*2.6. Environmental Considerations*

As depicted in the system boundary (Figure 1), all energy requirements for the operation of the AD plant were met internally via the CHP engine, where no CO2 emissions were assumed. Surplus heat was fully used on-site with the understanding that it displaces kerosene, which is a conventional heating fuel on farms in Ireland [54]. According to Upton [57], the energy output from kerosene is 36.4 MJ <sup>l</sup>−1, with CO2 related emissions at 0.25 tCO2 MWh−1. All electricity generated that exceeds the energy demand of the AD plant and farm was exported to the national grid. The subsequent CO2 savings were calculated based on the average emissions produced by the current energy mix of 0.367 t CO2 MWh−<sup>1</sup> [58].

The study accounted for the release of CO2 in the combustion of biogas, at a rate of 83.6 kg GJ−<sup>1</sup> [59]. Furthermore, the study included a "do nothing scenario", which incorporated the GHG emission savings in comparison to a no AD plant scenario. This included the emissions released from manure storage and application to land. Calculations follow guidelines from an OECD report, where emissions during storage are based on 20% potential biogas production over a 2-month period. Emissions from land application were calculated based on 10% remaining biogas potential [60]. The emission factor of biogas was calculated to be equivalent to be 11.9 kg CO2 based on global warming potential (GWP) of 28 for methane [61].

### *2.7. Establishment and Operating Costs*

As a new enterprise, establishment costs have to be accounted for within the model. The capital cost for the AD plant was quantified by compiling the capital costs and associated CHP electrical capacity of several SSAD plants (Figure 3). The data gathered gave an estimation of the average establishment costs for the model. Figure 3 correlates with similar studies [48], seeing a reduction in capital costs as the capacity of the plant increased.

**Figure 3.** Establishment cost for farm-scale anaerobic digestion plants. Estimated, based on reports from [62–69].

The published data available on the running of Irish farm-scale AD plants are quite limited, mainly due to the relatively low number of plants in operation [16]. Considering these limitations, this study puts forward a list of annual expenditures to provide an appropriate representation of the Irish context.


Taxes and interest were not considered in the financial assessment of the plants. Taxes are calculated based upon the company's total profits or loss; therefore, including taxes would not reflect the actual revenue generated by the project. Interest was also not considered, as it would give a distorted representation of the cost of financing, because of its reliance on fluctuations in the financial market.

### *2.8. Revenue Streams and Financial Indicators*

Electricity exported to the national grid is sold according to the Renewable Energy Feed-in Tariff (REFIT), introduced by the Irish Government in May 2010 [72]. These tariffs were offered for a period of 15 years with indexation, including a rate of 15.8 c€ kWh−<sup>1</sup> for electricity exported from an AD plant with a CHP capacity of less than or equal to 500 kW. The current Irish REFIT schemes have since closed as of December 2015. It is presumed that this support will reopen in the coming years with a new funding round at the same rates for a period of 20 years. Revenue is calculated at the point that exported electricity enters the national grid, with subsequent transmission and distribution losses not considered.

Energy used to satisfy the farm's on-site power demand was based upon Ireland's business electricity rates from July to December 2017 [73]. The farm scenarios considered under this study were compatible with two rates: energy users consuming less than 0.02 GWh yr<sup>−</sup>1, a purchase rate of 19.9 c€ kWh−<sup>1</sup> applies; for energy users consuming between 0.02 to 0.5 GWh yr<sup>−</sup><sup>1</sup> a rate of 15.1 c€ kWh−1.

The thermal energy produced via the CHP engine was understood to displace kerosene heating oil as a fuel at a cost of 8 c€ l −1 [74]. In addition, the simulated plants take advantage of the "*Support Scheme for Renewable Heat*" launched in mid-2019 [75]. The scheme provides a tari ff of 2.95 c€ kWh−<sup>1</sup> for a period of 15 years for AD plants producing less than 300 MWh yr<sup>−</sup><sup>1</sup> [75]. Accounting for the cost of infrastructure, the revenue generated from the sale of thermal energy via the district heating system was estimated to be €0.03 kWh−1.

The financial indicators used to assess and compare the economic performance of the di fferent plant scenarios included the net present value (NPV), internal rate of return (IRR), simple payback period, and discounted payback period. The NPV gives an indication of whether the project is profitable, taking into account the value of cash flows at di fferent times, as shown in Equation (7). The IRR is a discount rate that makes the NPV of all cash flows equal to zero. The discount rate indicates the risk an investor takes in investing in a project. The higher the risk, the larger the discounted rate expected in compensation. This study used a discount factor of 5% and a project lifespan of 20 years, which is deemed appropriate for an AD project of this scale as reported in the literature [76–78]. The payback period refers to the number of years it takes to generate enough revenues to pay the investment back. The discounted payback period makes the same calculation but includes the time value of money.

$$NPV = \sum\_{t=0}^{n} \frac{NCF\_t}{\left(1 + r\right)^t} \tag{7}$$

where *NCFt* is the expected net cash flow, *t* is time and *r* is the discount rate.

Government supports through capital subvention grants have proven e ffective in increasing the deployment of AD plants by significantly lowering establishment costs. Grants of up to 50% have been adopted in countries such as Sweden, France, Wales and England [68]. This study incorporated a governmen<sup>t</sup> subvention gran<sup>t</sup> of 50% to provide an understanding of its implications.
