Abstract:
Biogas generated through anaerobic digestion of organic waste, offers unique benefits compared to other renewables, by addressing environmental concerns relating to organic wastes together with creating electricity generation potential. Given the magnitude of benefits for biogas, the utilization of the technology has been increased exponentially worldwide. This study thus aims to identify constraining factors that limit investment in biogas to electricity projects in South Africa, by conducting a financial and economic appraisal of a biogas to electricity project that was proven to be unviable by a large petrochemical company, within the context of the country's renewable energy framework. The study was further benchmarked against a similar biogas to electricity project in Germany. The results indicate that the sale of thermal energy generated via the biogas combined heat and power process largely affects a positive appraisal outcome while the renewable energy policy framework incentivises investors for biogas. Irrespective of the non-viability of the project mainly attributed to high capital costs, the potential for biogas projects exists via the South African renewable energy programme. The financial viability of biogas projects can be improved if the policy frameworks are amended to cater for sale of heat and if independent smaller scale projects are allowed as part of the renewable programme.
