Bioenergy Farm II project: Economics of biogas production in micro-installations in selected EU countries

The issue of profitability of agricultural biogas production has been a subject of economic analyses in different countries. Recently an increasing interest in the problems of profitability of agricultural biogas production has been observed, however majority of the economic analyzes have focused mainly on comparisons of different technology while the farmer’s point of view has been rather ignored. So far, also comparisons of the profitability of agricultural biogas production at the farm level across countries were also not available. In the Bioenergy Farm II project, the main source of data for the analysis was the "Micro-scale digestion calculation tool" developed for the Bioenergy Farm II project. The tool allows to assess profitability of investments in agricultural biogas plants based on detailed, climatic, region and farm specific technological and economic parameters. Seven EU countries were covered by the study: Belgium, Denmark, France, Germany, Italy, the Netherlands and Poland. In 97.5% of all feasibility studies cogeneration was considered, and only 2.5% of farmers chose the biomethane scenario. Because of the small number of observations for biomethane scenario this paper is focused on CHP scenario only. The payback period less than 20 years was achieved in 64% of cases. The share of financially viable investments varies between the countries, the highest was noted in France (95%) and Belgium (93,7%), followed by Denmark (92.5%). In the Polish sample of farms all business plans indicated the lack of profitability. This demonstrates importance of subsidies for the development of micro-scale farm biogas plants. The average investment costs vary significantly between countries, the average was 8155 EUR/kWe, considering we speak about plant with below 300 kWe installed power. The analysis showed that many projects of agricultural micro-biogas plants are characterized by a very long payback time, what means that they are totally unattractive from the point of view of investors (farmers). Taking into account that the climate and the quality of the natural environment are public goods, the EU countries should provide either simple regulations or subsidies to impact positively the farmers and the environment through implementation of new, micro-scale anaerobic digestion plants.