Sustainability of large-scale commercial biogas plants in Nepal

Interest in large-scale compressed biogas (CBG) and biogas for electricity generation is increasing due to these technologies’ potential for addressing dual energy and waste management challenges. However, sustainable operation of large-scale commercial biogas plants requires attention to numerous factors, including technical aspects (feedstock types, plant size, operational parameters, and biogas and fertilizer utilization strategies), costs (capital investment and operational), and affordability, as affected also by subsidies. This study conducts a case study of the sustainability of an existing operational large-scale biogas plant in Nepal, considering its operational condition, financial status, and environmental benefits under designed capacity and actual operating conditions. Design parameters related to biogas and digestate production, financial viability, and greenhouse gas (GHG) emission reduction potential were compared with the realized outcomes of the plant. Operational and financial data for the plant were obtained through visits to the plant supplemented by interviews of the plant manager. The analysis reveals that both the feedstock and digester efficiencies are much lower than the design expectations, by 55% and 62%, respectively. This has led to reductions in the production of biogas and biofertilizers by 72% and 90%, respectively. Moreover, while the internal rate of return (IRR) of the plant at design capacity was 23%, it is indeterminate for the actual operating condition, as the net present value is negative for all discount rates. The biogas plant does generate environmental benefits; the GHG emissions avoided are estimated to be around 274 tons of CO2 equivalent per year under the actual operating conditions. Given these results, it is clear that improving the operational performance of large-scale biogas plants in contexts such as this one should be a priority. Moreover, the findings can help policymakers, investors, and other stakeholders make better plans for future development of biogas facilities, insisting on more realistic and careful assessments of technical and financial viability.

Duke Scholars

Author Marc A. Jeuland Sanford School of Public Policy