Chapter eleven: The economics of anaerobic digestion

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Introduction
Analysis of economic feasibility for biogas construction
Economic analysis of simple biogas pit for household use in rural area
Economic analyses of cement biogas pits for household use in chinese rural area.
Economic analysis of community biogas plants in China.
Community level plants in India
Experience of economic evaluation in other countries
Economic analysis on electricity generation with biogas in Chinese rural areas
Industrial and commercial feedlots
Feasibility estimate for a turn-key community plant
Economic evaluation study for a full-scale village-community plant
Economic analysis

 

Introduction

For economic analysis, biogas facilities can be broadly divided into two categories: (1) those in which there is a significant economic cost associated with the handling and disposal of organic feedstocks from ecological and environmental aspects, and (2) those in which this cost is negligible. Examples of the first area include sewage disposal, agro-industrial waste treatment, and manure disposal from intensive livestock farming. The second category includes household and community scale plants in rural communities.

With the implementation of more legislation in Developed Countries concerned with environmental and ecological aspects of handling wastes, most industrialized countries already have experience in handling and disposing wastes, but as yet there are only very few cases where data on which to base relevant economic analyses exist. However, the few studies do provide some preliminary indication of economic justification.

Data on different economic aspects of biogas plants in rural areas are accumulating for fertilizer and for fuel uses which were both commonly obtained from the same source material, but are now handled differently. Most of the economic data and analyses come from the Chinese and Indian biogas programs, but other countries are catching up.

One of the forces behind renewable energy technology R & D, including biogas, has been the need to eliminate deforestation by using substitutes for traditional firewood. This secondary benefit creates two problems for analysis: the first is the one of its measurement and evaluation, and the second is one of comparing biogas with other energy technologies that have a different, and commonly smaller array of secondary benefits.

In China, improved sanitation has been a major objective of some biogas programs. Thus, secondary benefits include improved health.

Several reviews of cost benefit studies of biogas have been published, notably Barnett (1978), Sanghi (1979), Mukherjee and Arya (1980), ESCAP (1981), de Lucia and Bhatia (1980), Mazumdar (1982), Gunnerson and Stuckey (1983), Wellinger et al. (1988), Zhijine (1988), de Poli et al. (1988). The early reviews relate mostly to Indian experience while the Chinese economic evaluation study is of Ximbu village in Guangdong province. The latter is for an anaerobic digestion system in general. The Chinese (fixed dome) design has also been evaluated in Thailand (Thongkaimook, 1982) and India (Singh and Singh, 1978). Limited information is available on small scale and community units for the Philippines (Galano et al.; Alicbusan et al.), Nepal (Berger, 1976; Pang, 1978; Pradhan,), Thailand (Prasith-raithaint et al. 1979; Thongkaimook, 1982), Bangladesh (Rahman, 1976), Ethiopia (Tarrant, 1977), Kenya (Pyle, n.d.), Honduras (Roesor, 1979), Pakistan (Qurishi, 1978) and Fiji (Chan, 1975).

 

Analysis of economic feasibility for biogas construction

The anaerobic fermentation process is an important measure for the solution of fuel shortage in rural area, as well as an important measure for using biomass resources efficiently; for accelerating a common development of agriculture, forestry, husbandry, aquaculture and secondary production; for improving agricultural profitability; for protecting the environment and for good rotation in agricultural production. It is also an important measure for improving and the quality of life, and for the achievement of modernization In rural areas.

One important point for the popularization of a technology is to examine its economic benefits. If profitability is higher, a condition for rapid popularization is available. If economic benefit is low, it is difficult to popularize the technology. The factor of environmental protection is not popularly acceptable, but can be popularized by preferential economic policies, such as in credit and tax.

The production of biogas from biomass by fermentation techniques requires the construction of a biogas pit and a complete system for gas storage, distribution and utilization. Raw materials, labour, etc. for constructing the equipment make up the capital investment of biogas production and utilization. For combined biogas pits, costs for the building of toilets and pigsties need not be included, but the costs of renovating existing toilets for excrement collection should be included.

Economic evaluation of small scale biogas plants requires measuring and valuing the fertilizer and fuel output, then comparing the gross value of output with the costs of plant construction and operation to arrive at a benefit-cost ratio or other index of value.

