IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v14y2021i21p7375-d673002.html
   My bibliography  Save this article

Investment Model of Agricultural Biogas Plants for Individual Farms in Poland

Author

Listed:
  • Kamila Klimek

    (Department of Applied Mathematics and Computer Science, University of Life Sciences in Lublin, 20-033 Lublin, Poland)

  • Magdalena Kapłan

    (Department of Pomology, Nursery and Enology, University of Life Sciences in Lublin, 20-033 Lublin, Poland)

  • Serhiy Syrotyuk

    (Department of Energy, Lviv National Agrarian University, 1 V. Velykoho Street, 80381 Lviv-Dubliany, Ukraine)

  • Nikolay Bakach

    (Deputy Director General for Scientific Work, Republican Unitary Enterprise “Scientific and Practical Center of the National Academy of Sciences of Belarus for Agricultural Mechanization”, Knorina 1 Street, 220049 Minsk, Belarus)

  • Nikolay Kapustin

    (Laboratory of Using Fuel and Energy Resources, Republican Unitary Enterprise “Scientific and Practical Center of the National Academy of Sciences of Belarus for Agricultural Mechanization”, Knorina 1 Street, 220049 Minsk, Belarus)

  • Ryszard Konieczny

    (Department of Technology, Institute of Energy and Technical Safety, Jacob of Paradyz University, 52 Chopina Street, 66-400 Gorzow Wielkopolski, Poland)

  • Jakub Dobrzyński

    (Institute of Technology and Life Sciences—National Research Institute, Falenty, 3 Hrabska Avenue, 05-090 Pruszków, Poland
    Department of Grassland Farming, 3 Hrabska Avenue, 05-090 Pruszków, Poland)

  • Kinga Borek

    (Institute of Technology and Life Sciences—National Research Institute, Falenty, 3 Hrabska Avenue, 05-090 Pruszków, Poland
    Department of Rural Technical Infrastructure Systems, 3 Hrabska Avenue, 05-090 Pruszków, Poland)

  • Dorota Anders

    (Institute of Technology and Life Sciences—National Research Institute, Falenty, 3 Hrabska Avenue, 05-090 Pruszków, Poland
    Department of Renewable Energy, 67 Biskupinska Street, 60-463 Poznan, Poland)

  • Barbara Dybek

    (Institute of Technology and Life Sciences—National Research Institute, Falenty, 3 Hrabska Avenue, 05-090 Pruszków, Poland
    Department of Renewable Energy, 67 Biskupinska Street, 60-463 Poznan, Poland)

  • Agnieszka Karwacka

    (Institute of Technology and Life Sciences—National Research Institute, Falenty, 3 Hrabska Avenue, 05-090 Pruszków, Poland
    Department of Renewable Energy, 67 Biskupinska Street, 60-463 Poznan, Poland)

  • Grzegorz Wałowski

    (Institute of Technology and Life Sciences—National Research Institute, Falenty, 3 Hrabska Avenue, 05-090 Pruszków, Poland
    Department of Renewable Energy, 67 Biskupinska Street, 60-463 Poznan, Poland)

Abstract

The main idea of a circular economy (CE) is to separate economic growth from resource consumption and environmental impacts. The characteristic approach of a CE assumes the minimisation of the amount of waste generated at the design level and, as a standard, includes innovations throughout the value chain. From an agricultural point of view, agricultural biogas plants are particularly important because they enable the management of all waste biomass and its conversion into useful energy and agricultural fertiliser. This paper presents methods for assessing the economic effectiveness of an investment in an agricultural biogas plant. The research goal was to develop a financial model. The authors of this study used available examples of the profitability of commercial ventures. We considered the investment aspects of agricultural biogas plants. Exemplary solutions are discussed, allowing the reader to become acquainted with various methods and proposals for thus far estimated investments. It may seem chaotic, but this is how the biogas market is characterised in the context of the implementation of biogas projects. Guidance is given regarding how to understand investing in this sensitive private farming sector. It is admirable that the renewable energy market has been systematised, and we hypothesise that it is necessary to develop an investment model in Polish conditions.

