Unit 5.2: Product and By-Product Markets

Background and Guiding Questions

This unit discusses the major markets for the products and by-products of an AD, and the risks associated with those markets.  Electricity generation, the uses of manure solids or fiber, renewable natural gas, and the various financial markets for credits associated with AD operation are discussed in this unit.

Guiding Questions

  • What is involved in negotiating a power purchase and interconnection agreement with a local utility?
  • What is digested manure fiber worth as a bedding material for dairy cow free stalls?
  • How much does the price of natural gas vary over time compared with electricity?

AD products and by-products can offer benefits in terms of cash revenues from product sales; from substituting for inputs that would have been purchased otherwise; and from avoiding costly litigation or improving public relations.  The focus in this lesson is on those products that have the potential to generate cash revenues, although replacing retail purchases may offer greater potential than sales which tend to be at wholesale prices.  Biogas is the main AD product with obvious revenue potential, but some AD operators also generate revenues from the sale of manure solids or fiber.

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