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Economic Feasibility Assessment for Renewable Fertilizers from Anaerobic Digestion with Integrated Manure

Nutrient Recovery SystemHayk Khachatryan, Ken Casavant, Eric Jessup

& Craig Frear

Economic Feasibility Assessment for Renewable

Fertilizers from Anaerobic Digestion with

Integrated Manure Nutrient Recovery System

Hayk Khachatryan (University of Florida)Ken Casavant (Washington State University)Eric Jessup (Washington State University)Craig Frear (Washington State University)

International Food & Agribusiness Management Association meetings, Frankfurt, Germany.June 20-23, 2011

The Problem

Increased geographic consolidation of dairy production

Accumulation of manure-based nutrients

Excess levels of nitrogen (N) and phosphorus (P)

Air/water quality, odor issues

All leading to tightened environmental regulations (nutrient management plans for dairy farms)

Dairy Manure Total Ammonia: 2-7 g N/L Total Phosphorus: 0.5-1.5 g P/L

• AD mitigates numerous air, water and climate environmental concerns while producing renewable energy

• However little advantage is gained for growing concentrated animal feeding operations (CAFO) or industry producers concerned with their overall nutrient loading to fields.

The Problem (cont.)

Increasing Trend in Fertilizer Prices

The Solution: Anaerobic Digestion

Methane, CO2, & Trace Gases

Fuels Produced AD Process

Electricity

Liquefied Natural Gas

Compressed Natural Gas

Methanol

Dimethyl Ether

Gaseous Hydrogen

Fischer-Tropsch Diesel

…

Dairy Manure

• Nutrient recovery extracts useful N and P nutrients from the post-digestion effluent

• Renewable bio-fertilizer, in addition to above listed co-products from anaerobic digestion

NutrientRecovery

Unit

No Ammonia Inhibition

ReducedNutrientLoading

SaleableBio-fertilizers

The Solution: Integrated Nutrient Recovery Approach

Geographic Concentration of Dairy Farms in the State of Washington

Geographic Distribution of Primary Crop Groups in the State of Washington

Capital Cost Assumptions for Nutrient Recovery System

Nutrient Recovery Rate Assumptions

Capital & Operating Cost Components of Nutrient Recovery System

Economic Feasibility Results

NPV by Herd Size for All Scenarios

Economic Feasibility Results (cont.)

IRR by Herd Size for All Scenarios

Economic Feasibility Results (cont.)

NPV by Federal Grants as % of AD Installed Costs

NPV, IRR, & Payback Period Sensitivity Analysis

Biogas yield coupled with expected electricity sales price, Herd size coupled with expected electricity sales price, Federal grants (% of installed cost) coupled with expected

electricity sales price, State financial incentives coupled with expected electricity sales

price, Effluent availability coupled with sulfuric acid cost, Herd size coupled with sulfuric acid cost, Effluent availability coupled with lime cost, Herd size coupled with lime cost, and Federal grants (% of installed cost) coupled with sulfuric acid cost.

Sensitivity Analysis (AD with Nutrient Recovery System Scenario)

NPV – Sulfuric Acid Cost NPV – Lime Cost

Site Selection: Fertilizer Markets and Transport Costs The Geographic Distribution of Dairy Farms in Relation to

Crop Fields

Site Selection (cont.)

Bio-fertilizer Transportation Distances

Case Study: Location 1(O-D, Farm Resources, End-Use Markets)

Case Study: Location 2 O-D, Farm Resources, End-Use Markets

Case Study: Location 3 O-D, Farm Resources, End-Use Markets

Covered Processing Area Driveway/Fertilizer Storage

Electrical Building

AerationReactor

Anaerobic Digester, EngineBuilding, and Lagoon

Electrical Service andBlowers, etc.

Settling Weir

Settling Weir

WSU has complete licensing and patent arrangements with GHD Incorporated, AndgarCorporation, and BEST, LLC

Full scale demonstration Spring 2011 at WA State Dairy, thanks to USDA NRCS CIG andDOE ARRA/WA Commerce funding.

Full System Design Demonstration in the State of Washington

Conclusions:Location, Location, Location

Opportunities Renewable fertilizer production Odor control/elimination Pathogen reduction Food security Farm nutrient balance management

Challenges High capital costs Lack of financing Inconsistent government support Inconsistent relationships with utility companies Design and installation issues Location-specific issues

Questions?

Hayk Khachatryan Research Associate

hayk.khachatryan@email.wsu.edu(Currently Assistant Professor at University of Florida, hayk@ufl.edu)

Ken CasavantProfessor

casavantk@wsu.edu

Eric JessupAssociate Research Professor

eric_jessup@wsu.edu

Craig FrearAssistant Research Professor

cfrear@wsu.edu

Transportation Research Group at School of Economic Sciences &

Department of Biological Systems EngineeringWashington State University

Pullman, WA 99164