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Abstract

Utilizing information from two dairies in California, this paper develops a model for examining best management practices for designing and operating an anaerobic digester under the situation of a time-of-use net metering contract. It is argued that optimal decision making requires that multiple enterprise budgets should be developed that account for the different prices that can be received for producing at different times of the day for power that is consumed on-farm or net metered to the local utility. Furthermore, it is argued that while many anaerobic digesters are developed based on engineering efficiency, it would be better under differential pricing if they were built around the idea of maximizing profits, i.e., engineering efficiency is not synonymous with profit maximization.

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