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Economic performance evaluation of bio-waste treatment technology at the facility level

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  • De Clercq, Djavan
  • Wen, Zongguo
  • Fei, Fan

Abstract

The objective of this paper is to investigate the economic performance of a major Chinese biowaste treatment pilot project in Hainan province. Our methodology involved comprehensive on-site survey to collect economic performance data. Performance modelling tools used included net present value (NPV) analysis, internal rate of return, sensitivity analysis and uncertainty analysis based on Monte Carlo methods The results show that (1) weak economic performance in one of China’s most eminent biowaste projects: NPV was found to be negative at RMB – 115,311,390; and (2) sensitivity analysis showed that natural gas prices would need to be subsidized by 2.19 RMB/Nm3 for the project to break-even; (3) Monte Carlo analysis showed that the project had a probability of 86% to lose money. The policy implications for China are important: (1) capital and operating costs should be minimized in subsequent pilot project iterations; (2) subsidies towards the sale price of biomethane should be increased; and (3) the outputs produced by biowaste treatment plants should be further diversified. These policy implications are especially pertinent given that the surveyed case study is one of the newest and most advanced projects of its kind in China, and may serve as a model for the further development of biogas plants across China. For that reason, it is imperative that the identified economic issues are resolved quickly.

Suggested Citation

  • De Clercq, Djavan & Wen, Zongguo & Fei, Fan, 2017. "Economic performance evaluation of bio-waste treatment technology at the facility level," Resources, Conservation & Recycling, Elsevier, vol. 116(C), pages 178-184.
    • Handle: RePEc:eee:recore:v:116:y:2017:i:c:p:178-184
    DOI: 10.1016/j.resconrec.2016.09.031
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    References listed on IDEAS

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    1. De Clercq, Djavan & Wen, Zongguo & Fan, Fei & Caicedo, Luis, 2016. "Biomethane production potential from restaurant food waste in megacities and project level-bottlenecks: A case study in Beijing," Renewable and Sustainable Energy Reviews, Elsevier, vol. 59(C), pages 1676-1685.
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