Determining Financially Feasible Digester Size and Greenhouse Gas Emission Reduction of Covered Lagoon Biodigester through Computer Simulation

Transcription

1 4: (2014) Determining Financially Feasible Digester Size and Greenhouse Gas Emission Reduction of Covered Lagoon Biodigester through Computer Simulation Arthur It. * Visayas State University, Visca, Baybay City, Leyte, Philippines Abstract Covered lagoon biodigester (CLB) is a facility which converts animal waste into biogas for electricity generation using biogas engines. In addition to electricity, it produces biofertilizer as by-product. It greatly reduces greenhouse gas (GHG) emissions from animal farms to the atmosphere through biogas flaring or efficient high-temperature burning. The GHG emission reduction is necessary to help minimize global warming which triggers climate change and natural disasters causing vast damages. Many investors are, however, hesitant in starting a CLB project due to the thousands of dollars it needs as investment. To provide essential decision-making information to investors, engineers and farm owners, a study was conducted to determine the existence of financial feasibility in industrial-scale CLB and if feasibility exists, to further determine the minimum feasible size and the corresponding GHG emission reduction. Two computer programs were used to simulate variations in digester size and to determine the corresponding changes in costs, GHG emission reduction and values of feasibility indicators. Results reveal that, for farms benefited by the Clean Development Mechanism (CDM), the minimum financially feasible digester size is 4,258 m 3 equivalent to 240 sow level with electricity generating potential of 38 kw or 296,596 kwh/year. The corresponding GHG emission reduction is estimated at 1,059 tonnes/year of CO 2 equivalent. For non-cdm farms, the minimum financially feasible digester size is 5,855 m 3 equivalent to 330 sow level with electricity generating potential of 52 kw or 407,823 kwh/year. The corresponding GHG emission reduction is smaller and estimated at 106 tonnes/year of CO 2 equivalent. It is concluded that there exists a feasible CLB digester size and the minimum feasible digester for CDM and non-cdm swine farms are 4,258 m 3 and5, 855 m 3, respectively. The corresponding emission reductions are 1,059 tonnes and 106 tonnes per year of CO 2 equivalent, respectively. It is further concluded that the bigger the digester the more it is financially feasible and the higher is the emission reduction. Keywords: covered lagoon biodigester, biogas, financial feasibility, greenhouse gas emission Introduction In Doha, Qatar, on 8 December 2012, the Doha amendment to the Kyoto Protocol was adopted. In this amendment, industrialized countries renewed commitment to reduce greenhouse gas or GHG emissions by at least 18% below 1990 levels for the 8-year period from 2013 to 2020 (UNFCCC, 2014). The GHG emission reduction is necessary to help minimize global warming which triggers climate change and natural disasters. These disasters cause vast damages. One mechanism under the Kyoto Protocol is the Clean Development Mechanism or CDM wherein farms using GHG emission reduction facilities can be compensated in terms of carbon credit with monetary equivalent for the first 10 years of operation. One of such facilities is the covered lagoon biodigester or CLB. CLB is a large-scale biogas plant which is a good source of energy for food production and processing in off-grid areas (RCM Digesters, 2014). Biogas plant gives 2 benefits energy generation and pollution control (, 1992). CLB is used in electricity generation (Moser, 2012) and produces biofertilizer as by-product. It also exemplifies good environmental management (Wisterland, 2014). Many CLB projects, however, turn to *Correspondence: aitambong@yahoo.com

