The Economic Efficiency of Micro Biogas Plants: A Sustainable Energy Solution in Slovenia—Case Study

Abstract

This paper presents a simulation model for determining the most suitable type of microbiogas plant for small local communities on Slovenian farms, focusing on the efficient processing of organic waste. This model uses various input parameters, including different types and quantities of slurry and corn silage. Four different scenarios were developed to represent potential plant sizes, each evaluated using key economic indicators: net present value, breakthrough price, and internal rate of return. A scenario sensitivity analysis was conducted to assess the effects of changes in investment costs, fluctuations in energy prices, and the addition of corn silage to the anaerobic digestion process. The results highlight significant differences in economic viability across the scenarios, with some demonstrating positive financial outcomes and shorter payback periods and others indicating potential financial risks and longer recovery times under certain conditions. The analysis suggests that smaller micro biogas plants may struggle to achieve profitability without optimizing input ratios or reducing costs, whereas larger plants show more favorable economic indicators, provided certain conditions are met. Furthermore, the economic efficiency improves when adding maize silage to the fermentor mixture.

1. Introduction

Climate change is now considered a major threat to the future of humanity by leading scientists. The world is currently facing two major threats related to energy use: the rapid depletion of fossil fuels and environmental disruptions at both global and local levels. To address these growing challenges, renewable energy and energy-efficient technologies are key solutions. One example of an efficient renewable energy application is the utilization of biomass through a cogeneration system (CGS) [1,2,3,4]. Globally, the ten hottest years on record have all occurred since 2004, with the five hottest years falling within the 2015–2020 period [5].

Methane stands out as a significant greenhouse gas, with livestock farming potentially contributing 18% to overall global emissions. Although methane accounts for less than 2% of all contributors to global warming, its impact is significant, being 21 times more potent than carbon dioxide [6]. The production of biogas (transformation of methane to energy and less potent carbon dioxide) on the farm enhances the sustainability of livestock operations by significantly mitigating various environmental impacts associated with manure management. Moreover, it plays an important role in reducing emissions and effectively harnessing the potential of manure as a valuable resource in a more environmentally friendly manner [2].

Within this framework, anaerobic digestion (AD) has become an established technology for treating organic waste. The number of biogas plants in Europe grew from 244 in 2010 to 688 in 2016 [7]. This technology is especially attractive as it aligns with a circular economy perspective [8]. Through anaerobic degradation, waste is converted into renewable energy in the form of biogas, which can be used to produce electricity via a combined heat and power (CHP) engine [9] or upgraded to biomethane for transportation or injection into the natural gas grid [10,11].

Biogas can be produced from a variety of feedstocks, including animal waste, energy crops, crop residues, municipal waste, food scraps or slaughterhouse waste. Certain industrial wastes are also a possibility for obtaining biogas. A typical “green” biogas plant uses animal waste and green plants as input raw materials, and the output of the process is biogas, which is used to produce electricity and heat, and organic residues from the fermentation process, which are an excellent fertilizer. The data show that for the production of biogas from plant residues, mainly cereal straw and corn cob are used in suitable proportions, which are grown in large quantities per hectare. Farms with at least 100 LLU (large livestock unit) are suitable for obtaining biogas from manure and slurry, whereby one livestock unit (LU—500 kg) produces approximately 1.5 m³ of biogas per day [12,13,14].

In recent years, the global pursuit of sustainable and eco-friendly energy solutions has gained momentum, with nations exploring innovative technologies to address both environmental concerns and energy security. In this regard, micro biogas plants have emerged as a promising and efficient means of harnessing renewable energy. Anaerobic digestion in micro biogas plants is a promising technology for treating livestock manure and the organic fraction of municipal waste, particularly in low-population communities or standalone waste treatment facilities. The study [15] examines the current status of micro biogas plant technology in Europe by identifying process design and operational characteristics, relevant EU policies, recent advancements in micro biogas plants, and the challenges faced. Micro biogas plants on small farms provide an effective solution for managing organic waste, preventing the release of greenhouse gases into the atmosphere, and offering various additional benefits to investors. When properly located and managed, such projects have no negative impact on the environment or people [16].

Slovenia, located in the heart of Europe, has long been recognized for its pristine natural landscapes and a proactive approach towards environmental issues. As the country endeavors to transition towards a more sustainable energy landscape, the exploration of micro biogas plants becomes particularly pertinent. These decentralized energy systems have the potential to contribute significantly to Slovenia’s energy portfolio, offering a locally sourced and environmentally friendly alternative. In this context, some studies [17] present a model for identifying the most suitable locations for setting up micro biogas plants (<50 kW) in Slovenia, offering an efficient method for processing organic waste in small local communities.

Slovenia offers excellent opportunities for the construction of micro and small biogas plants with rated power up to 1 MW, given a large part of the rural environment. The use of biogas enables greater energy independence and stability of the municipality or areas within the municipality, both for the supply of electricity and for heating. At the same time, it offers companies and farms new possibilities, such as the sale of electricity, gas or heat. The conversion of animal remains to other purposes also solves the problem of groundwater pollution due to the use of animal fertilizers. The main reasons for the small number of biogas plants are the economy of such plants, lack of knowledge and negative publicity generated by some biogas projects in Slovenia. In Slovenia, the focus was primarily on larger megawatt-class biogas plants [18,19,20].

