Anaerobic digestion: opportunity or threat for dairy?

Published 3 April 14

Interest continues to grow in on-farm anaerobic digestion (AD) as a way of generating additional revenue, reducing odour nuisance and managing waste. But the tariffs are also shifting demand for land, with some dairy farms now having to compete for maize silage stocks…So long term, is AD an opportunity or threat for dairy farmers?

Anaerobic digestion (AD) has become a relatively common concept for farm businesses over the past decade. For dairy farmers, benefits include enhanced slurry and nutrient management with increased availability of nutrients in digestate compared with raw slurry, a reduction in odour, and, of course, energy and heat generation.

Phil Greenaway from Evergreen Gas says that the benefits of the technology are greatest for those farms who are able to utilise both the heat and power generated to offset fossil fuel use. “If you can capture the heat and use it, for example to heat wash water, livestock or poultry housing, or domestic dwellings, you get the double benefit of cutting energy use and gaining income from the Renewable Heat Incentive,” he explains.

The rule of thumb, he says, is you will generate 0.1kW of power alone, for each cow for every day she is housed. “AD will work best with housed systems, but that doesn’t preclude a farm running slurry through the digester in the winter then gradually switching to an alternative feedstock for the summer months when the cows are out.”

He adds that while the technology is very well-established – his team have been installing AD units for over 30 years in the UK – there are still challenges, such as sand and the ingress of yard water on dairy farms.

“With the rise in the use of sand as a bedding, effective separation prior to the slurry entering the process is essential as the sand can settle out in the tank, causing a build-up of sediment. There are digesters that allow removal of sediment from the digester while the process is in operation, but it is better to prevent the sand from building up in the first place.  While washings from the dairy are less of a problem, especially during times of peak slurry capture, yard water is just bulk that requires heating with no calories in return – like feeding a dairy cow, you’re looking for the right consistency and energy density in the feed.”

Feed-in tariffs for AD might be scaling back from 1 April, but they’re still a strong incentive for those thinking of getting involved in renewables – especially with the addition of the Renewable Heat Incentive says Dr Michael Goldsworthy from ‘bioeconomy’ consultants NNFCC.

“This means plants with an installed capacity of below 250kWe could attract 12.5p/kWh for electricity generated and as much as 7.5p/kWh for usable heat, with large-scale plants eligible for 9.5p/kWh for power and 2.2p/kWh for heat,” he explains.

But much of the profitability depends on the feedstock, which is where conflict could be emerging. While many digestors use cattle or pig slurry or poultry manure as their mainstay, it is indisputable that a feedstock with a higher energy value will yield more power per tonne of input. No more so than with maize silage, which as well as fitting the bill for animal feed, is now also proving pretty irresistible as an energy crop.

Feedstock

Dry Matter %

Biogas Yield m3/tonne

Cattle slurry

10

15-25

Pig slurry

8

15-25

Poultry 'litter'

20

30-100

Grass silage

28

160-200

Whole wheat crop

33

185

Maize silage

33

200-220

Sugar beet

-

236-381

Straw

-

242-324

Figures in italics are taken from an AD calculator tool produced by NNFCC and The Andersons Centre, all other numbers are from Biogas from Energy Crop Digestion by the IEA. All figures are based on fresh weight.

WRAP’s survey of the UK organics recycling industry in 2010 identified 48 plants in the UK. Now, in early 2014, NNFCC’s newly-published report ‘Anaerobic Digestion Deployment in the United Kingdom’ indicates we have almost three times that with 138 plants, 65 of which are primarily agricultural biogas digesters fed slurries, manures, crops or crop residues produced on-farm.

Dr Goldsworthy says while only 10 have been identified as ‘crop-only’ – that is fed exclusively on maize and/or grass silage – it’s likely some two thirds of all  agricultural plants use maize silage in some capacity. “Generally plants in the South and East are more likely to use maize, while plants towards the North and West more often use grass and wholecrop cereals,” he says.

“The report shows that the UK AD industry currently requires around 750,000 tonnes of crop, split across maize, grass and other energy crops. This could increase to 2.7 million tonnes if all plants in the development pipeline complete – although only around 30 to 50 per cent are expected to.”

He says that assuming a crop yield of 45 fresh tonnes per hectare, the UK AD industry would currently require just under 17,000ha of land for cultivating grass and maize feedstock. If all plants under development completed, then the required cropland would increase to just over 60,000ha, representing around one per cent of the six million hectares of arable land available in the UK.

“However, it is likely that the actual amount of additional land needed for AD would be far lower,” explains Dr Goldsworthy. “Maize and grass will often be grown as a break crop in place of other forage or green crops, for which markets don’t necessarily exist in the local areas. Maize can also be used to effectively control black grass and other persistent weeds, pests and diseases which build up in a cereal and oilseed rotation.”

