EXTENDED COST BENEFIT ANALYSIS OF A BIOGAS GENERATION PLANT

Abstract

Solid waste is a growing problem in Sri Lanka in the absence of proper managementmeasures. Development and implementation of a National strategy for municipal solidwaste management is essential in order to reduce environmental, social and the economicproblems associated with the present disposal practices. Such strategies however, need tobe subjected to proper economic analysis in order to arrive at informed decisions. Thispaper presents an extended cost benefit analysis of a biogas generation plant that usesmunicipal solid waste as the raw material.

To dispose vegetable market garbage available in Wattala, Kandana and Ja-ela areas a640 Mt capacity biogas/ bio fertilizer project has been housed at Muthurajawela (alongHamilton canal, Elakanda), by the National Engineering Research & DevelopmentCenter of Sri Lanka (NERDC) which uses Dry Batch Anaerobic Digester Technology.Among the other biological treatment options, anaerobic digestion is the most costeffective, due to the high-energy recovery linked to the process and its limitedenvironmental impacts.

Economic analysis has been carried out to identify environmental costs and benefitsassociated with the above project. Several environmental valuation methods have beenapplied to value the identified costs and benefits. The main benefit of reduction ofmunicipal solid waste has been estimated by contingent valuation method using samplesfrom Wattala-Mabola, Ja-ela, and Peliyagoda local authority areas. Another benefit is thereduction of green house has emission due to the reduction of open dumping. Greenhouse gas (methane) emission from solid waste was estimated through Sholl Canionmodel and valued using avoided global damage cost approach. Benefits of biogas asenergy and organic fertilizers and employment benefits were estimated by market basedapproaches

The project is viable from economy and environment point of view with net present valueof Rs 142 million for a 20-year period with 10% discount rate. This analysis provides ajustification for undertaking solid waste management strategies in a technologically,environmentally and economically viable manner