It is also necessary to include in periodic costs for the maintenance of biogas equipment. The cost of labour and material for managing and maintaining the biogas pits are also included here.

Production and utilization of biogas are beneficial in many ways. They have both direct and indirect economic benefits and social benefits. The direct economic benefit of biogas as a fuel, in place of firewood and coal, is a reduction in fuel expenses. Compared with kerosene lamps, biogas lamps not only reduce the cost of fuel, but also increase light level and improve living quality. Compared with direct burning of stalks, biogas produced from biomass fermentation increases the quantity of organic manure which can be sold to production teams, increasing the direct benefit to farmers.

Biogas production also has many indirect benefits, which sometimes play a very important role in biogas development. For instance, crop stalks, when no longer burned, may be used as animal fodder, increasing the income from animal husbandry, while still providing raw material for biogas production. Farmers can use the time saved from firewood collection for additional production, and thereby increase their income; fermentation effluent can be used as fodder to raise fish, mushrooms and earthworms, and as protein fodder for poultry. Compared with kerosene lamps, biogas lamps improve lighting conditions, making it possible for farmers to embroider, weave and tailor after dark. An investigation of Haian County, in Jiangsu Province, shows that it is the latter benefit that has made farmers actively demand the development of biogas.

Furthermore, biogas development brings about social benefits in many respects. For example, the quantity of animal protein supplied to the society may increase as a result of a reduction of direct burning of stalks and development of animal husbandry. As the problem of fuel for the farmer's daily use is solved, trees are protected and forests are developed. The protection of trees and increase in vegetation areas can reduce soil erosion and improve ecologic balance. The increase in organic manure can result in using less chemical fertilizer, improving soil and increasing production. Environmental improvement in rural area reduces illness and build up people's health. Besides, in regions where biogas is used to generate electricity, cultural, recreation and spare time study conditions can also be improved. Although these benefits are very important for the whole society, they are often not of direct economic benefit to investors in biogas installation, and it is impossible to calculate them accurately in monetary terms. We will not, therefore, consider these benefits in the following economic feasibility analysis.

 

Economic analysis of simple biogas pit for household use in rural area

(Based on Zhijine (1988) from Energy Research Institute in China)

Most biogas pits used for families in rural areas are 6 - 8 m3, mainly ambient temperature fermentation models. In the past, most of the biogas pits constructed were simple pits made of clay, lime and sand. These pits have the advantage of readily available materials, relatively simple construction methods and low cost, only 30 - 40 Yuans per pit. However, they are of low quality and they are likely to leak water or gas. In addition, they have a short service time: for those that have good maintenance conditions, the service time is above 10 years, but usually they can only be used for about five years. For those are handled improperly, the service time is even shorter.

Observing the calculation in Tables 11.1 and 11.2 one can notice that the economic benefits of these pits are quite high. In the calculation, 40 Yuans represents the construction cost, at an annual rate of interest 6%, and 5 Yuans the annual maintenance costs, including materials and labour. Table 1. is service time. If all cost" of a biogas based on a 5-year pit are to be paid back in its service time, the average benefit each year must be not less than the R value calculated from the following equation:

R = P * {[i(1+i)n]\[i(1+i)n-1]} + I = 40 *{[0.06(1+0.06)5]\[(1+0.06)5-1]} + 5 = 1454 (Yuan)

When the price for straw is 6 cents/kg, this value equals the cost of 242 kg of straw, or the amount of straw consumed by a rural household in one month. Therefore, if a biogas pit operates normally for 1\ months, the direct economic benefit obtained from saving stalks and kerosene for lighting, and from increasing organic fertilizer, can pay back all costs, including interest, within 5 years. When a pit operates normally for more than 6 months per year, total investment can be returned in the same year.

However, economic benefits, great or little, relate to the option selected. When the use of biogas conserves coal, rather than straw, and 25 Yuans per ton of coal is used in calculation, 14.54 Yuans of income equals the price of 580 kg coal, or the amount consumed by a rural household in 4 months. Thus, the pit has to operate normally for 3 months to pay back all costs in 5 years.