The economic feasibility of on farm biogas operations has been discussed by many studies recently. In this light, ref. [17] proposed a pioneering model aimed at identifying optimal sites for the establishment of micro biogas plants, specifically designed for capacities under 50 kW. These micro biogas plants serve as highly efficient means of processing organic waste within small local communities, offering sustainable waste-management solutions. Developed utilizing geographic information system (GIS) tools, the model incorporates various key input parameters. These parameters include data on the number of farms and the livestock they house, along with their respective geographical locations. Additionally, information on the quantity of food waste generated by food establishments, as well as waste fat, is integrated into the model. The study [21] evaluated the economic feasibility of developing renewable energy from biogas projects in Ukraine. The analysis revealed that initial investment costs are relatively high, particularly for small biogas installations. The smaller the installation, the higher the investment cost per unit of capacity. To support small farms, loans and a specialized program for implementing small projects (up to 0.5 MW) are needed.

The economic policies surrounding on-farm biogas energy production were examined for small- and mid-sized swine and dairy operations in Nova Scotia, Canada. This investigation considered factors such as livestock type and farm size, utilizing multiple economic decision criteria [22]. Cost efficiencies resulting from economies of scale in on-farm anaerobic biogas production were generally greater for swine farms than for dairy farms. Findings from a baseline analysis indicate that, in the absence of incentives, on-farm biogas energy production was not economically viable across the studied farm size ranges, except for operations with 600 and 800 sows. Additionally, among the various single-policy schemes investigated, energy credit payments had the most significant impact on the feasibility of on-farm biogas energy production.

Table 1. Key findings of previous studies and additional contribution from the case study in Slovenia.

Study	Focus	Key Findings	Additional Contribution from the Case Study in Slovenia
Energy Efficiency and Emissions Impact of Biogas Plants [23]	Examines greenhouse gas emission reductions in biogas systems.	Showed that biogas plants significantly reduce CO2 emissions, particularly in agricultural areas by utilizing waste.	Assesses how Slovenia’s unique agricultural sector benefits from micro biogas plants in reducing emissions, improving energy efficiency and economic benefits.
Challenges of Sustainable Biogas Implementation [24]	Investigates economic and social challenges of adopting biogas plants.	Highlighted that upfront costs and lack of infrastructure were major barriers to widespread adoption.	Provides a detailed analysis of economic efficiency, including payback periods and financial feasibility for smallholders in Slovenia, offering specific solutions for local economic barriers.
Biogas as a Renewable Energy Source [25]	Focused on the potential of biogas for energy production and waste reduction.	Demonstrated that biogas is an effective renewable energy source, particularly in rural and agricultural areas.	Quantifies the specific energy output and waste management efficiency for micro biogas plants in Slovenia, contributing to national renewable energy strategies.
Economic Analysis of Small-scale Biogas Plants in Europe [26]	Analyzed the economic viability of biogas plants in different European regions.	Found that economic success depends on factors like subsidies and local market conditions	Provides Slovenia-specific economic analysis, factoring in government incentives and subsidies for small biogas plants, and identifies key areas where financial interventions are necessary.

summarizing the key findings of previous studies on biogas plants and the additional contributions made by the paper. The table highlights how the Slovenian case study builds on prior research by providing localized, specific data on micro biogas plants, economic feasibility, environmental impact, and role in Slovenia’s sustainable energy strategy.

The economic efficiency of biogas plants in Slovenia is a critical aspect that demands comprehensive examination. Factors such as capital investment, operational costs, government incentives, and the potential for revenue generation through electricity production and waste management must be carefully evaluated. This study aims to assess the financial viability of micro biogas plants, considering the unique socio-economic and environmental context of Slovenia. The objective of this paper is to address the scenario feasibility analysis of micro biogas plants using the case study for Slovenia for estimating the most suitable microbiogas plant, based on four different scenarios (scenario 1–20 kW, scenario 2–50 kW, scenario 3–100 kW, and the last scenario—250 kW). This paper is structured as follows: firstly, we present the data sources and the basis for calculation. Likewise, the methodology for investment analysis is presented. The next chapter contains the main results and discussion. We simulate different scenarios using slurry and maize sillage as the main materials for biogas production. This article concludes with the main findings and suggestions for further research.

This research explores the viability of small-scale biogas plants as an energy solution within the Slovenian context. Its unique contribution lies in assessing both the economic and environmental impacts of micro biogas plants, particularly in using animal manure in biogas production as a byproduct in milk or meat production. It addresses how these plants can provide a sustainable alternative to traditional energy sources, enhancing energy independence while reducing greenhouse gas emissions. By focusing on Slovenia, the paper provides localized data on the efficiency of biogas plants and demonstrates how such systems can contribute to broader sustainability goals. It likely emphasizes the role of agricultural waste in energy production, offering a model for other regions with similar economic and environmental conditions. Additionally, it discusses the financial implications, including investment costs, payback periods, and potential subsidies, making it relevant for policymakers and investors interested in renewable energy projects. This type of case study is valuable because it combines theoretical economic analysis with practical implementation data, offering insights into both the benefits and challenges of adopting biogas technology on a small scale.

