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The principal monetary benefit would be the value of biogas as a fuel, replacing another source of
energy. Other benefits are described below.

~ Electricity: A digester system will produce electricity to offset current farm power needs and
could
easily produce electricity to sell to the utility when a Power Purchasing Agreement contract is
developed.

~ Heat: Biogas may be used as a replacement for propane or natural gas. Heat may be recovered
from the
engine-generator heat exchanger which may be used for heat source replacements.

~ Bedding: (complete mix & plug flow) The solids recovered from a complete-mix or plug flow
digester effluent
are suitable to use for cow bedding. However, due to the dilute nature of covered lagoon
influent, a solids
separator is required prior to the anaerobic digester and the solids recovered “as-is” would not
be appropriate
for this use.

~ Recovered Solids: Solids recovered could be composted and sold off-site to a mulching or
gardening facility.         
Solids separation in general reduces the need for storage basin clean-outs.

~ Manure Handling: Dairy farms with anaerobic digesters report improved odor control &
improved manure
pumpability.

~ Green House Gas Reduction Credits: Flush dairy practices and liquid manure storage basins
provide and
anaerobic environment in which carbon contained in the manure is converted into methane
(CH4). An anaerobic
digester system will trap this methane before it can enter the atmosphere and combust the
methane gas
in a flare, boiler or engine. During combustion, methane is converted into carbon dioxide (CO2).
While still a
green house gas, CO2 is 20 times less harmful to global climate stability than methane. Financial
incentives to    
capture and destroy methane are available to digester projects through a participating member
and
offset provider on the Chicago Climate Exchange. More information about this program may be
found at
http://www.chicagoclimateexchange.com/

~ Renewable Energy Credits (RECs): Depending upon the agreement worked out with the utility;
the dairy may be
able to sell RECs to the utility, state or on an informal market. 1 REC=1000 kWh of power
produced. The ability
to sell these credits and the value of these credits is uncertain so a financial value in not normally
placed on
these credits prior to construction.

~ Tax Benefits- Depreciation: Straightline depreciation for the project can be claimed on annual
tax returns for
the farm.

~ Tax Benefits: Renewable Energy Credit: Section 45 of the tax code made by the “Energy Policy
Act of 2005”
allows renewable energy projects with an engine nameplate rating of 150 KW or greater to obtain
a tax credit    
of 0.9 cents/kWh of power produced.

~ Herd Health: Reduced pathogens in the recycled flush water will help improve the overall
health of the dairy      
animals.

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Farmer Reported Costs
In our experience, Operations and Maintenance costs are on the order of $0.015-$0.020 per kWh
of power
generated by the project. For instance a 100 kW engine-generator running 90% of the time could
produce
788,400 kWh each year which would cost between $11,000- $15,800 per year to maintain and
operate.

These costs are incurred by labor and materials for routine digester checks and engine
maintenance such as oil and spark plug changes.

Digester Maintenance: A properly running anaerobic digester project will take no more attention
than a 30 minute walk around to check the engine and biogas meters, digester pH and
temperature.

In an instance where a manure pump gets clogged with a foreign part or the engine needs
attention, more time will be needed.

Engine maintenance: Oil changes on the engine are required every two weeks which can require
additional labor hours.

The Caterpillar & Waukesha engine will require a top-end rebuild about every 20,000 hours (2.2
years) this can cost on the order of $10,000. This can be done in one day by a good mechanic.

Engine Heads need to be replaced every 8,000 to 12,000 hrs. Waukesha motors may go longer on
heads but have
the tendency to drop valves and do more damage if let go to long. These are easily replaced in
one day.

The Waukesha engine at Matlink Dairy (Ridgeline) went 22,000 hrs before it dropped a valve. This
did not do any damage to the engine. The valve just broke up and the engine spit it out the
exhaust. The engine continued to run for 2 weeks without the exhaust valve while they waited
for a replacement head.

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Does Anaerobic Digestion Solve the Problem?
A problem must be recognized before it can be solved. Farms and governments are recognizing
the need for control of point source and non-point discharge from animal production. Controls
cost money.  Digesters make money for the farm from heat or electricity, reduced odor, reduced
flies, reduced pathogens, killed weed seeds, and improved fertilizer values.  Therefore,
anaerobic digestion can be a solution to the problem.


Market Advantages
The long term analysis is, an anaerobic digester will improve the profitability of most, but not all
farms.  In the future, the advantages of the systems will be more fully appreciated.  There are
hundreds more digesters today than there were 10 years ago. The farming industry has embraced
the technology as a lower cost alternative for pollution control and many farms will continue to
do so.  When the technology is compared with alternatives, farmers realize that the advantages
exist.  If farms in all countries must meet similar pollution control regulations, then they will all
consider their options and many will select digestion for the edge it will give them in profitability.
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