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

Dairy manure spread on crop fields leads to air and water pollution that could be mitigated through manure processing systems that capture methane to produce electricity. A recent US policy opening wholesale electricity markets to distributed energy resource systems, creates incentives to deploy manure processing systems. 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.