2. Materials and Methods

Biogas can be produced from various combinations of substrates and co-substrates on micro biogas plants, which can be of different origins. According to the research [27], there are various suitable types of livestock farms in Slovenia of micro biogas plants, namely:

-

Cattle farms—Cattle produce large amounts of waste manure, which is excellent substrate for biogas production. Large agricultural areas related to cattle breeding farms also enable the production of corn or other energy-efficient vegetation for anaerobic fermentation.

-

Pig farms—Pigs produce large quantities of waste manure, which is excellent substrate for biogas production.

-

Poultry farms—Poultry, such as chickens or turkeys, create large amounts of manure, which can be used for biogas. As a rule, poultry manure is richer in nutrients than cattle and pig manure, which is why it is necessary to choose the appropriate biogas technology for stable anaerobic fermentation processes.

-

Mixed livestock farms—Farms that have several types of livestock can benefit from diversity slurries for biogas production. The use of different sources of organic matter can increase efficiency of the biogas production process.

-

Farms with large areas dedicated to the production of energy plants—Farms with extensive areas of agricultural land available can grow energy crops such as corn, which can be used as a co-substrate for biogas production.

For the calculation of the economic efficiency of biogas plants, it is very important to know the size of the plant in kW [27]. The size of a micro biogas plant on a livestock farm can vary depending on several factors, including the size of the livestock farm (no. of livestock units—LU), the available space on the farm, and the amount of other organic waste and energy needed. When determining the size of a micro biogas plant on a livestock farm, it is important to consider the following factors [27]:

-

Amount of organic waste—A larger farm with more livestock will produce more organic waste, which means that a larger plant will be needed to process this waste.

-

Energy needs—If the goal of biogas production on the farm is to generate energy for personal use or sell to the grid, it is essential to assess the farm’s energy requirements.

-

Available space on farm—The size of the biogas plant will also be limited by the physical space that is available at the farm. If space is limited, it will be necessary to choose a smaller device that still efficiently processes organic waste.

-

Technical specifications—Different types of biogas plants have different technical specifications and efficiency levels.

-

Financial resources—The financial resources available to invest in a biogas plant will have an impact depending on the choice and size of the device.

Since the purpose of smaller installations is to rely on the use of slurry as a by-product of the livestock farm, the calculations are based on different types of slurry. We start from the information that 620 L of biogas is needed to produce 1 kWh of electricity, although the information in the literature is very different and varies a lot [28]. Based on the nominal capacity of the power plant, we predict the annual production of electricity, and on this basis, we calculate the required amount of biogas and the required amount of substrate and raw material costs. In this, we limit ourselves to the most common substrates and some alternative ones and value them at their own price or at the purchase price, if we do not grow them ourselves. The slurry itself is not considered as cost, as we can later use the residue from the fermenter as digestate to fertilize the fields. Based on the estimated amount of slurry required for the process, we estimate the required number of livestock units (LU) for each size of micro biogas plant. The calculation of the coefficients begins with an animal live weight of 500 kg. Here, we start from

Table 2. Quantities of livestock manure for different categories of animals [27].

Animal Category	Slurry System	A System with Stable Manure and Slurry
	Slurry (m3/Year)	Stable Manure (m3/Year)	Discharge from Stable Manure (m3/Year)	Livestock Units (LU)	Slurry (m3/Year)/LU
Cattle up to two years old	11.60	8.4	5.8	0.6	19.33
Cattle over two years old	23.60	14.0	7.8	1.00	23.60
Pigs	1.38	0.94	0.46	0.24	5.75
Breeding pigs	5.10	3.46	1.68	0.34	15.00
Laying hens	0.064	0.032	0	0.003	21.33
				AVERAGE	17.00

, which shows the average amounts of livestock manure for different categories of animals.

We used a linear program to calculate the required amount of slurry and other materials, minimizing the costs of the mixture. The main constraint is the required amount of biogas (Equation (1)). The linear program was employed to calculate the required amounts of various materials needed to ensure the desired level of biogas production. This ensured that the material inputs were balanced in a way that maximized biogas output while minimizing costs of input materials. The resulting data on material quantities were subsequently used in the consequent feasibility study, where they played a key role in assessing the economic and practical viability of the biogas production process. Additionally, we utilized reference values from the established literature [27], which provide estimates of biogas yield per ton of source material, to inform our calculations. These values served as a benchmark, helping us to accurately estimate the potential biogas output based on the types and quantities of materials used. Optimization (calculations) was conducted in What’s Best Industrial, which runs in a spreadsheet environment, making it easy to combine the results with spreadsheet models used for economic/investment analysis.