2 be losing businesses. One of the primary reasons is inappropriate digester size. This causes hesitation of investors to start a CLB project. To provide essential decision-making information to investors, engineers and farm owners, this study was conducted. This study has the following objectives: 1. To determine the existence of financial feasibility in industrial-scale CLB, 2. To determine the minimum financially feasible digester size of CLB, 3. To quantify the corresponding greenhouse gas emission reduction, and 4. To evaluate the sensitivity of feasibility indicators to change in farm sow level. Materials and Methods Programs Used The study used 2 programs: Swine Covered Anaerobic Lagoon Design (SCALD) Tool and Bytex Feasibility Analyzer (BFA). SCALD Tool was developed by the Global Methane Initiative, formerly Methane to Markets Partnership, for CLB digester sizing, costing and quantifying GHG emission reduction (Methane to Markets Partnership [MMP], 2010). The software was provided by the United States Environmental Protection Agency (USEPA), one of the partners of Global Methane Initiative. Bytex Feasibility Analyzer was developed by Arthur It. for feasibility analysis and feasibility study preparation of any project with quantifiable investments, operating costs and benefits (, 2013). The BFA software was obtained directly from its author (aitambong@yahoo.com) at the Department of Agricultural Engineering, College of Engineering, Visayas State University, Visca, Baybay City, Leyte, Philippines Data Gathering As required in the feasibility analysis, prices of materials used for CLB construction and electricity rates were gathered quarterly from January 1, 2013 to March 31, Data were gathered in the following Philippine cities distributed in Luzon, Visayas and Mindanao: cities of Pasay, Makati and Quezon for Luzon; cities of Cebu, Baybay and Ormoc for Visayas; cities of Iligan, Cagayan de Oro and General Santos for Mindanao. As needed in the determination of CLB design parameters, the average daily maximum temperature data were also gathered in the above cities. Computer Simulation The computer simulation employed a quick computer-aided method to determine the minimum financially feasible CLB sizes for both CDM and non-cdm benefited farms. The method, shown in Figure 1, consists of 3 steps. The procedure is indicated in each step. The computer programs used in Steps 1 and 2 are shown in Figure 2 and Figure 3, respectively. Estimation of GHG Emission Reduction Using the SCALD Tool, the corresponding GHG emission reduction in tonnes of CO 2 equivalent/year was estimated for every resulting digester size. The estimation adopts the applicable design values and conversions of the Inter-governmental Panel on Climate Change (IPCC), United States Environmental Protection Agency (USEPA) and Kyoto Protocol Reference Manual on Accounting of Emissions and Assigned Amount. Among the conversions used are 0.48 m 3 CH 4 /kg volatile solids of manure and CH 4 being 21 times more destructive than CO 2. Results and Discussion Data Gathered Summary of data gathered is shown in Table 1. These data were used in the design and digester sizing of CLB, costing of CLB, 137

3 Figure 1: Quick 3-step computer-aided method of determining financially feasible digester size. Figure 2: The Swine Covered Anaerobic Lagoon Design Tool. Figure 3: The Bytex Feasibility Analyzer. 138

4 Table 1: Average of quarterly data on cost of major CLB construction materials, electricity rates and temperature, Jan to March Data Category/ Specification Luzon Cluster (Pasay, Makati, Quezon Cities) Visayas Cluster (Cebu, Baybay, Ormoc Cities) Mindanao Cluster (Iligan, CDO, Gen.San.) Average US$ PHP US$ PHP US$ PHP US$ PHP A. CLB Construction Materials* 1 mm HDPE Geomembrane, 3, ,000 None None None None 3, ,000 per roll Geotextile, per sq. meter None None None None Cement, per bag mm deformed bar, per piece B. Electricity Rate** Electricity and Charges, per kwh C. Temperature*** Average Daily Maximum, deg. C *Source: Suppliers, Rate PHP /US$ **Source: KiloVox, Rate PHP /US$ ***Source: Weatherbase estimating the values of GHG emission reduction, financial feasibility analysis and sensitivity analysis. financially feasible digester is 5,855 m 3 equivalent to 330 sow level with generating potential of 52 kw or 407,823 kwh/year. Financial Feasibility After a series of feasibility analyses and sensitivity analyses using the BFA software, it was found out that there exists a financially feasible CLB digester size. The values of feasibility indicators (NPV, IRR, BCR) and feasibility remarks are found in Tables 2 and 3. The financial benefits are primarily derived from the equivalent revenues of electricity generated and the monetary equivalent of CDM carbon credits. For farms benefited by the Clean Development Mechanism (CDM), the minimum financially feasible digester size is 4,258 m 3 equivalent to 240 sow level with electricity generating potential of 38 kw or 296,596 kwh/year. For non-cdm farms, the minimum GHG Emission Reduction Tables 2 and 3 also show the baseline GHG emission and emission reduction by sow level for farms benefited by the Clean Development Mechanism (CDM farms) and also those which are not benefited by the mechanism (non-cdm farms). The baseline value is the potential GHG emission when no CLB is installed. Graphical presentation of the baseline greenhouse gas emission and emission reduction for both CDM and non-cdm farms is shown in Figure 4. The figure indicates that CDM farms have GHG emission reduction of about 86% of baseline emission while non-cdm farms have only about 6%. The high emission reduction in CDM farms is due to the use of biogas flaring. Flaring attains 139

