Energy-neutral dairy chain in the Netherlands: An economic feasibility analysis

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The Dutch dairy chain is aiming to achieve energy-neutral production by bringing the whole chain from dairy farm to factory ultimately to be self sufficient in energy in year 2020, through a combination of wind, solar and biogas. This paper investigated the economic feasibility of producing green gas from digestion of dairy manure and other co-substrates. A simulation model of producing 17 PJ of green gas from 2 business models, stand-alone and central upgrading was developed. Probability distributions were chosen to describe the profitability and risks for individual business models and for the aggregate energy production at dairy sector level. Data sources, among others, stem from 23 operating biogas plants in Netherlands. Simulation results showed that the probability of a negative net present value (NPV) is less than 50% for both individual models. The probability that the combined business models producing 17 PJ will result in a negative NPV is 23%. A total of 109 plants are needed to produce the total energy, requiring 8.5% of the total amount of cattle manure produced in the Netherlands to be processed. Sensitivity analysis based on spearman rank correlation coefficient between NPV and each of the sample input distributions showed that biogas yield and investment costs have significant effect in determining the NPV values. --------------------------------------------------------------------------------
Original languageEnglish
Pages (from-to)60-68
JournalBiomass and Bioenergy
Publication statusPublished - 2012


  • biogas production
  • policy

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