All models were built in the Excel spreadsheet in combination with Visual Basic to increase model functionality. The optimization was conducted in What’s Best Industrial (Lyndo Systems), which operates as an Excel add-on. The linear program set up in Excel allowed for the calculation of the required amounts of slurry (from cattle or pigs) and additives. The biogas production from this material mix must match the required amount of biogas, which is calculated based on the bioplant’s power output (as detailed later in Equations (2) and (3)). In the study, we use two main substrates (cattle and pig slurry) in different amounts and corn silage as an additive. The purpose of the study was to demonstrate the maximum consumption of the main substrate (slurry) for biogas production, using the additive of corn silage. The program allowed entering different ratios between the main substrate and the co-substrate, but due to the extensiveness of the study, we show results with a 10% and 30% ration of corn silage and the maximum amount of slurry required for the operation of the biogas plant.

$$\begin{array}{c}\mathrm{M}\mathrm{i}\mathrm{n} \mathrm{F}\left(\mathrm{X}\right)={{\mathrm{c}}_1\mathrm{x}}_1+{\displaystyle \sum _{\mathrm{i}=2}^{\mathrm{n}}}{\mathrm{c}}_{\mathrm{i}}{\mathrm{x}}_{\mathrm{i}}\\ {\mathrm{x}}_1\ge 0\\ {\mathrm{x}}_{\mathrm{i}}\ge 0\\ {\mathrm{x}}_1{\mathrm{k}}_1+{\displaystyle \sum _{\mathrm{i}=2}^{\mathrm{n}}}{\mathrm{k}}_{\mathrm{k}}{\mathrm{x}}_{\mathrm{i}}=\mathrm{B}\\ {\displaystyle \frac{\sum _{\mathrm{i}=2}^{\mathrm{n}}{\mathrm{x}}_{\mathrm{i}}}{{(\mathrm{x}}_1+\sum _{\mathrm{i}=2}^{\mathrm{n}}{\mathrm{x}}_{\mathrm{i}})}}=\mathrm{D}\end{array}$$

(1)

• x₁—required amount of slurry (m³);
• X_i—required amount of additive i (t);
• k₁—amount of biogas (m³) produced per ton of fresh mass for slurry;
• k_i—amount of biogas (m³) produced per ton of fresh mass for addition i (i = 2,…,n);
• B—required amount of biogas (m³);
• D—proportion of the additive in the substrate (%);
• n—number of additives.

Although the model in this form can be applied to any amount of additional material into the mix with slurry, in reality, we deal mostly with different types of silage. For the purposes of this study, we limited ourselves to slurry (cattle and pig) and corn silage.

The amount of electricity that can be obtained from biogas is highly dependent on the efficiency of the engine, which is around 35%, and even more on the methane content in the biogas. From 1 m³ of biogas, depending on the efficiency, it is possible to obtain from 1.6 to 1.9 kWh of electricity. The specific consumption of biogas with 60% methane content in internal combustion engines is around 0.65 m³/kWh [29]. The authors [30] state similarly in their research, namely 0.62 m³ of biogas for 1 kWh of electricity. Parameter B is calculated as the product between the expected production of electricity (kWh) and the coefficient of 0.62 m³ of biogas for production of 1 kWh electricity.

As explained before, the estimation of biogas is as follows:

-

We assumed that [27] 0.62 m³ o biogas is required for 1 kWh of electric energy.

-

The amount of energy is calculated on the assumption of 10,000 h of motor operation and 0.8 efficiency. Therefore:

$$\mathrm{E}=\mathrm{P}\ast 10000\ast 0.8$$

(2)

• E—Electric energy (kWh);
• P—Yearly operation hours of engine (h) in cogeneration.

The required amount of biogas is then calculated as:

$$\mathrm{V}=\mathrm{E}\ast 0.62$$

(3)

• V—Required amount of biogas (m³);
• E—Electric energy (kWh).

As explained at the beginning in Section 2, this number was used as a constraint in the linear program used for the calculation of amounts of material used (L 189–196).

The basic calculation scenario is to produce only with slurry (D = 0). The next scenario is to add 10% corn silage to the total substrate. In model calculations, the Agricultural Institute of Slovenia values slurry at 0.015 EUR/kg (15 EUR/t). We also take into account the price of corn silage in the amount of 45 EUR/t. These are otherwise input parameters that can be changed arbitrarily. Calculations were made for cattle and pig slurry.

2.1. Estimation of the Costs of Construction and Maintenance of Plants

Estimating the costs of constructing and maintaining biogas plants on various types of livestock farms is a complex process, as it relies on multiple factors. These factors include the type of livestock farms, plant size, the availability of raw materials, biogas plant technology, regulatory conditions, and location.

Figure 1 shows a micro biogas plant, which is integrated into a livestock farm with the aim of improving economic and environmental efficiency. The definition of micro biogas plants is not entirely universal, though the concept generally refers to small-scale biogas production units designed to generate biogas from organic waste for local or household use. The size, capacity, and intended purpose of these systems vary based on regional needs and technical standards, so definitions may differ across contexts. The technical definition, sizing standards, and even terminology might differ slightly based on country-specific policies, energy requirements, or environmental considerations, so there is not a single universal definition. In Slovenia, biogas plants are called micro biogas plants up to 250 kW rated power [27].