5 Table 2: CLB digester sizes, GHG emission reduction, energy generation and financial feasibility indicators for CDM benefited farms obtained using the computer-aided method. Parameter Sow Level CLB Digester Volume, m 3 3, , , , , , Baseline GHG emission, tonnes CO 3 /yr equiv. 1, , , , , , GHG emission reduction, tonnes CO 2 /yr equiv , , , , , Generator Size, kw Potential Energy Generation, kwh/year 259, , , , , , Cost, US $ 267, , , , , , Cost, Million PHP Net Present Value, US $ -8, , , , , , Net Present Value, Million PHP Internal Rate of Return, % Benefit-Cost Ratio Payback Period, years Overall Return on Investment, % Financially Feasible? No Yes Yes Yes Yes Yes Table 3: CLB digester sizes, GHG emission reduction, energy generation and financial feasibility indicators for non-cdm benefited farms obtained using the computer-aided method. Parameter Sow Level CLB Digester Volume, m 3 5, , , , , Baseline GHG emission, tonnes CO 2 /yr equiv. 1, , , , , GHG emission reduction,tonnes CO 2 /yr equiv Generator Size, kw Potential Energy Generation, kwh/year 370, , , , , Cost, US $ 317, , , , , Cost, Million PHP Net Present Value, US $ -27, , , , , Net Present Value, Million PHP Internal Rate of Return,% Benefit-Cost Ratio Payback Period, years Overall Return on Investment, % Financially Feasible? No Yes Yes Yes Yes 140

6 Figure 4: Baseline greenhouse gas emission and emission reduction in tonnes CO 2 equivalent/year for both CDM and non-cdm benefited swine farms. Figure 5: Net present value in million PHP by sow level of covered lagoon biodigesters benefited by Clean Development Mechanism. Figure 6: Net present value in million PHP by sow level of covered lagoon biodigesters not benefited by Clean Development Mechanism. 141

7 very high methane combustibility due to the use of enclosure and high temperature which is normally at about C (Environment Canada [EC], 2009, and IEA Bioenergy, 2000). Biogas flaring is strictly required in CDM farms. Net Present Value of CLB by Sow Level Figures 5 and 6 show the net present value (NPV), the major feasibility indicator, for each sow level. For the CLB to be financially feasible, the NVP value must be positive. For CDM farms shown in Figure 5, the NPV is positive if the number of animals used is at least 240 sow level. Hence, the minimum sow level is 240. Sow level dictates the digester volume. At 300 sow level the NPV decreased slightly due to the increase in number of laborers from 1 to 2. The increase in laborers is caused by the corresponding increase in digester volume above 5,000 m 3. One laborer is needed per 5,000 m 3 digester or a fraction thereof. For non-cdm farms shown in Figure 6, the minimum feasible sow level is 330. Conclusion Based on the results of the study, it is concluded that financial feasibility exists in industrial-scale CLB and the minimum feasible digester size for CDM and non-cdm swine farms are 4,258 m 3 and 5,855 m 3, respectively. These sizes are equivalent to 240 and 330 sow levels, respectively. The corresponding emission reductions are 1,059 tonnes and 106 tonnes per year of CO 2 equivalent, respectively. It is further concluded that above the minimum digester size, the bigger the digester the more it is financially feasible and the higher is the emission reduction. Recommendations For optimum use of resources and maximum greenhouse gas emission reduction, it is recommended that the CLB digester size should be the maximum that matches energy demand which can be supported by the manure production of the farm. It is also recommended that software be developed for integrating digester sizing, costing and feasibility analysis in one step. References EC (2009). Biogas flare. Environment Canada. MMP (2010). Instruction Guide of Swine Covered Anaerobic Lagoon Design Tool. Methane to Markets Partnership. Moser, M. (2012). Covered lagoon digesters. /articlefiles 1752-RCM. IEA (2000). Flaring. RCMD (2014). Covered lagoon digesters: Technical detail.rcm digesters. content/uploads/2013/05/rcm-covered- Lagoon-Technical-Details.pdf., A. (1992). Biogas plant design., a. (2013). Users manual of bytex feasibility analyzer, version UNFC (2014). United nations framework convention on climate change.doha amendment to the kyoto protocol. UNFCCC (2008). United nations framework convention on climate change.kyoto protocol reference manual on accounting of emissions and assigned amount. 08unfccckprefmanual.pdf. 142