In Table 11.2, the service time of a biogas pit is put at 3 years, during which all costs are to be paid back. The average benefit each year is required to be not less than:

R = 40 *{[0.06(1+0.06)3\]\[(1+0.06)3-1]} + 5 = 20.04 Y

Given the price of straw at 6 cents per kg, the income equals the price of 350 kg straw. This means that, so long as a biogas pit operates normally for 2 months/year, the benefit obtained will pay back all costs within 3 years.

Table 11.1: Costs and benefits (in Yuan) of a simple biogas pit plant (Cost pay back in n=5 years)

YearMaintenance
cost
(I)
Benefit
per year
(R)
Coat transferred
to next year
 
1 40 2.4 5 14.5 32.
2 32.9 1.97 5 14.5 25.37
3 25.37 1.52 5 14.5 17.39
4 17.39 1.04 5 14.5 8.93
5 8.93 0.54 5 14.5 - 0.03

Table 11.2: Cost and benefit (in Yuan) of a simple biogas pit plant (Costs paid back in 3 years)

Year Coat per
year
(P)
Interest
per year
(i=6%)
Maintenance
cost
(I)
Benefit
per year
(R)
Coat transferred
to next year
1 40 2.4 5 20.00 27.40
2 27.40 1.64 5 20.00 14.04
3 14.04 0.84 5 20.00 -0.12

 

Economic analyses of cement biogas pits for household use in chinese rural area.

Simple biogas pits can save investment, but they are of low quality and often leak water or gas. Besides, they have a short service time. Because of this, in recent years, a new design of pit is gradually being popularized in rural areas. Constructed of cement and covered with a coating to prevent gas leakage, these pits are of high quality. However, their construction costs are high. The capital cost of a pit is 150-200 Yuans, and the service time is usually above 15 years. At the higher rate of construction cost, at 6% interest, plus 5 Yuans for annual maintenance, an annual average benefit of:

R = 200 * {[0.06(1+0.06)15]\[(1+0.06)15-1]} + 5 = 25.57 (Yuan)

will pay back all investment and interest in 15 years. In regions where price of straw is 6 cents/kg, the benefit equals the cost of 427 kg straw. Hence, as long as the biogas pit operates normally not more than 3 months a year, the benefit obtained from saving stalks and kerosene and from increasing fertilizer will pay back all costs in 15 years. Since, on average, these pits can operate normally 8 months in the year, when used for cooking, 1300 kg of stalks are saved, that is, 78 Yuans at 6 cents/kg; when for lighting, it can save 4 Yuans of kerosene: the average direct economic benefit available is 82 Yuans annually. As analyzed in Table 11.3 the investment cost (including interest) of a biogas pit plant can all be paid back in less than 3 years.

If biogas replaces coal, the annual average benefit of 25.6 Yuans equals the cost of one ton of coal. Only when the pit operates normally for more than 6 months can all costs be paid back in 15 years by its direct economic benefit.

 

Economic analysis of community biogas plants in China.

As a result of the appearance of all kinds of specialized households, biogas pit plants for household use no longer meet the demands of economic development in rural areas. Quite a number of rural households no longer rent farm lands, or raise livestock, so they have no raw material to produce gas. There are, however, other specialized households that raise livestock (pigs, cows and chickens, etc.) and consequently have a great amount of animal excrement as raw materials for gas production. Centralized biogas supply is therefore a developing trend for energy production in China's rural areas.

Table 11.3: Cost and benefit (in Yuan) of cement pit plant (when operated normally for 8 months per year)

Year Coat per
year
(P)
Interest
per year
(i=6%)
Maintenance
coat
(I)
Benefit
per year
(R)
Coat transferred
to next year
1 200 12 5 82.00 135.00
2 135 8.1 5 82.00 66.10
3 66.1 3.97 5 82.00 -6.93

Although the centralized biogas supply system has many advantages, its capital cost is much greater than that of the family biogas pits. According to the systems constructed, the average investment for a household is 300 - 600 Yuans, up to double that of the family biogas pit plant. As a result, its economic benefit is much lower. At present, centralized biogas supply systems are developed as a public welfare service, irrespective of their economic benefits. However, there must be some economic benefits, if the system is to be expanded rapidly. Up to the present day, the largest centralized biogas supply station is in Qianjin Farm, in Chong-ming County. At this station, 65 50 m biogas pits have been built, supplying gas to 720 households of farmers for daily use.

