 |
 |
 |
 |
Bioplex Home |
|
Background Info |
|
Project Research |
|
Links |
|
Acknowledgements |
|
Contact Us |
|
The Economics of Anaerobic Digestion The main economic benefits of anaerobic digestion include energy production, treatment cost alleviation, fertilizer production, odor-control and nutrient discharge control, (the latter two can be quantified financially in that the presence of a digester may enable the farmer to continue in business on site with environmental control orders). Additionally environmental tax credits would be available to a project as well as green energy credits, both of which have a monetary value. The potential to provide economic viability from installing an anaerobic digester system depends on several factors some of which are interrelated. For example if energy production is essential then the more efficiently this occurs the more the pollution load is reduced and hence downstream treatment costs. The main issue is one of economy of scale to provide the end-user with a Return on Capital, (ROC), which is acceptable to the farmer or financial backer. Thus if an ROC works out at say less than 5% then a project would be deemed to be unviable financially unless there is another reason to add this to the farm operation, such as staying in business because the digester provides a means of removing nutrients off site or reducing odors. It is expected that for external funding to be available, the ROC should be in the region of 15%-25%. This depends upon the capital and operating costs and the returns from selling power, fertilizer and obtaining tax credits. The capital depends upon the number of animals and thus the amount of manure produced. Since the capital increases by only 60% for every doubling of required size of digester, the larger the unit the better. In order to work out the amount of biogas produced the list below may be helpful. The following biogas yields are to be expected per animal or organic waste unit: Beef Cow - 0.588 M3 per cow or 0.05 Kwh per cow. E.g. 10,000 head of beef will produce 5,880 M3 or 490 Kwh electricity. Dairy Cow - 0.984 M3 or 0.08 Kwh per cow. E.g. 5,000 head of dairy cows will produce 4,770 M3 400 Kwh electricity. Pigs - (Sows plus growers) 10,000 pig units will produce 1,000 M3 or 83 Kwh electricity. Chickens - (Broilers) 100,000 chicken units will produce 1,295 M3 or 108 Kwh electricity. Chickens - (Layers) 100,000 chicken units will produce 1,080 M3 or 90 Kwh electricity. It is thus important to determine the amount of waste material available and to know that organic matter content, which then enables a calculation to be determined on the biogas production and the removal rate of contained pollutants. Once that is determined then the sizing of the system required can be done. This determines the capital costs. Most of the economic ingredients are now in place other than determining the operational costs, which vary with different types of wastes and local labor costs. The following matrix may be of assistance in working out whether a project is economically worthwhile:
Thus if it can be determined that a return on capital of say 15% and above is possible, financial institutions would look at the project in a positive manner. David Stafford. August, 2005. |
|
Bioplex Home |
Background Info |
Project Research
Links | Acknowledgements | Contact Us Copyright 2005 Bioplex Project - Site Designed and Developed by WV Designs |
 |
