A general discussion on Economic Viability of a Bio-gas Plant

1. Cost and Economical
Viability of Biogas
Technology
Faizan Ahmad
E11-CE-01
M.Kazim Sial
E11-CE-39
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2. What is Biogas
 A gas obtained due to anaerobic decomposition of
organic matter (cattle dung)
 It is a mixture of methane, carbon dioxide, hydrogen
sulphide, water vapor, oxygen, nitrogen and
hydrogen.
 Biogas has been known as swamp gas, sewer gas,
fuel gas, marsh gas etc.
In Pakistan, it is more commonly known as ‘gobar’
gas.
 The digester in which the decomposition takes place
is known as BIOGAS PLANT
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3. Composition of Biogas
 Methane 50-70%
 Carbon dioxide 30-45%
 Hydrogen 0-1%
 Nitrogen 0-1%
 Water 0.1%
 Hydrogen sulphide 0-1%
 Oxygen 0-1%
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4. Common Uses of biogas
 Cooking
 Lighting
 Power generation
 Engine running
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5. Energy Equivalence of biogas
Use of 1m3 of biogas as fuel can save other
sources of energy as:
 0.52 litre of diesel
 0.62 litre of kerosene oil
 3.40 kg of wood
 12.30 kg of cow dung cakes
 0.43 kg of LPG
 1.46 kg of coal
 4.70 KW of electricity
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6. Commonly used organic matter
used for generation of biogas
 Cattle dung
 Kitchen and dining hall waste
 Vegetable market waste
 Poultry dropping
 Crop residue
 Pig and horse excreta
 Aquatic weeds such as water hyacinth
 Agro industrial waste
 Sewage Sludge
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7. Comparative Biogas Production of
Different Feed Stocks
S No Type of feed stock Gas Yield per
Kg ( m3 )
Normal Feed availability per
animal per day (Kg)
1 Cattle dung 0.036 10 to 15
2 Human excreta 0.07 0.5
3 Horse dung 0.045 10
4 Sheep dropping 0.042 1
5 Camel droppings 0.056 6
6 Piggery waste 0.08 2.25
7 Poultry droppings 0.062 0.18
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8. Overall scheme for anaerobic digestion of
organic matter
1st Phase- hydrolysis of complex organic materials,
i.e.,carbohydrates,fats,proteins, nitrogen compounds,salts
etc. into soluble organic compounds, i.e., sugars,fatty
acids,amino acids etc.
2nd Phase- soluble organic compounds are reduced to
simpler compounds, i.e., organic acids (acetic acid,
propionic acid etc.) , simpler alcohols and acetone.
3rd Phase- Organic acids ,mainly acetic acid and certain
other oxidised compounds are converted to methane and
carbon dioxide by methanogenic bacteria.
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9. Role of Biogas plants in saving of
environment
 Direct and immediate impact :
 Save other fuels and hence less stress on other fuels
 Using biogas as a kitchen fuel can prevent
deforestation and hence soil erosion
 Change of environment in the house as biogas is a
clean fuel. Other fuels being commonly used creates
pollution by generating smoke.
 The use of biogas prevents chances of eye diseases
and respiratory diseases. Hence healthy life of rural
woman.
 Clean kitchen and utensils and hence saving in the
time of women
 Clean House and hence less expenditure for
maintenance of house
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10. Costs of a Biogas Plant
Categories of costs
As far as costs are concerned there are three major categories:
 Manufacturing or acquisition costs (production costs)
 Operation and maintenance costs (running costs)
 Capital costs
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11. Production Costs
The production costs of biogas plants are determined by the
following factors:
 Purchasing costs or opportunity costs for land which is needed
for the biogas plant and slurry storage
 Model of the biogas plant
 Size and dimensioning of the biogas unit
 Amount and prices of material
 Labor input and wages
 Degree of participation of the future biogas user and his
opportunity costs for labor
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12. Running Costs
The operation and maintenance costs consist of wage and
material cost for:
 Acquisition (purchase, collection and transportation) of the
substrate
 Water supply for cleaning the stable and mixing the substrate
 Feeding and operating of the plant
 Supervision, maintenance and repair of the plant
 Storage and disposal of the slurry
 Gas distribution and utilization
 Administration
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13. Capital Costs
Capital costs consist of redemption and
interest for the capital taken up to finance the
construction costs. For dynamic cost
comparison the capital fixed in the plant is
converted into equal annual amounts.
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15. Economic Viability
The Economic viability of projects points out the financial
feasibility of investment alternatives. Three types of questions
need to be answered.
 Which project is the least expensive among an array of
options that produce the same output (least cost analysis)
 Which project shows the highest net benefit (benefit minus
cost) among an array of options (cost benefit analysis)
 Is a project a financially viable solution to the problem on
hand? (absolute viability)
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16. Investment Criteria
The dynamic approach deals with a consideration of
benefits and costs over several years.
Investment criteria are, as follows:
A. Net Present Value(NPV)
B. Internal Rate of Return(IRR)
C. Dynamic Unit cost criterion
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17. Net Present Value
The most common investment criteria is the NPV and
is defined as follows. Where
 PV - Net Present Value
 Ct - Costs in year
 Bt - Benefits in year t
 k - discount rate
 t - number of years from the present
 n - total number of the years of the analysis period
Please refer to example given below
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18. Internal Rate of Return
 A further criterion which can be applied for the
purpose of viability calculation is the internal rate of
return (IRR). It is the discount rate at which the
present value of cost is equal to the present value of
the benefits. In other words, it is the discount rate at
which the net present value is zero:
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19. Dynamic Unit Cost
Criterion
To gain additional transparency, the Dynamic Unit
Cost criterion (Cdyn) stands for the calculation of the
financial analysis performed on a per unit basis (if Ct
> Bt):
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21. As the Population is increasing; so is the
demand for energy is increasing, we
can use the Bio-gas as an alternative
fuel to cope-up with the growing
demands
Thank-You
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