Investment in this system was 547,000 Yuans, and the annual rate of interest is 6%. Operating costs include wages for six workers and maintenance costs: 6600 Yuan per year. The direct economic benefit is that the cost of coal it replaces equals about 40,000 Yuans per year. Livestock and poultry excrement is used as raw material for fermentation, which ha" the same benefit as a fertilizer before and after fermentation. Because of this, its input of cost equals the output of benefit and therefore is not considered in the analysis. Table 4 shows that when calculations are based on the index above, the payback period for capital will be 90 years, if only the economic benefit of replacing coal is taken into account.

Table 11.4: Analysis of economic benefit of community biogas plant at 10,000 Yuan (compared with coal saving option)

Year Cost per
year
(P)
Interest
per year
(i=6%)
Maintenance
coat
(I)
Benefit
per year
(R)
Coat tranaf
erred to next
year
1 54.70 3.28 0.06 4.00 54.64
2 54.64 3.28 0.06 4.00 54.58

If the system provides biogas to rural residents, assuming that each household saves 2000 kg straw (supplying gas all the year round) the annual economic benefit of a household would be 120 Yuans at 6 cents per kg straw, and the total benefit to 720 households would be 86,400 Yuans. On this basis, all cost could be paid back in less than 10 years (Table 11.5). According to economic analysis, the development of community biogas plants in rural areas is economically feasible. However, when compared with the use of coal, its economic benefit is not great. It is therefore necessary to make further efforts to reduce the investment and construction cost of centralized biogas supply systems, and increase gas production. Without higher economic benefits it can be only run as a welfare service.

Table 11.5: Analysis of economic benefit of community biogas plant at 10,000 Yuans (consistent with straw- saving option)

Year Cost per
year
(P)
Interest
per year
(i=6%)
Maintenance
cost
(I)
Benefit
per year
(R)
Coat transfyear
erred to next
year
1 54.70 3.28 0.06 8.64 50.00
2 50.00 3.00 0.06 8.64 45.02
3 45.02 2.70 0.06 8.64 39.74
4 39.74 2.38 0.06 8.64 34.14
5 34.14 2.05 0.06 8.64 28.21
6 28.21 1.69 0.06 8.64 21.92
7 21.94 1.32 0.06 8.64 15.26
8 15.26 0.92 0.06 8.64 8.20
9 8.20 0.49 0.06 8.64 0.71
10 0.71 0.04 0.06 8.64 -7.23

 

Community level plants in India

The introduction of large scale (greater than 40 ma) plants for use by rural communities has been prompted by two important considerations. First, the alternative of a household plant is not an option for most Indian households. Only 5% of the cattle-owning households have the minimum 5 animals needed to provide feedstock (Prasad et al., 1974), and perhaps even fewer could bear the additional cash outlay involved in the substitution of biogas for firewood and dung, previously collected by family labour. Second, economy of scale is one of a number of potential techno-economic advantages of community over household plants, though this partly offset by the larger volumes of dung required at one site, and in the greater organizational requirements.

Two community plants have been evaluated in some detail; one at Fateh Singh Ka Purwa in Uttar Pradesh by Bahadur and Agarwal (n.d.), Ghate (1979), and Bhatia and Niamir (1979), and one in Xubadthal, Gujarat by Maulik (1982). Evaluating community plants has the same drawback as in household units, of valuing input and output, so it is not surprising that three evaluations of the Uttar Pradesh plant arrived at three different economic benefit-cost ratios; 1.14:1, 1.54:1 and 0.6:1. Moulik's (op. cit.) financial analysis of the Gujarat plant did not include a final estimate of financial viability, but it was evident from current performance that the profit from plant operation would not meet the loan and interest payments due. Other analyses agreed that the plant was not financially viable, though Ghate (op. cit.) suggested that at least part of the deficit on the costs of cooking, lighting and water supply (from a biogas powered tube well) could be met through a surplus generated by the dual fuel engine used for crop processing.

Financially nonviable plants can be justifiably supported through state subsidies, if overall analysis is sufficiently positive. The basis for an accurate economic benefit-cost analysis is still lacking, however.