The feedstock mix consists of solid cow manure and pig slurry, each representing approximately 41% of the total input mass. The remaining input is mostly from corn silage. The daily intake is about 15 t, with an average dry matter content of 20%. The primary digester has a volume of 850 m³, and the secondary digester has a volume of 1400 m³, with an integrated gas storage of 450 m³. The mesophilic zone in biogas production refers to the temperature range between 30 °C and 40 °C, typically around 35 °C, which is ideal for the activity of mesophilic microorganisms. These microbes play a critical role in breaking down organic material during anaerobic digestion, producing biogas that primarily consists of methane (CH₄) and carbon dioxide (CO₂). This temperature range is widely used in biogas plants because it offers a balance between efficiency and stability, making it easier to control than higher temperature systems. In mesophilic conditions, common microorganisms involved in the process include bacteria like Firmicutes and Bacteroidetes, which dominate the breakdown of organic matter. Methanogenic archaea, such as Methanosarcina, are key players in methane production in these systems. Although thermophilic digestion (above 50 °C) can increase biogas yields, mesophilic processes are often preferred for their robustness and lower energy requirements [31].

The total hydraulic retention time is on average 150 days (which corresponds to the minimum DE legal requirements), so the digestate storage with a capacity of 1800 m³ does not need a gas-tight cover. A cogeneration unit with a gasoline engine has a rated electrical output of 75 kW and an electrical efficiency of approximately 37%. A total of 1780 kWh of electricity is sold to the grid. The device’s own energy demand in relation to its energy production amounts to 10% for electricity and 19% for heat. During the year, approximately 22% of the heat produced is used to heat the pig barns, farm buildings and four apartments. The total investment costs amounted to approximately EUR 550,000 (in 2016) and are comparable with our study. The average annual revenue is EUR 168,500, of which 87% is from the sale of electricity to the energy company, and the rest from the valorization of digestate and heat. The annual costs are approximately EUR 110,500, of which 23% is due to the supply of raw materials, 40% due to depreciation, 31% due to operating costs and 6% due to labor costs [32].

Figure 1. The scheme of 75 kW micro biogas plant [32].

Figure 1. The scheme of 75 kW micro biogas plant [32].

An accurate assessment would require a detailed feasibility study taking into account all of the above the listed factors. Researching case studies [28] of other biogas plants on similar farms serves as a starting point. It is also important to consider the constant changes in technology, regulatory environment and the energy sector. The project is designed to last for a period of 25 years, at which point technological obsolescence is expected to occur. We have scheduled 8000 operating hours per year for the biogas plants.

Thus, we consider the following investment prices, in

Table 3. Estimated investments of biogas plants [17].

Rated Power (kW)	Investment Amount (€)
20	285,816.00
30	325,462.00
40	364,663.00
50	403,863.00
100	600,623.30
250	1,190,636.30

. Investment costs were taken from the literature and are specific for the country. They are based on a study [27] and are comparable, for instance, to Germany [33].

2.2. Estimation of Biogas Production Quantities from Different Substrates and Co-Substrates

Many different raw materials can be used to produce biogas on farms. For the purposes of this study, we utilized the average biogas yield from energy co-substrates (

Table 4. Assessment of the biogas potential of some substrates used in the calculations [27].

Raw Material	Biogas Production (m3/kg oDM)			oDM (%)	Biogas/Frees Mass (m3/t)
	Max. Production	Min. Production	Average		Max. Production	Min. Production	Average
Cattle slurry	0.35	0.20	0.28	6.5%	22.60	12.90	17.75
Cattle manure	0.35	0.20	0.28	15.0%	52.50	30.00	41.25
Cattle manure with straw	0.35	0.20	0.28	17.0%	59.50	34.00	46.75
Chicken manure (diluted)	0.45	0.35	0.40	7.5%	33.80	26.30	30.05
Chicken manure (solid)	0.45	0.35	0.40	41.3%	185.60	144.40	165.00
Corn for grain (50% DM)	0.85	0.75	0.80	46.0%	391.00	345.00	368.00
Corn for grain (60% DM)	0.85	0.75	0.80	54.0%	459.00	405.00	432.00
Corn silage	0.65	0.55	0.60	35.0%	227.20	192.30	209.75
Corn silage for grain	0.80	0.70	0.75	40.5%	324.00	283.50	303.75
Pig slurry	0.40	0.30	0.35	4.6%	18.50	13.90	16.20
Pig manure	0.40	0.30	0.35	18.6%	74.30	55.70	65.00

). The biogas yield varies from 513 Nl/kg oDM for stubble maize to 597 Nl/kg oDM for maize grown as a main crop [13,14], as the maize is used as the main co-substrate in anaerobic fermentation. For the purposes of calculating the economy of micro biogas plants, it is necessary to convert the data into biogas yield (m³/ton of fresh substrate).

In calculations, some other data from authors studies [13,14,27] were used for the economics of micro biogas plants:

-

From 1 m³ of biogas, we obtained 1.8–2.6 kWh of electricity (this factor depends on the size and the power of engine—the smaller the engine, the lower the efficiency and higher the factor is).

-

From 1 m³ of biogas, we obtained 2.2–3.1 kWh of heat energy. About 30% of the heat energy was consumed in the production process, to heat the fermenter.

-

To calculate working days of the engine, 8200 h was taken—these are the working hours produced by the engine in one year or in 365 days and represent engine operating hours.