Suggested Citation

  • Kamila Klimek & Magdalena Kapłan & Serhiy Syrotyuk & Nikolay Bakach & Nikolay Kapustin & Ryszard Konieczny & Jakub Dobrzyński & Kinga Borek & Dorota Anders & Barbara Dybek & Agnieszka Karwacka & Grzeg, 2021. "Investment Model of Agricultural Biogas Plants for Individual Farms in Poland," Energies, MDPI, vol. 14(21), pages 1-30, November.
    • Handle: RePEc:gam:jeners:v:14:y:2021:i:21:p:7375-:d:673002
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/14/21/7375/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/14/21/7375/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Scarlat, Nicolae & Dallemand, Jean-François & Monforti-Ferrario, Fabio & Banja, Manjola & Motola, Vincenzo, 2015. "Renewable energy policy framework and bioenergy contribution in the European Union – An overview from National Renewable Energy Action Plans and Progress Reports," Renewable and Sustainable Energy Reviews, Elsevier, vol. 51(C), pages 969-985.
    2. Kozlova, Mariia, 2017. "Real option valuation in renewable energy literature: Research focus, trends and design," Renewable and Sustainable Energy Reviews, Elsevier, vol. 80(C), pages 180-196.
    3. Jyrki Savolainen & Mikael Collan & Pasi Luukka, 2017. "Analyzing operational real options in metal mining investments with a system dynamic model," The Engineering Economist, Taylor & Francis Journals, vol. 62(1), pages 54-72, January.
    4. Malinauskaite, J. & Jouhara, H. & Czajczyńska, D. & Stanchev, P. & Katsou, E. & Rostkowski, P. & Thorne, R.J. & Colón, J. & Ponsá, S. & Al-Mansour, F. & Anguilano, L. & Krzyżyńska, R. & López, I.C. & , 2017. "Municipal solid waste management and waste-to-energy in the context of a circular economy and energy recycling in Europe," Energy, Elsevier, vol. 141(C), pages 2013-2044.
    5. Jan Martin Zepter & Jan Engelhardt & Tatiana Gabderakhmanova & Mattia Marinelli, 2021. "Empirical Validation of a Biogas Plant Simulation Model and Analysis of Biogas Upgrading Potentials," Energies, MDPI, vol. 14(9), pages 1-19, April.
    6. Martínez Ceseña, E.A. & Mutale, J. & Rivas-Dávalos, F., 2013. "Real options theory applied to electricity generation projects: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 19(C), pages 573-581.
    7. Martínez-Ceseña, E.A. & Mutale, J., 2011. "Application of an advanced real options approach for renewable energy generation projects planning," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(4), pages 2087-2094, May.
    8. Fernandes, Bartolomeu & Cunha, Jorge & Ferreira, Paula, 2011. "The use of real options approach in energy sector investments," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4491-4497.
    9. Saeed Nosratabadi & Amir Mosavi & Shahaboddin Shamshirband & Edmundas Kazimieras Zavadskas & Andry Rakotonirainy & Kwok Wing Chau, 2019. "Sustainable Business Models: A Review," Sustainability, MDPI, vol. 11(6), pages 1-30, March.
    10. Alberto Benato & Alarico Macor, 2019. "Italian Biogas Plants: Trend, Subsidies, Cost, Biogas Composition and Engine Emissions," Energies, MDPI, vol. 12(6), pages 1-31, March.
    11. Massimiliano Borrello & Francesco Caracciolo & Alessia Lombardi & Stefano Pascucci & Luigi Cembalo, 2017. "Consumers’ Perspective on Circular Economy Strategy for Reducing Food Waste," Sustainability, MDPI, vol. 9(1), pages 1-18, January.
    12. Pavol Durana & Lucia Michalkova & Andrej Privara & Josef Marousek & Milos Tumpach, 2021. "Does the life cycle affect earnings management and bankruptcy?," Oeconomia Copernicana, Institute of Economic Research, vol. 12(2), pages 425-461, June.
    13. Gianluca Caposciutti & Andrea Baccioli & Lorenzo Ferrari & Umberto Desideri, 2020. "Biogas from Anaerobic Digestion: Power Generation or Biomethane Production?," Energies, MDPI, vol. 13(3), pages 1-15, February.
