Economic Feasibility Study of Colorado Anaerobic Digester Projects ...

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6.2 Enterprise budget (Page 45) 6.3 Sensitivity analysis (Page 48) 7.0 References (Page 51) 8.0 List of Appendices (Page 54) 8.1 List of Technology Providers Interviewed (Page 54) 8.2 Colorado Permitting Fees Associated with an Anaerobic Digester Facility (Page 56) 8.3 Overview of the California Environmental Review and Permit Process (Page 60) 8.4 Utah Department of Environmental Quality Process Documents (Page 67) 8.5 ActNeutral Project Financial Summary for Aurora Organic Dairy Project (Page 79) Economic Feasibility Study of Colorado Anaerobic Digester Projects Prepared by Dr. Catherine Keske, Colorado State University August 2009 Page 4 of 79
1.0 Executive Summary The purpose of this project was to conduct an economic feasibility study and identification of policies germane to Colorado agricultural and co-digestion anaerobic digestion (AD) projects. The secondary purpose of this project was to compile information relevant to regional AD projects into a centralized reference report. Key findings are as follows: • An enterprise budget for a co-digestion AD project reveals that such projects can be profitable in Colorado under a “typical” scenario, when there are no unforeseen problems, although with a low rate of annual return (3.66%). Unfortunately, technology providers and operational managers report higher variability in the budgetary line items than the “typical scenario” modeled, so budgetary numbers have been calculated for a “poor” economic condition (approximately a 20% reduction in typical values, unless otherwise specified) and a “favorable” economic condition (approximately 20% improvement in typical values, unless otherwise specified). Poor and favorable economic conditions are projected to yield a return of -30.78% and 46.45%, respectively. Budget findings are presented and discussed in Section 6.0. • Sensitivity analysis shows that curtailing AD operational costs and increasing AD energy production (either through increased efficiency or improved billing capacity) have the most significant impact on net income. In this model, a 1% change in AD operating costs will change net revenue by 14.54%. A 1% change in energy production will change net revenue by 11.14%. Sensitivity analysis findings are presented and discussed in Section 6.0. • At this time, the following characteristics are most likely to yield economic viability at a Colorado AD project (or justify the capital investment): • Co-digestion or regional digesters. • High volume and consistent availability and composition of feedstock. • Potential for using the AD unit to offset natural gas costs, rather than to offset electricity costs or depend upon electricity revenues. • Imminent legal action due to odors or nuisance lawsuits. As described in Section 4.4, swine operations may also wish to consider implementing AD units as part of a standard operating procedure. • Investment in engineering research on technology to accommodate high solids content waste and low humidity environments will likely improve the economic feasibility of AD systems. As noted in the sensitivity analysis, AD operating costs Economic Feasibility Study of Colorado Anaerobic Digester Projects Prepared by Dr. Catherine Keske, Colorado State University August 2009 Page 5 of 79
Page 1 and 2: Department of Soil and Crop Science
Page 3: TABLE OF CONTENTS 1.0 Executive Sum
Page 7 and 8: 2.0 Project Overview. 2.1 Introduct
Page 9 and 10: 3.0 Insights Provided by Colorado A
Page 11 and 12: A. Net Metering: Although implement
Page 13 and 14: Alternative energy mandates have be
Page 15 and 16: university level may spark future p
Page 17 and 18: y AD technology. However, energy ma
Page 19 and 20: C. Collapse of New Frontier Bank. T
Page 21 and 22: discourage technology providers and
Page 23 and 24: elieve that carbon prices will rise
Page 25 and 26: 640-acre farm without regard to its
Page 27 and 28: The technical feasibility review fo
Page 29 and 30: Photo 5.3.1 CCI Dairy Herd. The CCI
Page 31 and 32: Photo 5.3.4 Road View of the CCI Ti
Page 33 and 34: federal grants during the past deca
Page 35 and 36: place over the phone and email. Sin
Page 37 and 38: Photo 5.7.1 Electrical generator at
Page 39 and 40: Photo 5.7.6. AD Unit #2, view from
Page 41 and 42: Photo 5.7.11 Wyoming Premium Farms
Page 43 and 44: negotiated settlement agreement. Th
Page 45 and 46: It is important to note that the en
Page 47 and 48: As previously stated, the net incom
Page 49 and 50: Figure 6.2 Results of Sensitivity A
Page 51 and 52: 7.0 References ActNeutral, LLC. 200
Page 53 and 54: Zimmerle, Dan, Keske, Catherine, an
Page 55 and 56:
Email: info@hprenewable.com Website
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2. In addition to the review fee th
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Agriculture Program. If an anaerobi
Page 61 and 62:
the use of pesticides. The responsi
Page 63 and 64:
Once an application is accepted as
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discourages a government agency fro
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8.4 Utah Department of Environmenta
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money. He says new farms should use
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DWQ denied a request to dump more w
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Web Notes The Smithfield Foods Utah
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Economic Feasibility Study of Color
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The principal idea is to increase b
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8.5 ActNeutral Project Financial Su
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