2.3. Estimation of the Cost of Electricity Production at Micro Biogas Plants

When calculating the costs of electricity production, we proceed from the following assumptions (

Table 5. Assumptions for estimating the costs of operating a biogas plant.

Operative Costs	UNIT
Engine maintenance	EUR/hour	1
Biogas maintenance	EUR/hour	0.3
Manipulation
Insurance	EUR/month	500
Other costs	EUR/month	500
Engine working hours	EUR/year	8000
Labor consumption	EUR/year	730
Labor cost	EUR/hour	12.91

). Here, the work is evaluated on the basis of the average gross salary for the last quarter, which amounts to 12.85 EUR/hour at 172 monthly hours.

Using these assumptions and projected production along with thermal energy, we compute the cash flow, essential for investment evaluation, and the financial outcome, considering a 25-year amortization period for the biogas plant. Our basic calculation includes incorporating 10% corn silage into the mixture and utilizing the average reference price of electricity. The investment analysis is conducted with calculation of net present values as follows:

$$\mathrm{N}\mathrm{P}\mathrm{V}=-\mathrm{I}+{\sum }_{\mathrm{i}=1}^{\mathrm{n}}{\displaystyle \frac{{\mathrm{P}}_{\mathrm{i}}}{{(1+\mathrm{r})}^{\mathrm{i}}}}$$

(4)

• NPV—net present value;
• r—discount rate;
• P_i—generated cash flow in year I;
• n—number of years.

The internal rate of return (IRR) is the discount rate that reduces the project’s net cash flows to the investment’s value throughout the project’s implementation. It represents the rate at which an investment in the project becomes profitable.

$$\mathrm{I}\mathrm{R}\mathrm{R}=\mathrm{N}\mathrm{P}\mathrm{V}={\sum }_{\mathrm{t}=1}^{\mathrm{T}}{\displaystyle \frac{{\mathrm{C}}_{\mathrm{t}}}{{\left(1+\mathrm{r}\right)}^{\mathrm{t}}}}-{\mathrm{C}}_0=0$$

(5)

• T = total number of time intervals;
• t = time interval;
• C_t = net cash inflows and outflows during a single period t;
• C₀ = baseline cash inflow and outflows;
• r = discount rate.

The costs of the raw material are added and are shown for different scenarios. The price of thermal energy estimated at the price of 102 EUR/Mwh [28]. We take into account that in the process, we use 10% of the total electricity production, and in the process, we used thermal energy in the amount of 30%.

2.4. Assessment of Expected Returns from the Sale of Electricity and Other By-Products of Micro Biogas Plants

Using the calculations performed, we determined the annual cash flow and conducted an investment analysis by calculating the net present value at various discount rates.

The tables in the results show calculations for different biogas plant sizes using cattle slurry. The price of the raw material and the composition of the mixture are taken into account, as presented in the previous chapters. We extrapolated the estimated amounts of investments according to [28] and took them into account for our nominal powers (

Table 6. Investment costs of biogas plants for four scenarios [27].

Scenario	1	2	3	4
Price (EUR)	25,886.00	325,462.00	364,663.00	403,863.00

).

The entire methodology of the study is presented in the flow chart in Figure 2.

3. Results with Discussion

In

Table 7. Required amount of slurry and corn silage for different types of biogas plants.

Power (kW)	Type of Slurry	Amount of Slurry (t)	Biogas Production (m3)	Corn Silage (%)	Material Costs (EUR)	Required Number of Livestock Units (LU)	Required Field Crop Area for Corn Silage (ha)
20	Pig	3453	99,200	0	0	301	0
	Pig	1934		10	13,105	165	4.8
	Cattle	3968		0	0	203	0
	Cattle	2054		10	21,998	105	5.1
50	Pig	8857	248,000	0	0	754	0
	Pig	4834		10	32,763	411	11.9
	Cattle	9920		0	0	507	0
	Cattle	5134		10	34,797	263	12.7
100	Pig	17,714	496,000	0	0	1507	0
	Pig	9668		10	65,525	823	23.9
	Cattle	19,840		0	0	1015	0
	Cattle	10,268		10	65,954	525	25.4
250	Pig	44,286	1,240,000	0	0	3768	0
	Pig	24,169		10	163,811	2056	59.7
	Cattle	19,840		0	0	2536	0
	Cattle	10,268		10	173,985	1313	63.4

, we present different scenarios of using cattle and pig slurry with combination with different corn silage ratios for different powers of biogas plants (20 kW, 50 kW, 100 kW and 250 kW). As manure is the main substrate on livestock farms, the main guide in the calculations is to use as much slurry as possible in the biogas plant. We assumed that the cost of slurry was zero because the remains (digestate) can be used as fertilizer after the process.

Upon closer examination, it becomes evident that estimated power capacities exceeding 100 kW necessitate significantly larger quantities of both slurry and corn silage area for efficient operation. This observation underscores the inherent scalability challenges associated with larger biogas units. Consequently, we arrive at the conclusion that the establishment of larger-scale biogas facilities should be approached as a collaborative endeavor, ideally as joint community investments involving multiple farmers. By pooling resources and expertise, farmers can overcome individual limitations and leverage economies of scale to enhance the feasibility and sustainability of such ventures. This approach not only optimizes resource utilization but also fosters synergistic partnerships among community members, laying the groundwork for shared prosperity and environmental stewardship.

