It is difficult to obtain UK anaerobic digestion plant operational costs to assess the Cost of Anaerobic Digestion, 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 for the gate fee cost of anaerobic digestion 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.
This rests currently (February 2015) at only half what it was before the summer of 2014, and many are concerned 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 Gate Fee (Cost of Anaerobic Digestion) 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:
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.