Economic Feasibility of Agricultural Biogas Production by Farms in Ukraine

Vitaliy Krupin,Adam Wąs,Sergii Kyryziuk,Galyna Trypolska,Roman Podolets

doi:10.3390/en15010087

Abstract

Renewable energy generation in Ukraine is developing slower than state strategies and expectations, with the installations for energy generation based on biogas currently being among the lowest in terms of installed capacity. Most of those involved in energy generation from agricultural biogas are large enterprises, while the small and medium-sized farms are far less involved. Thus the article aims to assess the economic feasibility of biogas production from agricultural waste by specific farm types and sizes, with a special focus on small and medium-sized farms. The research results present findings in two dimensions, first defining the economic feasibility of biogas installations in Ukraine based on investment costs and the rate of return at both the current and potential feed-in tariff, and second, analyzing the influence of state regulation and support on the economic feasibility of agricultural biogas production in Ukraine. The results emphasize that the construction of small generation capacities does not provide sufficient funds under the current feed-in tariff to meet the simple return period expected by the domestic financing institutions. Except for the general support programs for agricultural activities, there are no support funds specifically for biogas producers, while there is tight competition with wind and solar energy due to diversified feed-in tariffs.

Highlights

Global climate change is increasing its tempo and impact [1] on humanity, while the origin of this change is primarily anthropogenic [2,3,4,5] due to the excessive negative influence of the intense use of fossil fuels and the consequent environmental pollution
The availability of feedstock for biogas production is diverse, as farms differ substantially according to their livestock quantity
The study identified the economic feasibility of the development of renewable energy based on biogas projects in Ukraine, its key obstacles and legislation implications

Summary

Introduction

Global climate change is increasing its tempo and impact [1] on humanity, while the origin of this change is primarily anthropogenic [2,3,4,5] due to the excessive negative influence of the intense use of fossil fuels and the consequent environmental pollution. A swift shift to renewable energy is among key solutions to this growing problem and needs to be implemented by all technically feasible means These include energy generation from biogas, which is becoming an increasingly popular and important source of renewable energy from the standpoint of the circular economy [6,7,8], yet still falls behind the shares of solar and wind energy [9,10]. While biogas can be generated from numerous types of organic waste, they can be aggregated into either of the two major ones: solid and agricultural The latter includes the plant leftovers, weeds, leaf litter, sawdust, as well as the animal-originated solid, slurry and liquid waste. The utilization of biogas makes it possible to generate electricity and heat, reduce greenhouse gas emissions (methane and nitrous oxide from livestock waste), smooth overloads in the energy transfer grids and create new jobs in rural areas

Methods

Results

Discussion

Conclusion