Simulation Model for Biogas Project Efficiency Maximization

Abstract

A simulation method (SM), linear programming method (LPM), project evaluation methods (PEMs), and whole farm modeling (WFM) were applied to analyze the investment appeal of a biogas project on a Russian farm. The biogas project was evaluated for constant input parameters. The project efficiency evaluation procedure was elaborated to evaluate and maximize biogas investment project efficiency. The procedure to evaluate the project efficiency includes defining the optimal state of the farm for the situations “with project” and “without project.” The main elements for optimization are the equipment for anaerobic digestion, substrate blend structure, fertilizing plan, cost plan, and farm production structure. The optimization was fulfilled by simulation modeling (SM) and LPM. The situations “with project” and “without project” were compared by using PEMs, the main indicators of project efficiency: net present value (NPV), internal rate of return (IRR), payback period (PBP), and profitability index (PI). The optimal substrate blend structure was defined by the direct search method (DSM) to select the probe providing the highest NPV afterward. The procedure to maximize biogas project efficiency was applied to justify the benefits of biogas production on the farm under corresponding conditions and to work out the recommendations for businesses and municipalities.