Profitability of optimizing biogas production in dairy farms : an experimental case study of a Swedish dairy farm´s usage of nitrogen in digestate as a nutrient resource for crop production

Abstract: Biogas has the potential to be a contributor to sustainable energy for electricity, fuel, and heating. Because of that, there are different alternatives for biogas plants. In this study, a farm-based biogas plant for electricity production has been of interest. The related earnings and costs have been compared in eight different case farm alternatives to determine whether investing in a farm-based biogas plant is profitable. All case farm alternatives have had their base in milk production. Four of the case farm alternatives have had conventional agriculture, where two have had 200 dairy cows and 280 hectares of arable land, and two have had 400 dairy cows with 560 hectares of arable land. Each production size has compared one alternative without biogas production and one alternative with biogas production. The same structure has been used for the remaining four case farm alternatives with an organic agriculture focus. The findings have been found using linear optimization models for each of the eight case farm alternatives. The results showed that the alternatives with 200 dairy cows with 280 hectares of arable land and biogas production were marginally profitable regardless of agricultural focus compared to the alternative with the same number of dairy cows, hectares of arable land, and agricultural focus. In the conventional alternative, the case farm with biogas production increased their overall profit with approximately 30 000 SEK compared to the alternative without biogas production. In the organic alternative the profit from biogas production increased more, as the difference was approximately 150 000 SEK. When alternatives with 400 dairy cows and 560 hectares of arable land was investigated, a farm-based biogas plant proved profitable and contributed significantly to the overall result. In the conventional alternative, the biogas plant contributed with roughly 600 000 SEK to the overall profit, compared with approximately 830 000 SEK. When comparing all the eight case farm alternatives, the conventional agricultural focus proved more profitable than their organic counterparts. It could be explained by higher yield per hectare, the cheaper cost for feed ration inputs, the higher price for sales of calves and less cost per additional nitrogen needed. The main difference between the case farm alternatives without biogas production compared to those with it is that the cost for nitrogen is much higher when not having biogas production. That is because the digestate from the biogas production, given the study's substrate mixture, contains a higher percentage of nitrogen per tonne.