Assessing the Financial Implications of Selling Dairy Digester-Generated Electricity to the Electric Grid
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The primary objective in this project is to evaluate the economic implications of implementing an anaerobic digester with respect to the expenses and costs required to fund the system. The study assumed that all electricity generated by the anaerobic digester is sold directly to the grid. In this fashion, the study was able to determine the potential revenue when solely relying upon the market demand for electricity. By studying the previous market demand for electricity, it was found that the market demand of electricity ($/kWhr) in some cases can exceed the previously assumed value ($0.05/kWhr). From the LMBP prices collected (July 2005 ? August 2006), it was found that the market demand for electricity can sometimes exceed $0.18/kwHr. Additionally, the current analysis of historical market demand reveals that there is a steady increase in demand following each year. This further shows that the potential revenue that can be generated by selling AD generated electricity to the grid can be greater than previously expected. To further utilize this increase in expected revenue, it is higher recommended to determine potential options to increase biogas production rates to generate higher annual revenues beyond that of the annual expenses required to operate the system. The current analysis shows that food substrates have the potential to dramatically increase biogas production rates and revenue generation beyond the respective annual expenses required. This has the potential to help increase the annual net gain, and reduce the simple payback period. Additionally, the data reveal that biogas production rates can help to determine a proper engine-generator set to use. Assuming that the desired engine-generator set is unavailable, the current study shows that a multiple engine-generator set has the potential to produce the same amount of electricity and revenue as the desired engine-generator set.
dissertation or thesis