Engineering design and economic evaluation of a family-sized biogas project in Nigeria

doi:10.1016/S0166-4972(99)00105-4

Technovation

Volume 20, Issue 2, February 2000, Pages 103-108

https://doi.org/10.1016/S0166-4972(99)00105-4 Get rights and content

Abstract

To woo householders into harnessing the cooking energy potential of biogas in order to solve the perennial cooking energy problems at household level in Nigeria, this paper carried out the engineering design requirement, and used the discounted cash flow micro-economic assessments to evaluate the 6.0 m³ family-sized biogas project in Nigeria. The project has an initial investment cost of 41,088 Naira, annual expenditure of 5909 Naira and an annual benefit of 13,347 Naira. The NPV, IRR, B/C and payback period of financial analysis are 0.050 million Naira, 17.52%, 2.26 and 6.6 years respectively. This shows that the 6.0 m³ family-sized biogas project using cattle dung as substrate in Nigeria has a good economic potential.

Introduction

Energy plays a key role in the socio-economic growth and development of countries. A shortage of energy is however one of the acute problems facing mankind today (Abraha, 1984). The bulk of energy use for cooking at household level in Nigeria is mainly derived from woodfuel and fossil fuel (kerosine) which are rapidly becoming expensive due to short supply and high consumption. A survey of energy cost carried out in Nigeria showed that the average cost of fuelwood rose from 0.33 Naira/kg in 1991 to 1.67 Naira/kg in 1997; that of coal and charcoal for the same period rose from 1.30 to 5.40 Naira/kg, and 0.91 to 4.55 Naira/kg respectively. That of kerosine for the same period rose from 0.50 to 6.00 Naira/l, with retail prices well over 8.00 Naira/l. That of bottled gas (LPG) for the same period rose from 2.00 to 28.00 Naira/kg, with retail prices slightly higher, while that of electrical energy for single-phase residential buildings from 0.06 to 1.30 Naira/Unit. The direct implication of these increased costs has been cooking energy crises (switching, substitution, etc) at household level in Nigeria. As at 1996, the Nigerian average household income stood at about 5383 Naira (Federal Office of Statistics, 1997), but with increasing household expenditure on cooking energy. It is the view of this research that for at least the next decade the continual development of the Nigeria economy will rest on, among other foundations, a growing use of energy, and consequently if supply cannot meet or exceed demand, a growing energy price results according to the law of demand and supply. But providing adequate cooking energy is vital to economic development. Investments and expansion of the conventional energy system and woodforest areas are neither possible nor desirable due to the finite nature of fossil fuels and woodfuel as well as the serious environmental and ecological consequences of their exploitation. These imply that development and utilization of renewable energy such as biogas for cooking in households is a unique idea.

Biogas derived from animal waste and other biomass offers a convenient and replenishable source of energy needed by the householders. However, developing and utilizing this desirable, modern, ecology-oriented form of appropriate technology remain unpopular in Nigeria, partly because of lack of information on its economic viability. Therefore, to stimulate householder's interest in the development and utilization of biogas technology, the research work had set out to investigate the aforementioned evaluation, and the results could serve as a guide for householders who may wish to invest in biogas technology here in Nigeria.

Section snippets

Engineering design of family-sized biogas project

Questionnaire and interview techniques were used to elicit information from Nigerian households on their present household cooking energy requirement, and the number of persons per household per day including visitors. These two necessary input parameters were used in designing the size of the fixed-dome digester (a digester type that had been found to be technically suitable for use in Nigeria) and gasholder. In total, 1145 Nigerian households were sampled using a stratified two-stage random

Economic evaluation methodology

The discounted cash flow micro-economic analysis was used to assess the 6.0 m³ family-sized biogas project in Nigeria. The financial analysis is designed to financially analyse and calculate the benefit and cost of the project, and inspect their ability to make profit from the perspective of the householders in order to assess its financial feasibility. The main evaluation criteria used in this paper are as follows:

Net Present Value (NPV): this is defined as the present value of the benefit

Conclusions

This paper shows that the 6.0 m³ family-sized biogas project has apparent micro-economic benefits in Nigeria and is a project with great potential for making a profit on the capital invested, and supporting its own development.

With the advent of subsidy removal on bottled gas (LPG) and mineral fertilizer, the micro-economic profitability index of the project is expected to increase, making investment in the technology more worthwhile to householders (investors).

The application of the project in

O. Adeoti obtained the degrees of B. Eng. in Agricultural Engineering from the Federal University of Technology, Akure, Ondo State, Nigeria and M.Sc. in Technology Management from the Obafemi Awolowo University, Ile-Ife, Nigeria in 1991 and 1998 respectively. An academic staff in the Agricultural Engineering Department, Federal Polytechnic, Ado-Ekiti, Ekiti State, Nigeria. His research interest is in Energy Planning and Management.

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M.O. Ilori

T.O. Oyebisi, a Senior Research Fellow in the Technology Planning and Development Unit of Obafemi Awolowo University, Ile-Ife, Nigeria received his M.Sc and Ph.D in Electronics and Electrical Engineering in 1983 and 1991 respectively. He obtained an MBA of Obafemi Awolowo University in 1995. His current research interest is in Industrial and Information Technology Management.

L.O. Adekoya, a Reader in the Mechanical Engineering Department of the Obafemi Awolowo University, Ile-Ife, Nigeria. Obtained the degrees of B.Sc in Agricultural Engineering in 1975 from the University of Ife (now Obafemi Awolowo University), Ile-Ife, Nigeria. M.Sc in Engineering from University of California, Davis, California, USA and Ph.D. in Agricultural/Mechanical Engineering from Iowa State University of Science and Technology, Ames, Iowa, USA in 1979 and 1982 respectively. Immediate past Head of Department and Vice-Dean, Faculty of Technology. His major research interest is in Engineering Design.

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