    14. Boomsma, Trine Krogh & Linnerud, Kristin, 2015. "Market and policy risk under different renewable electricity support schemes," Energy, Elsevier, vol. 89(C), pages 435-448.
    15. M. López & Arminda Garcia & Lazaro Rodriguez, 2007. "Sustainable Development and Corporate Performance: A Study Based on the Dow Jones Sustainability Index," Journal of Business Ethics, Springer, vol. 75(3), pages 285-300, October.
    16. Alexandre Tisserant & Stefan Pauliuk & Stefano Merciai & Jannick Schmidt & Jacob Fry & Richard Wood & Arnold Tukker, 2017. "Solid Waste and the Circular Economy: A Global Analysis of Waste Treatment and Waste Footprints," Journal of Industrial Ecology, Yale University, vol. 21(3), pages 628-640, June.
    17. Kumbaroglu, Gürkan & Madlener, Reinhard & Demirel, Mustafa, 2008. "A real options evaluation model for the diffusion prospects of new renewable power generation technologies," Energy Economics, Elsevier, vol. 30(4), pages 1882-1908, July.
    18. Scarlat, Nicolae & Dallemand, Jean-François & Fahl, Fernando, 2018. "Biogas: Developments and perspectives in Europe," Renewable Energy, Elsevier, vol. 129(PA), pages 457-472.
    19. Shah, Fayyaz Ali & Mahmood, Qaisar & Rashid, Naim & Pervez, Arshid & Raja, Iftikhar Ahmad & Shah, Mohammad Maroof, 2015. "Co-digestion, pretreatment and digester design for enhanced methanogenesis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 627-642.
    20. Bastian-Pinto, Carlos & Brando, Luiz & Hahn, Warren J., 2009. "Flexibility as a source of value in the production of alternative fuels: The ethanol case," Energy Economics, Elsevier, vol. 31(3), pages 411-422, May.
    21. Dotzauer, Martin & Pfeiffer, Diana & Lauer, Markus & Pohl, Marcel & Mauky, Eric & Bär, Katharina & Sonnleitner, Matthias & Zörner, Wilfried & Hudde, Jessica & Schwarz, Björn & Faßauer, Burkhardt & Dah, 2019. "How to measure flexibility – Performance indicators for demand driven power generation from biogas plants," Renewable Energy, Elsevier, vol. 134(C), pages 135-146.
    22. Igliński, Bartłomiej & Buczkowski, Roman & Iglińska, Anna & Cichosz, Marcin & Piechota, Grzegorz & Kujawski, Wojciech, 2012. "Agricultural biogas plants in Poland: Investment process, economical and environmental aspects, biogas potential," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(7), pages 4890-4900.
    23. Pöschl, Martina & Ward, Shane & Owende, Philip, 2010. "Evaluation of energy efficiency of various biogas production and utilization pathways," Applied Energy, Elsevier, vol. 87(11), pages 3305-3321, November.
    24. Tappen, S.J. & Aschmann, V. & Effenberger, M., 2017. "Lifetime development and load response of the electrical efficiency of biogas-driven cogeneration units," Renewable Energy, Elsevier, vol. 114(PB), pages 857-865.
    25. Anna Rolewicz-Kalińska & Krystyna Lelicińska-Serafin & Piotr Manczarski, 2020. "The Circular Economy and Organic Fraction of Municipal Solid Waste Recycling Strategies," Energies, MDPI, vol. 13(17), pages 1-20, August.
    26. Andrea Baccioli & Lorenzo Ferrari & Romain Guiller & Oumayma Yousfi & Francesco Vizza & Umberto Desideri, 2019. "Feasibility Analysis of Bio-Methane Production in a Biogas Plant: A Case Study," Energies, MDPI, vol. 12(3), pages 1-16, February.
    27. Susanne Theuerl & Christiane Herrmann & Monika Heiermann & Philipp Grundmann & Niels Landwehr & Ulrich Kreidenweis & Annette Prochnow, 2019. "The Future Agricultural Biogas Plant in Germany: A Vision," Energies, MDPI, vol. 12(3), pages 1-32, January.
    28. Gabriel Cucui & Constantin Aurelian Ionescu & Ioana Raluca Goldbach & Mihaela Denisa Coman & Elena Liliana Moiceanu Marin, 2018. "Quantifying the Economic Effects of Biogas Installations for Organic Waste from Agro-Industrial Sector," Sustainability, MDPI, vol. 10(7), pages 1-16, July.
