The Tipping Point: Economic Viability and Resilience of Dairy Manure Bioenergy Under Market and Policy Shocks

This study evaluated the economic viability and resilience of anaerobic digestion (AD) systems on United States (U.S.) dairy, revealing substantial vulnerabilities to policy and market shocks. While optimal Renewable Natural Gas (RNG) systems demonstrated a 54.0% success probability and positive mean Net Present Value (NPV) ($392,000) under baseline volatility, their viability is catastrophically degraded by federal policy shocks, causing the success probability to plummet to 1.4%. Conversely, Combined Heat and Power (CHP) systems showed a lower baseline success rate (32.6%) and negative mean NPV ($−156,000) but exhibit more gradual vulnerability. These findings were derived from an integrated analytical framework combining deterministic optimization, Monte Carlo simulation, and a novel multidimensional resilience assessment. Deterministic analysis confirmed that revenue diversification is essential for viability, with optimal RNG and CHP configurations achieving breakeven at 655 and 1165 cows, respectively. Our novel Composite Resilience Index (CRI) revealed a counterintuitive finding: despite RNG’s superior baseline profitability, CHP systems achieve a higher overall resilience score (52.3 vs. 47.7) due to better stability and shock resistance. These results highlight the critical importance of incorporating uncertainty and resilience considerations beyond traditional NPV analysis for renewable energy investment decisions.