Resilient biogas systems in bioeconomy : a simulation based techno-economic analysis

Abstract

Transition to renewable energy sources is a crucial aspect upon global climate change challenges and biogas businesses play a dual role in renewable energy production and organic waste management. Biogas systems not only offer profits to businesses but also offer planetary and community benefits by being positioned in circular bioeconomy. However, biogas plants face economic uncertainties due to the volatile energy markets and high capital requirements. This study conducts a techno economic analysis (TEA) using MATLAB/Simulink. It evaluates the financial performance across the subsequent 3 phases of a biogas plant: pilot phase with electricity generation (phase 1), technology upscaling and transition to biomethane production (phase 2) and revenue diversification through carbon credits and selling bio polymers (phase 3). The variables are identified under technical and economic parameter categories. The simulations are conducted in this study by integrating with a scenario analysis, category-specific sensitivity analysis, variable-specific sensitivity analysis and a predictive modelling for biomethane price uncertainty analysis. The results revealed that the initial phase of the biogas plant is a loss while the next two phases eventually result in profit and leads the business to a financially viable condition. However, the predicted profitability for 10-year time horizon after the 3rd phase shows that there is a minor chance for the biogas business to make losses. This research serves as a robust decision support tool for investors and policymakers in bio economy by providing investment justifications for renewable energy transition projects, understanding subsidies and incentive requirements of emerging businesses, increasing stakeholder confidence by demonstrating the economic benefits that encourage public and private support.