Hilarides Dairy

» See our response to public comments on this project

The Hilarides Dairy operates a covered-lagoon digester for manure digestion, methane collection, and electrical power generation. The project benefits climate change strategies by reducing the amount of greenhouse gases produced in dairy operations, as well as reducing the greenhouse gases from the facilities’ electricity use by displacing fossil fuel based power with clean renewable power.

The project went online in March, 2004. The digester collects waste from a 6,000-head ranching operation in Lindsay, California. Biogas from the manure powers four 125-kW generators that supply power to the farm.

Previously, manure was collected in open-air lagoons, and resultant methane emissions vented directly into the atmosphere.

TerraPass funds help ensure an adequate financial return for the project. Although project costs are partially defrayed by electricity generation, carbon credits provide a stable source of revenue necessary to justify the decision to implement the project and to cover ongoing operation and maintenance costs.

This project meets the Chicago Climate Exchange offset protocol standards.

Project details

The Hilarides Dairy is a family-owned operation. Rob Hilarides is a third-generation dairy owner, and his daughters have entered and expanded the family business with the creation of the prize-winning Three Sisters Farmstead Cheese company.

The farm consists of a dairy operation and a 6,000-head heifer ranch. Manure from feed alleys at the heifer ranch is flushed daily using recycled lagoon water, generating 180,000 gallons of flushed manure water daily. This manure water flows by gravity into four settling ponds that are cleaned twice yearly to remove manure solids directly to cropland. The manure water is pumped by floating pumps to the north end of covered digester lagoon #1, where most of the gas production occurs. The overflow continues to lagoon #2, where a smaller amount of gas is collected from five floating covers. The manure water that remains after digestion is then pumped from the second lagoon to cropland, where it is mixed with surface or groundwater and applied as fertilizer for crops of corn, wheat, or alfalfa.

Lagoon #1 is fed once daily (taking approximately four hours) with flushed-manure slurry, and maintained at ambient temperatures.

At the dairy, the gas flows to four Cat G342 engines, each with a capacity of 125 kW for a total capacity of 500 kW.

Project location

The project is located in Lindsay, California.

Other social and environmental benefits and costs

Environmental benefits

• Improvement in air quality (e.g., VOC reductions).
• Elimination of odor in surrounding areas, improving living standards both on the farm and in the neighboring communities.
• Creation of organic, largely pathogen-free nutrients for use as fertilizer.

Social benefits

• Local employment for construction related to the project, installation of equipment, and operation of the project.li>
• Increased energy independence for the farming sector. This manifests itself both in longer-term low energy costs (extending beyond the crediting period), as well as reduced exposure to price risks in energy markets.
• Continued operation of a family-owned dairy farm by improving its economic well-being.

Project’s ability to foster further greenhouse gas emission reductions

• Rob Hilarides has been a vocal proponent of methane digesters on dairy farms. The dairy industry is responsible for over $17 billion of economic activity annually in California, and successful demonstration projects help to prove the benefits of the technology to other famers.
• Presently the project captures manure from the heifer ranch only. In the future it could be expanded to the dairy operation.

Project’s environmental and social costs

• The project required construction of a new digester, along with associated consumption of energy-intensive goods such as concrete and steel.
• The project’s engines emit small amounts of emissions typical of a back-up gas generator.

Discussion of appropriate use of TerraPass funds

The project is an great candidate for TerraPass funds, as carbon revenues are a critical factor in ensuring an adequate return to a project with significant capital costs.

TerraPass considers many aspects of a project before deciding whether to fund it. Here is a summary of key considerations for this project:

Baseline conditions

Prior to the construction of the manure digester, manure was captured in open-air lagoons and spread on the land. Under these conditions, methane was vented directly into the atmosphere.

Additionality

No regulatory requirements. There are no state, federal, or local regulations requiring the dairy to manage its manure in this manner.

U.S.-based anaerobic digester based projects are widely accepted as additional by analysis of their aggregate economics and adoption profiles. This project meets the eligibility criteria of all the following performance standard protocols: EPA Climate Leaders, California Climate Action Registry, and CCX Offset Protocol. The project has been verified against the standards of the CCX Offset Protocol. At the time of the project launch, there were approximately 60 dairy digesters in operation in the U.S., out of a total of about 92,000 dairies.¹

Barriers to implementation. Methane digesters require significant up-front capital costs and ongoing maintenance to ensure adequate electrical generation. Other alternatives open to the facility, such as continuing daily spread or the construction of open lagoons, were not prevented by these barriers. We have not been made aware of any reasons that continuing operations would face any legal or permit barriers.

Impact of TerraPass funds. A TerraPass review of the project’s economics shows carbon offset revenue was necessary at the time of launch to ensure an adequate return on the project. The magnitude of carbon offset revenue significantly contributes to making the project economically feasible compared with other investment alternatives.

Better than most. TerraPass seeks projects where the operations have shown good practices and avoided substantial negative impacts. Hilarides Dairy is a well-run dairy that has performed active outreach to encourage the adoption of methane digesters more widely in the industry.

1. Climate Leaders Draft Offset Protocol, October 2006.