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Cost of Anaerobic Digestion in the UK: WRAP Annual Gate Fees Report Published

<span class=biogas" />It is difficult to obtain UK anaerobic digestion plant operational costs from any source, so the annual WRAP gate fees report, now published, is eagerly awaited each year by many people in the UK Biogas Industry.

This year the wait was even more acute, because those that have invested in biogas plants, or work in the AD sector, are also nervous about the current low oil price, currently (February 2015) at only half what it was before the summer of 2014, and how that might reduce the profitability of AD facilities.

(Image: By Nico (talk) 13:22, 13 September 2008 (UTC)/ Nils Jepsen (Own work (own photo)) [CC BY-SA 3.0], via Wikimedia Commons)

Unfortunately, the report: “Gate Fees: Comparing the Costs of Alternative Waste Treatment Options” (visit www.wrap.org.uk/gatefees to view it) is based upon data for 2013/14, so there is no possibility that any effects of the reduction in oil prices, will show up in this data. However, that does not mean that the report is not worth studying, and we believe that there is plenty of good news within it.

Most UK anaerobic digestion facilities are, in the main, driven by their waste management function, and in principle the electricity tariffs are set for many years in advance given that they are set on the basis of government incentives, and not the oil price. There may be a slow-down in interest in new AD plant projects while the oil price remains so low, but existing biogas plant operators should not be suffering economically. In fact gate fees have been rising, with many more local authorities now involved in disposing of wastes in anaerobic digestion plants than in the previous year.

So, in view of our title, what can be concluded about overall Anaerobic Digestion costs over the period 2013/14? Only very general statements can be made, but in so far as wages and electricity tariffs have remained largely static AD costs will not have changed significantly, and if anything based upon this assumption this report suggests a rise in biogas profitability industry wide, as the following extract suggests:

MRF gate fees rise while in the organic sector AD’s influence continues to grow

Content

MRF gate fees rise while in the organic sector AD’s influence continues to grow – WRAP publishes its annual Gate Fees Report

Gate fees charged at Material Recovery Facilities have increased slightly on the previous twelve months, while the number of local authorities surveyed who reported the use of anaerobic digestion (AD) facilities has almost doubled, reports WRAP.

The overall UK median MRF gate fee paid by local authorities rose marginally to £10 per tonne this year, according to WRAP. Gate fees also rose for the small sample (14) of MRF contracts signed in 2013 and 2014, with a median gate fee of £0 per tonne compared to the median figure of minus £10 (-£10*) reported for the 11 new contacts struck in 2011 and 2012…

…Elsewhere, the report shows that the median gate fee paid for treating food waste at AD facilities remains steady at £40 per tonne, but varies due to a number of factors with a range from £19 to £63. WRAP notes, based upon survey responses that the uptake of AD technology by local authorities has increased over the last twelve months: almost twice the number of local authorities reported using AD facilities in the current survey than in the previous survey.

…Other changes noted include a greater number of local authorities reporting gate fee data for Mechanical Biological Treatment (MBT) or Mechanical Heat Treatment (MHT), which may indicate greater uptake of MBT/MHT technologies or for more facilities coming on-stream.  Currently, the median MBT/MHT gate fee at is £84 per tonne, up from £76 per tonne in the previous survey…

WRAP’s gate fees report aims to increase transparency and improve efficiency in the waste management market. It is used by local authorities and the waste industry alike to better understand the complex market and focusses on the median and range of prices charged at facilities across the UK.

  • * A negative gate fee is where a MRF is paying revenue to a local authority for the recovered materials sent to the MRF for sorting.


http://www.wrap.org.uk/node/24103

Of course, the AD market is very complex and plants vary enormously in the technology used and in their cost structures, so there will be some biogas plant businesses which will have benefited more than others, and a few will have lost out.

To find out more about “MRF gate fees rise while in the organic sector AD’s influence continues to grow” and anaerobic digestion, click here | Share with your friends!

 

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