It is evident that power requirements exceeding 100 kW demand substantial quantities of slurry and corn silage area for sustained functionality. “This observation gains further significance when we take into account the average size of farms in the region”. This underscores the need for collaborative investments in larger units, ideally spearheaded by multiple farmers within the community. By consolidating resources and expertise, farmers can collectively alleviate financial strain and capitalize on economies of scale, fostering more efficient and economically sustainable agricultural operations.

The results of the simulations with the predicted parameters mostly result in negative investment values (

Table 8. Calculation of discount rate (DR), NPV, break-even prices and required support.

50 kW Devices (Use of Cattle Slurry)
DR	4%	5%	6%
NPV after 15 years (EUR)	−286,523.68	−286,454.46	−286,395.09
NPV after 25 years (EUR)	−217,166.64	−223,881.85	−229,641.08
Breakthrough price 15 years (EUR/Mwh)	299.69	311.12	322.95
Breakthrough price 25 years (EUR/Mwh)	253.37	265.77	278.76
Support required (15 years) in EUR/Mwh	160.95	172.38	184.21
50 kW Devices (Use of Pig Slurry)
DR	4%	5%	6%
NPV after 15 years (EUR)	−273,792.31	−274,968.45	−275,977.16
NPV after 25 years (EUR)	−204,435.27	−212,395.85	−219,223.15
Breakthrough price 15 years (EUR/Mwh)	294.60	306.03	317.86
Breakthrough price 25 years (EUR/Mwh)	248.28	260.68	273.67
Support required (15 years) in EUR/Mwh	155.86	167.29	179.12
50 kW Devices (Use of Cattle Slurry)
DR	4%	5%	6%
NPV after 15 years (EUR)	−546,442.41	−515,488.35	−488,940.94
NPV after 25 years (EUR)	−373,049.82	−359,056.84	−347,055.91
Breakthrough price 15 years (EUR/Mwh)	241.10	244.78	248.58
Breakthrough price 25 years (EUR/Mwh)	226.19	230.18	234.36
Support required (15 years) in EUR/Mwh	102.36	106.04	109.84
50 kW Devices (Use of Pig Slurry)
DR	4%	5%	6%
NPV after 15 years (EUR)	−452,663.07	−430,882.40	−412,202.45
NPV after 25 years (EUR)	−279,270.48	−274,450.89	−270,317.43
Breakthrough price 15 years (EUR/Mwh)	226.09	229.77	233.58
Breakthrough price 25 years (EUR/Mwh)	211.18	215.17	219.35
Support required (15 years) in EUR/Mwh	87.35	91.03	94.84
100 kW Devices (Use of Cattle Slurry)
DR	4%	5%	6%
NPV after 15 years (EUR)	−735,301.27	−722,066.24	−710,715.37
NPV after 25 years (EUR)	−388,516.09	−409,203.23	−426,945.32
Breakthrough price 15 years (EUR/Mwh)	217.02	221.82	226.79
Breakthrough price 25 years (EUR/Mwh)	197.58	202.78	208.24
Support required (15 years) in EUR/Mwh	78.28	83.08	88.05
100 kW Devices (Use of Pig Slurry)
DR	4%	5%	6%
NPV after 15 years (EUR)	−552,560.43	−557,200.92	−561,180.78
NPV after 25 years (EUR)	−205,775.25	−244,337.90	−277,410.73
Breakthrough price 15 years (EUR/Mwh)	202.40	207.20	212.17
Breakthrough price 25 years (EUR/Mwh)	182.95	188.16	193.61
Support required (15 years) in EUR/Mwh	63.66	68.46	73.43
250 kW Devices (Use of Cattle Slurry)
DR	4%	5%	6%
NPV after 15 years (EUR)	−914,584.54	−952,285.47	−984,619.26
NPV after 25 years (EUR)	−47,621.59	−170,127.93	−275,194.13
Breakthrough price 15 years (EUR/Mwh)	184.87	189.03	193.33
Breakthrough price 25 years (EUR/Mwh)	168.01	172.52	177.25
Support required (15 years) in EUR/Mwh	46.13	50.29	54.59
250 kW Devices (Use of Pig Slurry)
DR	4%	5%	6%
NPV after 15 years (EUR)	−424,361.33	−510,015.38	−583,475.63
NPV after 25 years (EUR)	−442,601.62	−272,142.17	−125,949.50
Breakthrough price 15 years (EUR/Mwh)	169.18	173.34	177.64
Breakthrough price 25 years (EUR/Mwh)	152.32	156.83	161.56
Support required (15 years) in EUR/Mwh	30.44	34.60	38.90

). For this reason, after 15 years, support in the calculated amount is required. The results are greatly improved if the ratio of slurry to added substrate is changed. The negative results are also the result of the fact that we valued the slurry at a price of 15 EUR/t (KIS). If there is enough slurry available (but this requires a large number of LU), the net present values would be potentially positive already after 15 years, especially for larger biogas plants.

In

Table 9. Results for the simulation of a 50 kW micro biogas plant.

