Economic Analysis of Cow Manure Biogas as Energy Source for Electricity Power Generation in Small Scale Ranch

Abstract

Economic analysis of biogas application as energy source for electricity power generation is needed to motivate the user candidates (cow farmers) and to influence the government policy with the final goal is the larger implementation of biogas system for many purpose and the reducing of fossil fuels energy sources consumption. The economic analysis of 2 kW biogas power generation is done by determining the equipment installation and the raw material and operational needed, and with the data of electricity and organic fertilizer prices do the analysis by calculating the profit and loss, cash flow, and the economic parameters, i.e. Net Present Value (NPV), Internal Rate of Return (IRR), Profitability Index (PI), Average Rate of Return (ARR), and Payback Period (PP). Analysis result show that 2 kW electricity power generated from cow manure biogas as energy source together with the utilization of solid fertilizer from the digester sludge are economically acceptable to be implemented in small scale ranch. The IRR, PI, ARR, and PP values are respectively 18.6%-32.3%, 1.5-2.2, 15.4%-29.4%, and 3.3-5.1 years. Labor cost significantly influence the feasibility, higher than the influence of land investment. To get higher profit, it is suggested that the farmers do the daily digester operation and equipment maintenance themselves to reduce the operational cost.