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Biogas production in United States dairy farms incentivized by electricity policy changes

Nature Sustainability volume 6, pages 438–446 (2023)Cite this article

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Abstract

The agricultural practice of spreading dairy manure on crop fields leads to widespread air and water pollution due to uncontrolled release of greenhouse gases, nutrients and pathogens. The associated environmental impacts can be mitigated by deploying manure processing (MP) systems that capture methane to produce electricity and facilitate nutrient management. Enacted in September 2020, the US Federal Energy Regulatory Commission Order 2222 (FERC-2222) enables distributed energy resource systems to participate in wholesale electricity markets with higher selling prices than historically available to them. Using economic supply chain models, we show that market electricity prices create incentives to deploy MP systems. We highlight the role of FERC-2222 in activating electricity bioeconomies that mitigate environmental impacts resulting from manure spreading. We estimate this bioeconomy to contribute US$131 million in annual revenue for dairy farms and avert US$39 million in greenhouse gas and US$182 million in nutrient emissions within a Wisconsin study area. FERC-2222 incentivizes sustainable dairy manure management and renewable energy production—a dual benefit, demonstrating how effective policy can support sustainable infrastructure.

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Fig. 1: Bioenergy (electricity and biogas) can be generated from a variety of sources, including biomass, livestock manure and food waste.
Fig. 2: FERC-2222 allows DERs to participate in wholesale electricity markets by allowing aggregations of DERs to bid as a collective.
Fig. 3: Livestock waste production has substantial environmental impacts.
Fig. 4: Variation in electricity prices in the MISO.
Fig. 5: Incentives and SC outcomes post-FERC-2222.

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Data availability

All case study data needed to reproduce the results are available on the Zavalab GitHub repository at https://github.com/zavalab/JuliaBox/tree/master/FERC2222Cases. Data are in .csv format.

Code availability

All code needed to reproduce the results is available on the Zavalab GitHub repository at https://github.com/zavalab/JuliaBox/tree/master/FERC2222Cases. Code consists of scripts programmed in the Julia programming language (version 1.6.2) and make use of the JuMP mathematical programming package (0.21). An open-source solver (for example, Clp) will be sufficient to reproduce our results.

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Acknowledgements

We acknowledge support from the US Department of Agriculture (grant 2017-67003-26055).

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Authors and Affiliations

  1. Department of Chemical and Biological Engineering, University of Wisconsin-Madison, Madison, WI, USA

    Evan D. Erickson, Philip A. Tominac & Victor M. Zavala

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  1. Evan D. Erickson
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Contributions

V.M.Z. conceptualized the idea for the paper. E.D.E. and P.A.T. together developed the supply chain model conceptualizations and case studies for this paper. E.D.E. wrote the paper and created the figures, with revision and editing by P.A.T. and V.M.Z. The FERC-2222 supplement is the work of E.D.E. with editing from P.A.T. and V.M.Z.

Corresponding author

Correspondence to Victor M. Zavala.

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The authors declare no competing interests, conflicts of interest, or personal ties that would influence or appear to influence the work in this paper.

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Nature Sustainability thanks Xiaoguang Chen, Bhavik Bakshi, and the other, anonymous, reviewer for their contribution to the peer review of this work.

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Supplementary Information

Details on FERC policy and additional technical details on formulation.

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Erickson, E.D., Tominac, P.A. & Zavala, V.M. Biogas production in United States dairy farms incentivized by electricity policy changes. Nat Sustain 6, 438–446 (2023). https://doi.org/10.1038/s41893-022-01038-9

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