rotunno, Paolo & Lanzini, Andrea & Leone, Pierluigi, 2017. "Energy and economic analysis of a water scrubbing based biogas upgrading process for biomethane injection into the gas grid or use as transportation fuel," Renewable Energy, Elsevier, vol. 102(PB), pages 417-432.

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