    29. Baccioli, A. & Antonelli, M. & Frigo, S. & Desideri, U. & Pasini, G., 2018. "Small scale bio-LNG plant: Comparison of different biogas upgrading techniques," Applied Energy, Elsevier, vol. 217(C), pages 328-335.
    30. Menegaki, Angeliki, 2008. "Valuation for renewable energy: A comparative review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 12(9), pages 2422-2437, December.
    31. Korberg, Andrei David & Skov, Iva Ridjan & Mathiesen, Brian Vad, 2020. "The role of biogas and biogas-derived fuels in a 100% renewable energy system in Denmark," Energy, Elsevier, vol. 199(C).
    32. Alberto Benato & Alarico Macor, 2017. "Biogas Engine Waste Heat Recovery Using Organic Rankine Cycle," Energies, MDPI, vol. 10(3), pages 1-18, March.
    33. Francis Kemausuor & Muyiwa S. Adaramola & John Morken, 2018. "A Review of Commercial Biogas Systems and Lessons for Africa," Energies, MDPI, vol. 11(11), pages 1-21, November.
    34. Santos, Lúcia & Soares, Isabel & Mendes, Carla & Ferreira, Paula, 2014. "Real Options versus Traditional Methods to assess Renewable Energy Projects," Renewable Energy, Elsevier, vol. 68(C), pages 588-594.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alan, Hale & Köker, Ali Rıza, 2023. "Analyzing and mapping agricultural waste recycling research: An integrative review for conceptual framework and future directions," Resources Policy, Elsevier, vol. 85(PB).
    2. Maciej Kuboń & Zbigniew Skibko & Sylwester Tabor & Urszula Malaga-Toboła & Andrzej Borusiewicz & Wacław Romaniuk & Janusz Zarajczyk & Pavel Neuberger, 2023. "Analysis of Voltage Distortions in the Power Grid Arising from Agricultural Biogas Plant Operation," Energies, MDPI, vol. 16(17), pages 1-21, August.
    3. Dariusz Kusz & Iwona Bąk & Beata Szczecińska & Ludwik Wicki & Bożena Kusz, 2022. "Determinants of Return-on-Equity (ROE) of Biogas Plants Operating in Poland," Energies, MDPI, vol. 16(1), pages 1-22, December.
    4. Marek Cierpiał-Wolan & Jolanta Stec-Rusiecka & Dariusz Twaróg & Katarzyna Bilińska & Anna Dewalska-Opitek & Bogdan Wierzbiński, 2022. "Relationship between Renewable Biogas Energy Sources and Financial Health of Food Business Operators," Energies, MDPI, vol. 15(16), pages 1-13, August.
    5. Padi, Richard Kingsley & Douglas, Sean & Murphy, Fionnuala, 2023. "Techno-economic potentials of integrating decentralised biomethane production systems into existing natural gas grids," Energy, Elsevier, vol. 283(C).
    6. Jakub Mazurkiewicz, 2023. "The Impact of Manure Use for Energy Purposes on the Economic Balance of a Dairy Farm," Energies, MDPI, vol. 16(18), pages 1-22, September.
    7. Aleksandra Lubańska & Jan K. Kazak, 2023. "The Role of Biogas Production in Circular Economy Approach from the Perspective of Locality," Energies, MDPI, vol. 16(9), pages 1-15, April.
    8. Adam Smoliński & Andrzej Bąk, 2022. "Clean Coal Technologies as an Effective Way in Global Carbon Dioxide Mitigation," Energies, MDPI, vol. 15(16), pages 1-4, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kozlova, Mariia, 2017. "Real option valuation in renewable energy literature: Research focus, trends and design," Renewable and Sustainable Energy Reviews, Elsevier, vol. 80(C), pages 180-196.
    2. Martín-Barrera, Gonzalo & Zamora-Ramírez, Constancio & González-González, José M., 2016. "Application of real options valuation for analysing the impact of public R&D financing on renewable energy projects: A company′s perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 63(C), pages 292-301.
    3. Anna Rolewicz-Kalińska & Krystyna Lelicińska-Serafin & Piotr Manczarski, 2020. "The Circular Economy and Organic Fraction of Municipal Solid Waste Recycling Strategies," Energies, MDPI, vol. 13(17), pages 1-20, August.
    4. Loncar, Dragan & Milovanovic, Ivan & Rakic, Biljana & Radjenovic, Tamara, 2017. "Compound real options valuation of renewable energy projects: The case of a wind farm in Serbia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 75(C), pages 354-367.