Graham Redman, research economist and renewables specialist from the Andersons Centre, agrees that while demand for maize is growing, the effect on dairy farming businesses will still be localised.

“On a national basis, the total new area being commandeered for anaerobic digestion is relatively small out of the 165,000ha of maize we grow in the UK every year,” he explains.

“But where you see the impact is on a local basis, where a new high-capacity plant can suck up the stocks of maize silage in that area and increase local land rental values accordingly. In effect, what we are seeing is the maize silage feeding one giant digester rumen instead of 200 cow rumens. That’s why it’s a feedstock that’s in such high demand – it’s great for producing energy through fermentation. The impact on local prices can be severe – in fact it can almost double the cost of maize in some cases.”

He says the good news for farmers is that despite the uplift in AD in recent years, the UK is unlikely to see a further exponential increase in the technology.

“While the government has restated its commitment to supporting the production of biogas, the tariffs are not set high enough to stimulate a wholesale shift and the focus remains on handling organic waste.  This is in contrast to Germany where the tariffs are relatively higher as the technology starts to replace some nuclear power supplies.”

So if AD won’t be displacing dairy farming on a national basis any time soon, how can the impact nevertheless be managed on a local basis? The key, says DairyCo’s Tom Goatman, is knowing exactly how much you can afford to pay for your maize silage.  

“You need to start with costs – establishment, variable and contractor; then you need to take into account the opportunity cost for each hectare of land used, depreciation of forage structures like clamps and buildings, losses incurred during fermentation and feed out, and finally, the cost of presenting the feed to the cow – such as the use of forage wagons or material handlers,” he says.

“The area most influenced by the presence of an AD plant in the local area will be the cost of land – but it may also increase contract costs if forage has to be grown and transported from further away due to the localised competition.”

He says in terms of dairy cow rations, the focus should be on the cost of each unit of energy in the ration; this can be found by combining the total utilised DM cost with the relative feed value of the individual crop, calculated through the following steps: 

 a. Estimate utilised DM yield (tonnes/ha) 

 b.Quantify the establishment costs of production (£/ha)

 c. Quantify the variable costs of production (£/ha)

 d. Quantify the contractor costs (£/ha)

 e. Calculate total cash costs (£/ha) = b + c + d

 f. Convert cash cost to utilised DM/tonne (£/t utilised DM) = e / a

 g. Quantify the land charge (£/ha)

 h. Convert land charge to utilised DM/tonne (£/t utilised DM) = g / a

 i. Account for depreciation costs (£/t utilised DM)

 j. Sub-total (£/t utilised DM) = f + i

 k. Calculate on-farm cost (£/t utilised DM) = h + j

 l. Account for post-harvest and feeding out losses (£/t utilised DM)

 m. Calculate the total (£/t utilised DM) = k + l

Mr Goatman says: “Once the utilised DM cost has been calculated, the nutritional characteristics of the crop need to be taken into account to determine the cost of the energy supplied. 

“This is vitally important as an increase in land rent may be offset, for example, by an increase in crop yield and quality, reducing the relative cost of the energy supplied.  If we compare this to a maize crop grown with a lower land charge but also lower DM yield and nutritional quality, the cost per unit of energy will be increased.”

To calculate the value of 1MJ of ME:

 £ per tonne utilised DM / 1000 / Crop ME content (MJ/Kg DM) = £/MJ ME

Mr Goatman concludes that the point at which a given land charge becomes uneconomic to grow maize for inclusion in a dairy ration will depend on a number of factors. “But is vitally important that all costs are valued and this is combined with the nutritional content of the crop to allow an informed decision to be made.”

A useful source of information on biogas and anaerobic digestion is biogas-info.co.uk

Germany remains the European frontrunner in power production from biogas. In 2010, it had an output of some 16 billion kWh and by 2012, around 7,600 systems with a cumulative capacity of almost 3,200 MWe generating 21.9 billion kWh, consolidating its position as the international front runner. The UK, by comparison, had a capacity of 127 MWe in 2012 – around 1/25th of Germany’s – 41.5MWe of which was attributed to plants predominantly using agricultural feedstocks.

With biogas a key strategy in domestic energy security following a decision, post-Fukushima, to phase out nuclear power by 2022, feed-in tariffs are necessarily high, starting at 20-22 Euro cents per kWh. While additional bonuses exist for including using at least 30% animal wastes within the feedstock, these tariffs have led to a significant portion of the maize-growing area being diverted from animal feed to energy. One example of this is the Agrarkandelin farming business near Rostock, which runs four biodigesters. While some of the feedstock comes from the pig and cow enterprises, the bulk is silage from more than half the 900ha of maize grown on the farm, fed at a rate of 11 tonnes per digester per day.