1. Exploring a systems approach for the economic assessment of small-scale anaerobic biodigesters for rural areas Michael Smith University of KwaZulu-Natal Energy Postgraduate Conference 2013

2. Anaerobic Digester (AD) Anaerobic digestion –Decomposition of organic matter under the absence of oxygen –Producing a gas (Biogas), and an effluent (bioslurry/digestate) Anaerobic Digester/Biodigester –Tank/Construction of varying size in which organic matter is fed and allowed to decompose via AD (International Workshop on Domestic Biogas, 2009)

3. AD for Rural Areas Off-grid energy provider? Using the AGAMA BiogasPro6 Households required to feed digester 20l water per day 20kg cow manure per day –Provides approx.. 2 hours burn time per day –Plus: fertiliser for crop production

4. Economic assessment Typical findings There is potential, although significant capital costs tend to outweigh the financial benefit Financial results from Smith (2011) – WRC Project K5/1955 –Financial cost R 38 532.23 –Financial benefit R37 880.37 (over 15 year assessment; discounted at 6%) –NPV-R651.85 –IRR-0.25% –BCR0.98 Economic results!! TOTAL ECONOMIC COST ZAR 46 704.43 TOTAL ECONOMIC BENEFITZAR 225 487.72 ECONOMIC NPV ZAR 178 783.29 ECONOMIC IRR 57.68% ECONOMIC B/C RATIO 4.83

5. A systems approach Considering the whole system as it applies to a rural household… In a standard cost-benefit assessment: BIOGAS Fertiliser Avoided Fuel Costs Electricity Paraffin Firewood LPG Avoided chemical fertiliser purchases

6. A systems approach BIOGAS Time saving Meal preparation Instant cooking Cleaning Health benefits Reduced Indoor Air Pollution (IAP) Reduced respiratory disease Better productivity Reduced cost of illness Reduced loss of life Environmental Benefits Reduced deforestation Erosion GHG mitigation Reduced GHG emission Clean & efficient cooking Reduced emission from cattle manure

7. A systems approach Digestate augmented with Rain Water (RW) Harvesting Time saving Reduced water collection Grey water used to feed digester RW used in HH Digestate (+water) used for crop cultivation Fodder crops Cattle fed  reduced pressure on grazing lands Reduced erosion Healthier cattle Food crops Improved yield Improved quality Food security

8. Namaste SA Valuing non-market impacts –A challenging, but necessary process Rural setting: Limited methodology Shadow pricing Urban setting: Contingent valuation Hedonic pricing Travel cost method (TCM) Urban setting: Contingent valuation Hedonic pricing Travel cost method (TCM)

9. The challenge moving forward Developing a rural programme that integrates and develops a biodigester SYSTEM To assure the realization of ALL economic benefits –Rain water harvesting –Improved / changed cattle keeping practice –Improved water management practice –Improved farming methods –A system leading to food security, energy security, and natural resource management

10. Thank you Michael Smith University of KwaZulu-Natal e. mikesmith@live.co.zamikesmith@live.co.za m. +27 82 822 4688 f. +27 86 528 2116