Dairy electricity: powering EVs brings 'lucrative incentives' to US farmers

By Teodora Lyubomirova

- Last updated on GMT


Related tags regenerative agriculture Climate change Sustainability Agriculture

Power generated by cow manure digesters can now power electric vehicles, netting extra cash for farmers.

Dairy manure is the US’ largest source of methane from livestock, yet it remains uncommon for farmers to deploy anaerobic digesters (ADs) to convert biogas into renewable power, cutting tons of emissions in the process.

The Environmental Protection Agency estimated that just 221 AD systems processing dairy cow manure were in operation in the US in 2021, and today, many dairy digesters are at risk of being shut down as farmers struggle to afford the current electricity prices.

Clean fuel initiatives

Despite the cost barriers, one dairy producer in Washington has opted to retain its AD – and the decision will bring potentially hundreds of US$ per MWh of electricity back to the farmers. Lynden-based Edaleen Dairy teamed with 3Degrees and digester operator Regenis to co-finance a new engine and generator and keep the family-operated farm’s digester power project afloat. The digester has reportedly supplied enough clean, emission-free electricity to power 380 local homes.

3Degrees, a sustainability consultancy which helps farmers to generate and sell credits from reducing greenhouse gas emissions, advised Edaleen to sell its digester electricity into transportation markets to power electric vehicles. This was facilitated through Oregon’s Clean Fuel Program, an initiative designed to tackle greenhouse gas reductions in the state’s transportation sector. A similar program - the Low Carbon Fuel Standard - also exists in California.

“3Degrees has been working with transportation-focused clean fuels standards since its inception and is one of the largest providers of renewable electricity to electric vehicle chargers under these programs,”​ said Peter Weisberg, director of product development at 3Degrees. “The incentive varies significantly based on the methane emissions avoided by the project. We commonly see that the incentive is worth between $100 and $400/MWh to the digester project, but each opportunity requires a project-specific calculation based on historic manure management and the digester's operation.

“When new rules were released that provide a particularly lucrative incentive to dairy digesters by crediting them for their avoided methane emissions, we discussed with Edaleen and Regenis.”

Gas vs electricity

For farms looking to generate electricity, only projects in the West can qualify to join the programs, which require applicants to demonstrate that the generated power is sent to California and Oregon.

But renewable natural gas (RNG) offers another pathway for farms based many miles away from the Western grid.

“Renewable natural gas projects can enter the California market from anywhere, say from Florida or Maine,”​ explained Bryan Van Loo, vice-president of Regenis.

But converting to pipeline natural gas is more expensive, making this a more appropriate option for larger dairy farms located near to existing pipelines.

“All of this assumes using the biogas product in transportation fuels to get those transportation-based credits,”​ he stated. “There is an emerging market for sales to thermal use, i.e. direct sales to gas utilities to sell to their customers. This is emerging and do not get credit pricing, but some companies or residences have climate goals and are willing to pay extra money. Unfortunately, the cost of dairy biogas is typically too high to meet these markets, but things are evolving - and electric projects that are less expensive might be more possible to meet that pricing.​”

'Many wins'

While the outlook remains positive for an industry that can offer an alternative to traditional – and often more resource-intensive – manure handling methods like flush and scrape collection, digester projects have become more expensive to run too, thanks to energy hikes.

“A very approximate value is that these costs have increased 30% these last couple years,”​ Val Loo said. “But it is not so much these cost increases that matter but that the price received for the renewable electricity has decreased over the years. There were times when a combination of state’s needing to meet renewable energy portfolios and other factor led to prices received more on the order of 8-12 cents or more per kWh, but now are on the order 3 to 5 cents. In addition, in the past there were important tax incentives that were available from the federal government but [these] now are either gone, or in flux.”

Summing up the current state of play for farmers looking into ADs right now, he concluded: “The preferred pathway and direction used is somewhat dependent upon federal/state credit/incentive pricing programs, as well as utility/customer needs.

“Dairy electricity has many wins – lower dairy carbon footprint, improves many environmental attributes, [delivers] rural jobs/economics, diverse renewable energy, less expensive project than RNG, flexible off-takes, to name but a few. We continue to work with dairies, developers, and off-takers to facilitate project reality and production of more and more much needed renewable energy.”

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