Feasibility of Grass-to-Gas on Dairy Farms: A Probabilistic Techno-Economic Comparison of Renewable Natural Gas and Electricity Production

Farm-scale anaerobic digestion (AD) of dairy manure has been economically constrained due to limited financial returns and high investment risks. Co-digestion with lignocellulosic biomass, particularly grasses, has been proposed to enhance methane production while providing additional ecosystem services. Through techno-economic and uncertainty analysis, this study evaluates co-digestion of dairy manure with corn stover, switchgrass, and winter rye in a 1,000-cow dairy farm system. Two biomass sourcing strategies (i.e., on-farm and purchased) and two energy conversion pathways, electricity generation via combined heat and power and renewable natural gas (RNG) production via biogas upgrading, were assessed. Co-digestion consistently lowered the minimum selling price (MSP) of electricity and RNG relative to manure-only AD, but electricity generation remained economically infeasible (net present value < 0) across all scenarios. In contrast, RNG production offered a viable path towards improved performance, with positive net preset values for purchased corn stover and winter rye in 22% and 45% of simulations, respectively, achieving an MSP competitive with market 1 conditions. Winter rye showed the strongest overall performance and was the only feedstock to approach conditional feasibility under current policy and market conditions. Nevertheless, economic viability remained highly sensitive to policy incentives, indicating persistent investment risk. These results demonstrate that co-digestion can enhance the economic performance of manure-based AD, but viability depends critically on feedstock selection, biogas end-use pathway, and policy stability.