7.3. Economic efficiency

General

To calculate the possible economic efficiency of a biogas plant which is decisive for the farmer's investment, the whole economic situation has to be taken into account. A calculation geared only to the national averages is often too unprecise as the use of a biogas plant will normally have a positive effect on the general living and working conditions. Since biogas can be used as kerosine or natural gas the price of biogas can quite rightly be compared with the prices of fossil sources of energy. If wood has to be purchased, the price of wood can be assumed. As far as the calorific value is concerned, prices in most countries only vary minimally. However, subsidies on sources of energy can substantially alter the price ratios. The prices for kerosine, bottled gas, wood and charcoal should be investigated in every case. The quantities for a comparison using calorific value and effect have already been stated in the chapter "gas demand". It is also important to find out in which ratios the previous sources of energy have been used and whether they can actually be substituted by biogas (e.g. biogas can normally not be used for heating rooms or smoking). The previous methods of fertilisation are important when recording the influence of slurry fertilisation. If only cattle dung is burned, the monetary benefit from dung saved can be valued with 0.4 of the benefit from gas whereas in all other cases this should be:

- 0.2 of the gas benefit for possible liquid fertilisation and
- 0.1 for composting

Construction costs for the biogas plant

The costs per cubic metre of digester decrease as volumes rise, consequently the size for an average, representative plant should be estimated. The size of plant amounts to:

- 120-fold of the quantity of dung put in daily at average expected digester temperatures over 25°C and

- 180-fold for temperatures between 20 and 25°C.

Since the final method of construction is determined during the course of the first years of the project, it is impossible to exactly calculate the building costs prior to the beginning of the project. The GTZ has a computer programme called "BioCalc" produced by BioSystem, yet this kind of seemingly precise calculation can only provide an idea as it is based on only one type of plant. Consequently, the following system is sufficient for a rough calculation:

- the cost of 6.5 sacks of cement times m³ digester volume plus - the cost of 5 day's work for a mason times m³ digester volume plus - the costs of 100 m gas pipes (1/2"), plus - the costs of two ball valves (1/2"), plus - the cost of gas appliances which are feasible for this size.

The individual prices are to be determined for the project location. The sum then includes material and wages. The distance from the biogas plant to the point of gas consumption was assumed as being 25 m (the 100 m used in the calculation include costs for connectors and wages). Where greater distances are involved, the cost for gas pipes will have to be increased in proportion. Macro and microeconomic coefficients

The calculations are based on a fixed-dome plant with an assumed service life of 15 years. Other data to be collected is:

- bank interest on small loans for possible agricultural credits - the inflation rate and exchange rates

For a macroeconomic appraisal, it should also be determined in how far concealed subsidies are included in the form of varying exchange rates for the import and export of energy, building materials and mineral fertilisers exist, or which goods on the market are already subsidised. Apart from this, the anticipated potential of the plant should be estimated since the justified expenditure for a dissemination programme is based on this.

Simple estimations of potential are possible if the number of households which could use biogas is calculated as a percentage of the total number of households. This can be determined by dividing the rural population by the average number of people per household.

A rough estimation is that the macroeconomic benefit of a biogas plant corresponds approximately to the costs of its construction. If the biogas plants are relatively expensive in comparison to other goods, a lower value should be assumed, e.g. 50 - 70% of the construction costs for all plants to be built annually when defining the macroeconomically justified costs of dissemination per year according to this formula.