Very Approximate AD Plant Cost Estimates
- For an on-farm digester, the capital cost is likely to be between £100,000 and £200,000 for a capacity of about 3,000 tons/year. The operating costs should be around £2,000 (without labour).
- For larger plants, treating waste from several farms, capital costs vary from £500,000 for a capacity of 10,000 tons/year to £5,000,000 for a capacity of 200,000 tons/year. Operating costs are likely to be in a range between £31,000 and £530,000. (Pre-sorting/materials recovery/pre-treatment costs – if appropriate are not included.)
- For AD plants, treating the organic fraction of source-segregated MSW, capital costs vary from £3,000,000 for a capacity of 5,000 tons/year to £12,700,000 for a capacity of 100,000 tons/year. Operating costs are ranging from £127,000 to £953,000.
It is possible to calculate cost of an anaerobic digestion plant roughly, from the biogas production and thus the electricity and heat production of an AD plant in relation to the composition of the feedstock (for more detailed information, please see appendix 1 of the above report).
However, please note carefully that such calculations are based on average values and they do not take the process parameters into account (type of digesters, temperature of digestion etc).
For instance, a large centralized AD plant processing 100,000 tpa of cow slurry, which represents approximately 8,000 cows, would be expected to produce very approximately:
• 3,110 MWh/y or 31.1 kWh/tonne of electricity
• 5,710 MWh/y or 57.1 kWh/tonne of heat
Considering a selling price of 4.5p/ kWh (2003 rates), the total income for a year for the electricity would be £140,000. The heat could be used for the process (digester heating, sterilization) and for many other applications and thus may provide additional income streams.
For further information about selling the electricity from an anaerobic digestion plant, see for example the Scottish Renewables internet site [www.scottishrenewables.com] where they have a report devoted to financing renewable energy projects.
The selling price for electricity is not fixed and depends on the price (feed-in tariff) agreement between the producer and the power supply company. The electricity supply company will require a high %age up-time (reliability) for the AD Plant to be willing to pay their highest rate, and the length of the contract to which you are willing to commit is also very important when setting
Cost of Anaerobic Digestion Plant – The Cost of Building and Operating an Anaerobic Digestion Plant
Before deciding to build an AD plant, the cost of anaerobic digestion plant development and operation (CAPEX and TOTEX), must be carefully considered and well understood.
Costs of anaerobic digestion plant include:
- capital costs in building the plant
- operating costs in running and operating the plant
- which must be balanced against the sources of income.
It is thus difficult to provide accurate costs without the specifications of the plant. Moreover each case is specific.
For instance, plants treating MSW need to have expensive pre-treatments and these can differ regarding the degree of segregation you want to achieve or the goal of the project. Don’t forget that you may need to have a sorting process before the digester, for removal of unsuitable constituents within the feedstock or for recycling, such as in a MRF, and to allow the costs of that within your budgets.
AD Plants may be set up with differing primary goals which might include recovery of recyclables, production of combustibles or high quality digestate.
Operating Costs and Sources of Income
Operating costs include costs associated with recruiting and paying the employees who will run the digester, insurance, transportation, annual licenses, pollution abatement and control, and all maintenance.
Sources of income are likely to include revenue from the sale of electricity, heat sales, digestate (liquor and fibre) and gate fees. If you intend to clean the methane and process it for use outside the plant, he methane itself can be a source of income. Heat sales will require the presence of a user for your waste heat, and you will need to set up a CHP project to deliver the otherwise waste heat to a user or many users, such a nearby housing estate or factories where this might for example be used for work-space and living-space heating.
Gate fees are charges made per tonne when the feedstock arrives for processing waste and are especially relevant to CAD plants. It is likely that it would need to be competitive with alternative waste management solutions available locally.
Operators of AD plants should ensure at planning stage that they will have sufficient feedstock material to operate their plant at optimum capacity, in order to maximise the potential sources of revenue. Don’t take this last point lightly.
Setting up a profitable AD business is ALL about having a plentiful supply of the right feedstock and either receiving it free as a waste material, or at the right (low) price. Your AD plant project may be technically brilliant but lose your ability to gain the right feedstock at the right time and price, will make or break your project.
If you are not yourself creating the feedstock as a by-product of another part of your process, the possession of long-term contracts for the reception of waste (i.e. feedstock) will be essential to give you a “bankable” business plan.
The rule of thumb for MSW AD has been in the past that you should seek to break even within the business plan. The sale of energy and other by-products should provide your profit and add a robust contribution to maximising the sources of income which taken together, even in bad times will ensure the continuing viability of the AD operation.