Discount Rate	4%	5%	6%	6.70%
NPV after 15 years (EUR)	70,091.95	40,737.28	15,561.56	0.00
NPV after 25 years (EUR)	243,484.54	197,168.79	157,446.59	132,893.59
Breakthrough price 15 years (EUR/Mwh)	142.43	146.11	149.92	153.85
Breakthrough price 25 years (EUR/Mwh)	127.52	131.51	135.70	140.06
Support required (15 years) in EUR/Mwh	3.69	7.37	11.18	15.11
Internal rate of return	6.70%

, we show a simulation of a 50 kW device, taking into account a 30% share of corn silage.

In this case, with full evaluation of the produced thermal energy, the project could reach a discount rate of 6.7% after 15 years. Here, we emphasize that heat evaluation is problematic in practice. Likewise, in this case, we need additional areas of corn silage in excess of 18.50 ha (with a projected yield of 50 t/ha of silage). We must also emphasize that if produced heat is not taken into the account, this feasibility is completely different, and in this case, the supports should be even higher. These findings align closely with our earlier research findings, as documented in the study conducted by [17]. Additionally, they corroborate the conclusions drawn by study [34]. Our simulation analysis further reinforces this consistency, indicating that when employing non-subsidized pricing models, we arrive at comparable estimates for the number of livestock units (LU) necessary to attain economic feasibility. This convergence of results underscores the robustness and reliability of our findings, lending credibility to the viability of the proposed approach across diverse contexts and methodologies. Such alignment across multiple studies enhances confidence in the validity of our conclusions and underscores the potential applicability of our findings in informing policy decisions and guiding future research endeavors.

As presented in the results in Table 7 and Table 8, with the calculation of break trough (breakeven) price and increase in share of corn sillage in the reactor mixture, the sensitivity analysis has in fact already been conducted. Also, Table 7 shows the results of the required number of livestock units to ensure enough slurry for biogas plants with powers 20–250 kW. Furthermore, since the average number of cows on cattle farms is 27 [35], this might suggest community biogas plants for multiple farms could be a solution, which is also suggested by [17]. This is why we conduct sensitivity analysis with reduced slurry usage and increased share of corn silage in the mixture. The sensitivity analysis further indicates that increasing the proportion of corn silage in the mixture (constrained to 30% in the linear program) does not necessarily lead to improved economic outcomes (

Table 10. Results for simulation of 50 kW micro biogas plant with 30% corn silage.

Installed Capacity (kW)	Electricity Production (kWh)	Cattle Slurry (T)	Corn Silage (t)	Share of Corn Silage
50	400,000	2158	925.085	0.30005
Required number of livestock units (LU)			127
Expected yield of supplement (t/ha)—Corn silage			50
Required field area for supplement in hectares			18.5
Cost of raw materials in EUR			73,998

and

Table 11. Results for simulation of 50 kW micro biogas plant with 30% corn silage.

Discount Rate	4%	5%	6%	6.0%
NPV after 15 years (EUR)	98,326.17	111,206.37	122,252.93	122,252.93
NPV after 25 years (EUR)	75,066.41	45,225.14	19,632.10	19,632.10
Breakthrough price 15 years (EUR/Mwh)	241.10	244.78	248.58	252.51
Breakthrough price 25 years (EUR/Mwh)	226.19	230.18	234.36	238.72
Support required (15 years) in EUR/Mwh	102.36	106.04	109.84	113.77
Internal rate of return at real price	6.00%

). However, it does increase the required land area while reducing the number of necessary livestock units. Although this scenario may be more realistic, it could adversely affect the sustainability of resource utilization.

In order to achieve economic feasibility, it makes sense to study some other possible substrates. For example, in Europe, most work is undertaken with sugar beet [36]. It also makes sense to include stubble crops for biogas production, as they do not directly affect the market with the prices of the main crops.

4. Conclusions

In this paper, the economic feasibility of on-farm biogas plants was evaluated through a case study approach utilizing Slovenian data across four different scenarios. Utilizing the assumptions we have outlined, and projecting production levels alongside thermal energy utilization, we engage in a comprehensive analysis to calculate the cash flow, a fundamental component for evaluating the investment viability. This assessment is pivotal in determining the financial outcome over the anticipated 25-year amortization period for biogas plants. Our methodology encompasses a meticulous consideration of various factors, including input material composition and energy pricing dynamics. Specifically, our basic calculation strategy involves integrating 10% corn silage into the biogas production mixture. Additionally, we employ the average reference price of electricity to ensure a holistic assessment of the financial landscape surrounding biogas production. Through this rigorous evaluation process, we aim to provide robust insights into the economic feasibility and long-term sustainability of biogas initiatives in agricultural settings. The findings indicate that micro biogas plants with estimated capacities of up to 250 kW are not economically viable without subsidies. However, their economic viability improves when maize silage is added as a feedstock. Additionally, utilizing thermal energy is essential to achieving economic feasibility. The paper also calculates the amounts of subsidies required to make these biogas plants economically viable.

The model presented in the paper is based on general assumptions, and despite some minor deficiencies, it fulfilled our expectations, and it can be used for investment analysis in the form of decision support system when investing into on farm micro biogas plants.