Wasted Biogas : Economic analysis of biogas recovery adjoined to existing incineration facility in Sweden

University essay from KTH/Skolan för industriell teknik och management (ITM); KTH/Skolan för industriell teknik och management (ITM)

Abstract: Biogas is of growing interest in Sweden, and a public inquiry suggested the government to set a goal of producing 10 TWh biogas in 2030 although only 2 TWh biogas was produced in Sweden in 2018 (Regeringskansliet, 2019) (Klackenberg, 2019). To achieve this optimistic goal and to meet the increased demand of biogas, new biogas production facilities needs to be built. The purpose of this report is to investigate the economic feasibility for the development of a biogas recovery process adjoined to an incineration facility in Sweden. The report first gives an overview of the largest incineration facilities in Sweden. The largest quantity of food waste was estimated in Gothenburg to be 56´744 WRQ SeU \eaU. For the economic feasibility, a conceptual facility was constructed with 169´000 ton residual waste per year of which 45´000 ton was food waste. A biogas process model was built in Excel where the biogas potential was calculated using characteristics for food waste. The annual production of liquid biogas was estimated to 43´970 MWK. The economic evaluation was based on the conceptual facility. In the baseline scenario the incomes for the process was the value of liquid biogas, 25,6 MSEK per year, a Gate-fee synergy of 5 MSEK per year and a Tax deduction synergy of 1 MSEK per year. The investment cost was estimated to 211,6 MSEK and the Operation & Maintenance cost was estimated to 6,3 MSEK per year. This resulted in an NPV of 69,5 MSEK and an IRR of 10,3% for the project, indicating a profitable investment. Three different scenarios were considered, apart from the baseline scenario, where the first excluded all synergies with the incineration facility, which generated an NPV of 2,3 MSEK. The second scenario only considered the minimal gate-fee synergy which gave an NPV of 37,8 MSEK. Finally, the third scenario where all synergies were included, and an additional investment grant was introduced gave the project an NPV of 111,8 MSEK. A sensitivity analysis was also conducted which showed that the input of food waste treated, weighted average cost of capital and potential grants had the biggest impact on the financial results. None of the results from the sensitivity analysis showed a negative NPV.

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