Anaerobic Digestion – Covered Manure Storages

 Impermeable covers minimize odor and limit ammonia emissions. Covers prevent rainfall from mixing with manure, making manure production volumes more consistent from year to year, reducing the chance of overflow, and providing the potential for methane capture, reducing the farm's environmental footprint. These opportunities indicate that covered manure storage should be favored, yet incorporating impermeable covers has been minimal. Many resources suggest the potential benefits of impermeable covers, but a thorough economic evaluation of benefits is lacking, with the existing tools predating the development of RIN and LCFS Carbon Credit Markets. These markets are game-changing in the potential opportunities they offer. With this in mind, we developed a model to estimate how covers would impact the spreading costs, fertilizer value, biogas production, and carbon credits a farm receives and evaluate implications for Iowa livestock farms.

With that in mind, I've been putting together some estimates of the value covers and potential costs. Many assumptions are involved in these estimates, and hopefully, a future extension publication will walk through some of the calculations. Here we provide a comprehensive economic exploration of the value impermeable covers offer, focused on illustrating both perceived values and those that are the definitive economic drivers in the current marketplace. We looked at three example farms, a 4800-head swine finishing farm starting with deep pit manure storage, a 4800-head swine finishing farm starting with a drain pit and out-of-barn slurry storage, and a 500-head dairy with out-of-barn manure storage. We calculated the cost of modifying the facility to add a cover at each farm and the potential cost savings provided with current economic and carbon credit-based incentives. Evaluations assumed a 5-year or 10-year life with interest set at 8%.

Results are shown in table 1. In general, when all potential values are considered, both the 4800 head swine and the 500 head dairy using lagoon, earthen basin, or out-of-barn manure storage were cost feasible within five years and had net annual incomes of $50,000-$70,000 within five years. Economics didn't appear as favorable at deep pit facilities as construction costs for manure storage modifications increased cost. Combined with a higher carbon intensity score on methane, this produced limited payback opportunities.

Table 1. Estimated cost-benefit ratio for covers at livestock facilities creating CNG.

	5-year life			10-year life
Facility Type	4800 swine	4800 swine	500 head dairy	4800 swine	4800 swine	500 head dairy
	deep pit	lagoon		deep it	lagoon
Methane Value	$44,661	$44,661	$44,030	$44,661	$44,661	$44,030
LCFS Value	$199,352	$420,744	$414,804	$199,352	$420,744	$414,804
RIN Value	$283,311	$283,311	$279,312	$283,311	$283,311	$279,312
Nitrogen Value Savings	$5,635	$4,827	$2,401	$5,635	$4,827	$2,401
Odor Reduction	$6,900	$6,900	$884	$6,900	$6,900	$884
Storage Construction Savings	$0	$1,226	$2,427	$0	$729	$1,444
Manure Application Costs	($2,674)	$398	$2,845	($2,674)	$398	$2,845
Carbon Credits from N2O	($770)	($2,690)	$554	($770)	($2,690)	$554
Pipeline Injection Point	$250,457	$250,457	$250,457	$149,029	$149,029	$149,029
Biogas Cleaning & Compression Equipment	$186,254	$186,254	$183,624	$110,827	$110,827	$109,262
Biogas Cleaning & Compression Maintenance	$74,366	$74,366	$73,316	$74,366	$74,366	$73,316
Biogas Cleaning Operation	$11,018	$11,018	$10,862	$11,018	$11,018	$10,862
Biogas Management Employee	$80,000	$80,000	$80,000	$80,000	$80,000	$80,000
LCFS/RIN Sales Fees (10%)	$48,266	$70,405	$69,412	$48,266	$70,405	$69,412
Manure Storage Construction	$102,391	$0	$0	$60,926	$0	$0
Annualized Cover Installation Cost	$13,948	$13,948	$22,126	$8,300	$8,300	$13,166
Cover Maintenance Cost	$5,569	$5,569	$8,834	$5,569	$5,569	$8,834
Rainfall Removal	$14	$14	$28	$14	$14	$28
Annual Benefit	$536,415	$759,377	$747,257	$536,415	$758,880	$746,274
Annual Expense	$772,283	$692,031	$698,659	$548,315	$509,528	$513,909
Net Benefit	($235,868)	$67,346	$48,598	($11,900)	$249,352	$232,365

 

These results are highly dependent on a farm scale and assumed covered manure storage, not the implementation of an anaerobic digester. Next month we'll look closely at the role farm size plays. In November we'll look at how heated digester systems compare to impermeable covers.