ADBA DRAFT BIOMETHANE COST MODEL - SUMMARY
The model:
· Has been developed using quotes provided by over 15 ADBA members, covering a range of feedstock types and operational arrangements.
· Focuses on a plant operating on two-thirds food waste and one-third crops. Biomethane developers in practice are following either food waste or agricultural models. However, a mixed feedstock model highlights more of the variables in the sector.
· This draft can be published if necessary. It is an aggregation of other data, so some judgements have had to be made on what cost to use in certain circumstances.
· The figures have been posted on ADBA’s website and reviewed by our membership.
· We can provide the model if required.
· We will update the model and provide that as part of the consultation.
The RHI required results are as follows (based on a 16% project pre-tax IRR):
A 750 m3/ hr plant may produce 55-60 thousand MWh per year, and the RHI appears appropriate up to this level. Biomethane injected by a plant beyond this level requires less support: perhaps £10 per MWh (1 p/ kWh). A large 1,500 m3/ hr plant would therefore be paid £75 on the first 55,000 MWh injected per year, and £10 on the remainder for the year (i.e. the average would be approximately £40-£45/ MWh.
5 | Page
These results are based on the following input assumptions:
Feedstock and gas dataTotal tonnes / 17,500 / 35,000 / 70,000 / 140,000
Percentage crops by weight / 33% / 33% / 33% / 33%
Percentage food waste by weight / 67% / 67% / 67% / 67%
Crops tonnes / 5,775 / 11,550 / 23,100 / 46,200
Food waste tonnes / 11,725 / 23,450 / 46,900 / 93,800
Crops raw biogas yield (m3 per tonne) / 200 / 200 / 200 / 200
Food waste raw biogas yield (m3 per tonne) / 150 / 150 / 150 / 150
Feedstock methane percentage / 55% / 55% / 55% / 55%
m3 biomethane produced per year / 1,602,563 / 3,205,125 / 6,410,250 / 12,820,500
m3 biomethane injected per year (excludes propane) / 1,314,101 / 2,660,254 / 5,384,610 / 10,897,425
MWh injected per year (excludes propane) / 13,276 / 26,877 / 54,401 / 110,097
Plant capacity (accounts for load factor - see Plant assumptions)
m3/ hr biomethane produced / 203 / 407 / 813 / 1,626
m3/ hr biomethane injected (excludes propane) / 167 / 337 / 683 / 1,382
Capital costs
Development costs / £800,000 / £1,000,000 / £1,200,000 / £1,300,000
Civil works / £600,000 / £1,000,000 / £1,600,000 / £1,900,000
Feedstock pre-treatment/ storage / £1,000,000 / £1,800,000 / £2,500,000 / £2,900,000
Digesters (and associated equipment such as M&E) / £2,250,000 / £4,000,000 / £7,500,000 / £11,500,000
CHP capital cost for provision of electricity/ heat to biogas and biomethane production plants / £150,000 / £300,000 / £500,000 / £800,000
Biogas upgrading / £1,300,000 / £1,500,000 / £2,300,000 / £2,900,000
Supplementary food waste biogas upgrading (e.g. VOCs, H2S) / £400,000 / £500,000 / £750,000 / £1,000,000
Propane injection equipment / £140,000 / £150,000 / £160,000 / £170,000
Gas measurement and metering / £310,000 / £310,000 / £310,000 / £310,000
Grid ROV and telemetry / £210,000 / £210,000 / £210,000 / £210,000
Grid connection/ pipework - mid-pint/ average (site dependant) / £200,000 / £250,000 / £300,000 / £350,000
Land costs / £150,000 / £250,000 / £350,000 / £500,000
Digestate storage / £400,000 / £600,000 / £900,000 / £1,200,000
Opex required in year 0 - maintenance, on-site staff, insurance etc. / £50,000 / £75,000 / £100,000 / £150,000
TOTAL CAPEX / £7,960,000 / £11,945,000 / £18,680,000 / £25,190,000
CAPEX per tonne (for reference only) / £679 / £509 / £398 / £269
Annual operating costs
Insurance / £49,104 / £58,668 / £74,832 / £90,456
Propane net cost / £30,801 / £62,354 / £126,210 / £255,424
Crop feedstocks / £202,125 / £404,250 / £808,500 / £1,617,000
Food waste feedstocks / -£117,250 / -£234,500 / -£469,000 / -£938,000
Staff and maintenance / £350,000 / £600,000 / £850,000 / £1,000,000
Supplementary food waste biogas upgrading maintenance / £100,000 / £150,000 / £200,000 / £400,000
Legal and professional fees / £20,000 / £30,000 / £40,000 / £50,000
Digester heat use - assumed from own heat source / £0 / £0 / £0 / £0
Digester electricity use - assumed from own CHP / £0 / £0 / £0 / £0
Biomethane upgrade electricity use - assumed from own CHP / £0 / £0 / £0 / £0
Digestate handling/ disposal cost / £100,000 / £150,000 / £250,000 / £350,000
Contingency / £55,109 / £91,558 / £141,041 / £211,866
Other costs
TOTAL OPEX / £789,889 / £1,312,329 / £2,021,582 / £3,036,746
OPEX + feedstock cost per tonne of material (for reference only) / £45.1 / £37.5 / £28.9 / £21.7
Plant assumptions
Plant lifetime - years / 20 / 20 / 20 / 20
Load factor (percentage of capacity actually injected) / 90% / 90% / 90% / 90%
Opertational hours per year / 7,884 / 7,884 / 7,884 / 7,884
Propane as % of MWh gas injected / 8% / 8% / 8% / 8%
MWh per m3 / 0.0101 / 0.0101 / 0.0101 / 0.0101
Propane cost per MWh / £50 / £50 / £50 / £50
Contingency cost as percent of operational cost / 8% / 8% / 8% / 8%
CH4 percentage - primarily food waste / 55% / 55% / 55% / 55%
Biogas used for plant operation (digester heat and electricity, biomethane upgrading heat/ electricity) / 18.0% / 17.0% / 16.0% / 15.0%
No depackaging requirement assumed (which would add cost)
Digestate disposal costs assumed to include storage/ treatment (e.g. dewatering) plus transport
Debt assumptions
Debt percent of CAPEX / 30% / 30% / 30% / 30%
Interest rate / 11% / 11% / 11% / 11%
Loan term - years / 6 / 6 / 6 / 6
Commercial and tax assumptions
Gas sales price (£/ MWh) / £21 / £21 / £21 / £21
Corporation tax / -21% / -21% / -21% / -21%
Assumed no heat income/ RHI
Feedstock assumptions
Food waste cost per tonne (average over 20 years). Range of between £0 - £25 (declining over time). In practice gate fees will depend on a number of factors such as waste collection infrastructure and alternative waste collection methods and destinations, landfill policy etc. / -£10 / -£10 / -£10 / -£10
Maize / £35 / £35 / £35 / £35
Indexation
Gas price annual increase / 2% / 2% / 2% / 2%
OPEX costs annual increases / 2% / 2% / 2% / 2%
Results
m3/ hr biomethane injected (excludes propane) / 167 / 337 / 683 / 1,382
Project IRR (before tax) / 16% / 16% / 16% / 16%
Equity IRR (following debt repayment and tax) / 14% / 13% / 14% / 13%
RHI required / £140 / £110 / £80 / £48
5 | Page