    5. Gazheli, Ardjan & van den Bergh, Jeroen, 2018. "Real options analysis of investment in solar vs. wind energy: Diversification strategies under uncertain prices and costs," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 2693-2704.
    6. Maeda, Mansaku & Watts, David, 2019. "The unnoticed impact of long-term cost information on wind farms’ economic value in the USA. – A real option analysis," Applied Energy, Elsevier, vol. 241(C), pages 540-547.
    7. Schachter, J.A. & Mancarella, P., 2016. "A critical review of Real Options thinking for valuing investment flexibility in Smart Grids and low carbon energy systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 56(C), pages 261-271.
    8. Sisodia, Gyanendra Singh & Soares, Isabel & Ferreira, Paula, 2016. "Modeling business risk: The effect of regulatory revision on renewable energy investment - The Iberian case," Renewable Energy, Elsevier, vol. 95(C), pages 303-313.
    9. Kyung-Taek Kim & Deok-Joo Lee & Donghyun An, 2020. "Real Option Valuation of the R&D Investment in Renewable Energy Considering the Effects of the Carbon Emission Trading Market: A Korean Case," Energies, MDPI, vol. 13(3), pages 1-17, February.
    10. Romano, Teresa & Fumagalli, Elena, 2018. "Greening the power generation sector: Understanding the role of uncertainty," Renewable and Sustainable Energy Reviews, Elsevier, vol. 91(C), pages 272-286.
    11. Assereto, Martina & Byrne, Julie, 2021. "No real option for solar in Ireland: A real option valuation of utility scale solar investment in Ireland," Renewable and Sustainable Energy Reviews, Elsevier, vol. 143(C).
    12. Gianluca Caposciutti & Andrea Baccioli & Lorenzo Ferrari & Umberto Desideri, 2020. "Biogas from Anaerobic Digestion: Power Generation or Biomethane Production?," Energies, MDPI, vol. 13(3), pages 1-15, February.
    13. Jan Martin Zepter & Jan Engelhardt & Tatiana Gabderakhmanova & Mattia Marinelli, 2021. "Empirical Validation of a Biogas Plant Simulation Model and Analysis of Biogas Upgrading Potentials," Energies, MDPI, vol. 14(9), pages 1-19, April.
    14. Giovanni Ferrari & Andrea Pezzuolo & Abdul-Sattar Nizami & Francesco Marinello, 2020. "Bibliometric Analysis of Trends in Biomass for Bioenergy Research," Energies, MDPI, vol. 13(14), pages 1-21, July.
    15. Pringles, Rolando & Olsina, Fernando & Penizzotto, Franco, 2020. "Valuation of defer and relocation options in photovoltaic generation investments by a stochastic simulation-based method," Renewable Energy, Elsevier, vol. 151(C), pages 846-864.
    16. Acquah-Andoh, Elijah & Putra, Herdi A. & Ifelebuegu, Augustine O. & Owusu, Andrews, 2019. "Coalbed methane development in Indonesia: Design and economic analysis of upstream petroleum fiscal policy," Energy Policy, Elsevier, vol. 131(C), pages 155-167.
    17. Moon, Yongma & Baran, Mesut, 2018. "Economic analysis of a residential PV system from the timing perspective: A real option model," Renewable Energy, Elsevier, vol. 125(C), pages 783-795.
    18. Mariia Kozlova & Alena Lohrmann, 2021. "Steering Renewable Energy Investments in Favor of Energy System Reliability: A Call for a Hybrid Model," Sustainability, MDPI, vol. 13(24), pages 1-18, December.
    19. Alberto Benato & Chiara D’Alpaos & Alarico Macor, 2022. "Possible Ways of Extending the Biogas Plants Lifespan after the Feed-In Tariff Expiration," Energies, MDPI, vol. 15(21), pages 1-23, October.
    20. Sim, Jaehun & Kim, Chae-Soo, 2019. "The value of renewable energy research and development investments with default consideration," Renewable Energy, Elsevier, vol. 143(C), pages 530-539.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:14:y:2021:i:21:p:7375-:d:673002. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.