Economic feasibility of converting cow manure to electricity: A case study of the CVPS Cow Power program in Vermont

Abstract

A case study of the Central Vermont Public Service Corporation (CVPS) Cow Power program examines the economic feasibility for dairy farms to convert cow manure into electricity via anaerobic methane digestion. The study reviews the mechanism for CVPS, dairy farms, electricity customers, and government agencies to develop and operate the program since 2004, examines the costs and returns for the participating dairy farms, and assesses their cash flow over a period of 7 yr under different scenarios. With 6 dairy farms generating about 12million kilowatt-hours of electricity per year and more than 4,600 CVPS electricity customers voluntarily paying premiums of $0.04 per kilowatt-hour, or a total of about $470,000 per year, the CVPS Cow Power program represents a successful and locally sourced renewable energy project with many environmental and economic benefits. Factors for the successful development and operation of the program include significant grants from government agencies and other organizations, strong consumer support, timely adjustments to the basic electricity price paid to the farms, and close collaboration among the participating parties. This study confirms that it is technically feasible to convert cow manure to electricity on farms, but the economic returns depend highly on the base electricity price, premium rate, financial supports from government agencies and other organizations, and sales of the byproducts of methane generation.