Economic Assessment of Household Biogas Project

Abstract

One of the key concerns of biogas plants is the disposal of comparatively large amounts of digestates in an economically and environmentally sustainable manner. This work analyzes the economic performance (both economic feasibility and economic efficiency) of anaerobic digestion of a given household biogas project (Gongcheng project) based on cost–benefit analysis and DEA method. Firstly, the economic profitability and operation risk were analyzed based on economic indicators. Then, DEA approach was used to measure the relatively economic efficiency of eight household biogas projects in different part of China, based on which the optimization suggestions for economic efficiency can be obtained. Results show that as for the economic feasibility analysis, the net present value (NPV) index as a reflection of the economic feasibility of Gongcheng project is 4754.13 Yuan, showing it has good economic profitability. The payback period (PB) is 2.2 years for the biogas project, which is only 1/5 of the lifetime of the household biogas project (10 years). It can be seen that all the economic investment to support the operation of biogas project could be returned. According to the DEA analysis, the values of technical efficiencies for five biogas projects are smaller than 1 (technical inefficient), indicating that most biogas projects involved are economic inefficient. For further optimization, the input variables (“construction investment” and “maintenance cost”) of eight biogas projects should reduce 159.43 (4.55% reduction) and 9.07(5.03% reduction) units (unit: 104 yuan), respectively, to increase the economic efficiency. With regard to the output variables, “biogas benefits” variable should increase 33.59 (unit: 104 yuan) in total.