The technical service life of a biogas plant generally amounts to 10-15 years. It is advisable to
calculate twice, one for a pessimistic assumption (10-year service life) and once for an optimistic
assumption (15-year service life). Similarly, the net profit should also be varied under pessimistic
and optimistic assumptions.
Evaluation: The user can at least expect the biogas plant to yield a positive return on his invested
capital. The actual interest should be in the range of locally achievable savings-account interest.
Also, the results of profitability calculation can be used to compare the financial quality of two
investment alternatives, but only if their respective service lives and investment volumes are
sufficiently comparable.
Calculating the profitability using the appendicized data
Initial investment, Io = 1100
Average capital invested, KA =Io / 2 = 550
Annual returns = 200
Loan servicing costs = none (internal financing)
Depreciation for 10 year service life = 110(case 1)
Depreciation for 15 year service life = 73.3 (case 2)
Net profit, NP1, for case 1 = 90
Net profit, NP2, for case 2 = 126.7
Return on investment in case 1 = NP1 /KA = 16%
Return on investment in case 2 = NP2 /KA = 23%
Thus, this sample calculation can be expected to show positive results regarding the achievable
return on invested capital.
8.4 Use of complex dynamic methods
Dynamic methods of micro-economic analysis are applied to biogas plants primarily by:
- extension officers, for the purpose of checking, by a dynamic technique, their own results of
static monetary analysis (cf. chapter 8.3), as already explained to the small farmers and
other users of biogas plants
- banks, as a decision-making criteria in connection with the granting of loans
- operators of large-scale biogas plants, for whom the financial side of the investment is an
important factor in the decision-making process.
Table 8.4: Schedule of data for
net-present-value calculation
(with case example, data taken
from the appendicized
formsheet, table 10.10; Source:
OEKOTOP)
100