Costs of Producing Energy in Dutch Dairy Chains

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. Current analyses focus on biogas. To evaluate the project’s feasibility 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”. Data stem among others from 23 biogas plants in the Netherlands. Anticipating that CHP-models and green gas models occur with a likelihood of 40% and 60% respectively, the total number of biogas plants at dairy farms would amount to 463. There would however be an expected deficit of Euro 157 million over the project’s life time, i.e. Euro 0.02 per liter of milk. Fully switching to green gas is expected to reduce the number of plants to 438 with an aggregated financial surplus, i.e. of Euro 368 million. Findings are useful in current stakeholder debates on dairy chains’ sustainability, and, more specifically, level of subsidies, availability of co-digestion materials and market opportunities of digestate.