One important difference from the analysis of household plants is the greater variety of possibilities for the use of gas from a community plant. Gas availability varied in the Fateh Sing] Ka Purwa plant from below 1900 ft3 /day in winter, to above 2700 ft in summer (Bhatia and Niamir, op. cit.). This gas was used for cooking, a generator to supply lighting and to power a tube well, and a dual fuel engine running a flour mill, a thresher and a chaff cutter. The proportion of gas distributed to these different end uses has been considered to be a critical determinant of both the financial and social worth of the plant because both market and shadow prices of the gas will vary. An alternative approach to economic evaluation assumes the highest value use until the demand is met, then the next, etc. This higher use(s) requires a unique fuel characteristic with unique replacement value. The combination of end uses that will maximize benefits depends upon the assumptions used to value gas put to different end uses. In their social analysis, all three studies used the shadow price of soft coke or coal to value biogas in cooking. They arrived at three different estimates: 11.6, 15 and 38.3% as the share of cooking in the total benefits. Bhatia and Niamir (op. cit.) also used the price of dung and firewood to value biogas in cooking, giving a second estimate of 63% of total benefits from this end use. In this second estimate, dung was valued using the shadow price of imported fertilizer. Under this assumption over half of the total benefits were due to the use of dung for fertilizer, instead of for cooking which is now carried out using biogas. Since cooking uses about 60% of the gas, these widely differing percentages (11.6 to 63%) can be used to support a case for or against the use of biogas for cooking in preference to other end uses. Different initial investment and operating costs will also affect the calculation). Financial analysis of the value of different end uses was less equivocal; non-cooking uses, particularly substitution for diesel fuel, are better.

What these ambiguous results demonstrate is the inability of social and financial analysis to determine policy in the absence of a strategic energy policy framework. The possible deforestation and loss of agricultural output associated with the use of firewood and dung has to be evaluated in conjunction with the foreign exchange costs of diesel imports in the case above, but this is only one example of the types of valuation implicit in all energy policy decisions. A second, and equally crucial limitation, is the difficulty analysts face in incorporating secondary benefits. Some, such as health benefits, are extremely difficult to quantify, while others, such as improved community spirit through a successful biogas program, are impossible. In the community programs discussed above, a variety of secondary benefits were acknowledged by participants as being very important to their perception of the value of biogas plants. This was particularly true of women who benefitted from improved kitchen conditions, and savings on cooking time.

The technology evaluated in the above studies was an expensive KVIC design. In a Southern Indian village a community plant is being built to meet the specific village energy requirements, and financial viability is possible (Lichtman, 1983). It is worth noting, however, that both the plants discussed above were also financially viable on paper. A second, and critical feature of the Southern Indian program is the involvement of the villagers in the planning of the biogas plant. In both the plants discussed above the chief reasons for their difficulties were organizational, rather than economic or technical. Moulik in the Gujarat study, and Bahadur and Agarwal, in the Uttar Pradesh study, provide detailed descriptions of numerous organizational and operational problems that were related to village social structure, and the relationship between the villagers and the implementing agency. All the authors of these studies agree that the solution of such social problems with community plants requires the involvement of users from the very first stages of planning.

 

Experience of economic evaluation in other countries

Evidence on household and community plants from other countries is extremely scarce and provides little additional knowledge that might resolve some of the uncertainties that the Indian studies have raised. Only a few of the studies available were based on actual user experience. Rahman (1976) gives a breakdown of costs and benefits of a modified Indian design used in Bangladesh, without any firm conclusion on its economic viability. However, with a net annual operating profit of Tk.581, and an initial construction cost of Tk.7,600, only very low interest rates on a loan for construction would make the plant financially viable.

Of three Nepalese desk studies based on Indian design (three cubic meter) plants, only Berger (1976) estimated a positive benefit-cost ratio (1.67:1), while Pradhan (n.d.) and Pang (1978) argued that construction cost reductions were critical if biogas was to be financially feasible for any but the richer farmers.

In Thailand, an empirical study of Indian design plants by Prasith-raithsint et al. (1979) found that household plants on average had a payback period of 5 years. No other estimates of economic worth were calculated. No benefits were claimed for the slurry, as this we" not used by plant owners. The high cost of plant-, a lack of technical know-how, the availability of other fuels, and the shortage of dung were the main reasons given by the 94.5% of current nonusers who said they did not want a plant.

A desk study by Roeser (1979) of two household plants in Honduras showed that the economic viability of the pants depended critically upon the relative time spent on dung and firewood collection. At low dung collection times, the larger plant (360 ft3) was viable. The smaller plant (180 ft3) was viable only when cooking, rather than lighting, was the use adopted. However, in the absence of subsidized kerosene for lighting, use of biogas for lighting was viable at low dung collection and preparation times. He recommended further study before diffusing biogas, and drew attention to the importance of comparing the use of a biogas plant for cooking with the use of an improved stove. If the fuel efficient "Lorena" stove could reduce firewood collection time to one hour per day, the use of biogas for cooking was not as profitable to the household as use of the stove.

Tarrant (1977) undertook a comprehensive evaluation of the use of a community plant for generation of electricity in Debarek, Ethiopia. He concluded, using three different measures of social worth, that the project was viable at current oil prices (the fuel used to value biogas), but that the project was not financially viable. However, the detailed figures provided on financial and social costs and benefits suggest that a subsidy to cover the financial deficit would still leave the project socially viable. He concluded that more detailed field evidence was required on three critical parameters; electricity demand projections, slurry transport costs, and the value of dung, to firm up the estimates presented.

 

Economic analysis on electricity generation with biogas in Chinese rural areas

China has a vast rural territory and the coverage of large electricity grids is limited. At present, there are approximately 50% households in rural area which do not have electricity. Even in regions connected with the grid, electricity supply is not always guaranteed, because of electricity shortage and restrictions on consumption. Thus, in areas where biogas resource is rich, the development of small size biogas electric power station to provide electricity to rural areas is of great interest to improve the quality of life, and to increase cereal and fodder production, as well as to facilitate the establishment of country town industries that consume less electricity.

When the price of electricity from the large grids is compared with that of a biogas electric power station, the cost of diesel oil for biogas-diesel dual burning generators is 4 cents per kw/h, while electricity provided by the grid for agricultural production costs only 5 cents. Hence, biogas generation of electricity provides almost no benefit. Though the price difference of electricity for residential use is great, electricity is supplied only 3 - 4 hours a day and economic benefits are low. As a result, the investment in biogas would never be paid back, in the present situation.

When compared with diesel oil generation, biogas electric generation may have a rather high economic benefit. But the common problem in biogas electric generation in rural area is that the capacity of generation unit and biogas pit plant do not form a complete system. A generation unit with a capacity of 1 kw is provided with a 20-25 m biogas pit plant, with ambient temperature fermentation. One kw generation capacity can only provide 3-5 kwh of electricity each day. For 360 days of a year, it can only generate 1000-1500 kwh of electricity. Since its equipment utilization hour is too low, its economic benefits are reduced.

Results of similar calculations show that biogas generation equipment has a life of not more than 2000 hours. This means its direct economic benefit can not pay back the increased investment cost based on the above assumptions. If indirect benefits, such as if electric generation would stimulate industry and sideline industry development, and increase farmer's incomes as plus social benefits, were taken into account, and where diesel oil supply is limited, the construction of biogas electric power station would be beneficial. From the economic analyses, we see that higher yield gas producing fermentation processes must be developed, and utilization hours of generation equipment should be increased for biogas electric generation to be economically attractive.

 

Industrial and commercial feedlots

Developed countries using anaerobic digestion to treat industrial wastes include Israel, the United States, the Federal Republic of Germany and the Netherlands. In developing countries only a few large scale units are known to exist, although some laboratory work has been carried out in India, Brazil and China. The largest number are in China, and Marchaim (1990) obtained some tentative economic data during a recent study tour in China and Thailand.

Experience in the use of anaerobic digestion to treat the manure generated in commercial feedlots in Developing Countries is also limited, although the one case of Maya Farms in the Philippines has been reasonably well documented.

Maya Farms is one of the pioneers of large scale biogas applications in the developing countries, and the technology forms an integral part of an intensive animal rearing farm located within Metropolitan Manila. Manure from 22,000 pigs is fed into a variety of batch and continuously fed digesters which produce a total of 66,000 cubic feet of biogas per day. The gas produced is used directly as a fuel in the processing plants, or substitutes for gasoline in a number of engines which drive a variety of equipment and machinery. In addition, some of the gas is used in motors to generate electricity which is used on site.

The "slurry is separated into two fractions, liquid and solid, and the liquid is used to fertilize crops and feed fish ponds, while the solids are reefed to pigs, cattle and ducks. These solids supply around 10 to 15% of the total feed requirements of the pigs and cattle, and 50% of the feed for the ducks.

Based on actual operating data from Maya Farms, Judan (1981) estimated the benefits from small (4 sows), medium (48 sows), and large (500 sows) farms using biogas unit" in the Philippines. In hi" analysis he calculated benefits in terms of savings on inputs of fuel, feed and fertilizer that would have been necessary in the absence of the biogas unit. For the small farm, 27% of the benefits came from fuel savings, 54% from animal feed savings, and 19% from the fertilizer saved. In the medium farm, the respective savings were 36, 52 and 12%, while in the large one they were 21, 79 and 0%, since in this case no crops were fertilized. The most important benefit is derived from re- feeding the slurry solids to the pigs.

These results are qualitatively consistent with Israeli experience in which feeding a 12% solids slurry from thermophilic digestion of dairy manures to fish ponds or beef feedlots provided most of the benefits (Marchaim, 1983).

Judan (op. cit.) provides a summary statement of the investment and operating expenses of Maya Farms, and estimated payback periods of 39 months (small), 21 months (medium), and 30 months (large). This study provides a strong economic case for the development of integrated systems that efficiently utilize all the outputs from a biogas unit by substituting for purchased farm inputs. However, since this conclusion rests on the benefits accruing from re-feeding the sludge solids to animals, caution should be exercised as there is still some controversy about the effects of re-feeding (Ward 1982).

One study evaluated experience with anaerobic digestion in industrialized countries with particular reference to its transferability to Developing Countries. Marchaim et al. (1981) describe a conceptual 200 m thermophilic digester system in Israel being fed cattle manure (15 to 18% total solids), where the biogas was used for heating and power generation, and the slurry to fertilize crops, feed fish, cultivate mushrooms, and as a partial feed for sheep and calves. Their positive economic analysis also depended on the income generated from the slurry in the form of feed. When no income was available from the slurry, the "break even" point (i.e., when the net present value of the whole operation is zero) occurred when the price of gasoline was US$1.22 per gallon. If all the slurry were sold as feed, then the plant would be economically viable at any gasoline price above US$0.23 per gallon. They claimed this analysis would be valid in similar situations in Developing Countries, e.g., a village cooperative in Gujarat, India; however, this claim should be regarded with some caution since the technology used (thermophilic, continuous mixing, high loading rates) is quite sophisticated, and may cause problems in Developing Countries.

Fig. 11.1: Schematic system for an anaerobic methanogenic thermophilic fermentation process for farm wastes. A. Macerating system for rumen content and manure. B. Waste pit. C. Pump. D. Heat exchange system. E. Digestion system. F. Biogas mixing system. G. Intermediate container. H. Slurry separator. J. Compressor. K. Biogas storage system. L. Steam/electricity generator. M. Solid (Peatrum) fraction collector. N. Liquid fraction collector.

 

Feasibility estimate for a turn-key community plant

An economic feasibility study must be based on the know-how acquired on laboratory scale and pilot-plant scale, and is performed after several years of experience in full scale and commercial plants of the anaerobic methanogenic fermentation of diverse agricultural wastes (dairy manure, poultry manure, cotton stalks, slaughterhouse wastes, etc.). The anaerobic digestion system was developed in order to solve the acute question of wastes in feedlots of farms - how to get rid of an ecological problem that caused in many cases high expenses in fines and levies to the local health authorities. A waste utilization system is made up of three main sections: the microbiological, engineering and economic sections. The overall goal of the integrated system is to develop a method that will utilize the manure of cattle and other agricultural wastes, converting them into biogas and other materials that have marketable value, while solving the ecological problem of the farm wastes. For this purpose, an example of the anaerobic thermophilic methanogenic fermentation is described here. The Figure below represents an integrated anaerobic thermophilic digestion process schematically, based on Klinger and Marchaim (1987).

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