The financial feasibility of compressed biomethane gas application in Thailand

Abstract

Abstract Background Biomethane is a clean fuel upgraded from biogas. It has similar properties to natural gas vehicle (NGV) and can be used as a substitute for fossil fuels in the transportation and industrial sectors. Currently, biomethane is not in widespread use as alternative energy because it depends on local biogas production. However, there are few replacement alternatives and the commercial system is only on a small scale. Therefore, the overall aim of this paper is to study the financial feasibility of local biogas aggregation for producing biomethane on various scales. The results of the study are expected to aid the decision-making of investors and governments in promoting the use of renewable and sustainable sources of energy. Methods Primary and secondary data are used in this research for descriptive and quantitative analysis, while net present value, internal rate of return, payback period, and cost per unit represent the financial instruments. The location and distance methods applied are Google Maps and Power BI software programs, based on biogas upgrading by water scrubbing. Results The results indicate that 10 potential biomethane production areas exist in Thailand, with a total biogas production capacity of 6,000 m3/day or more under gas pipeline conditions not exceeding 50 km. Compressed biomethane gas plants with a capacity of less than 6 tons/day should be funded by the government at 30% of the total investment for a payback period of 5–6 years. Plants producing more than 6 tons/day provide a good return on investment even without government funding. Conclusions While this study focuses solely on areas of Thailand, it is the researcher’s position that the integration of residual biogas plants provides greater benefit than flare, particularly in remote areas. The model proposed in this study can serve as a prototype for developing countries such as Malaysia, the Philippines, Latin America, etc. Furthermore, it can be used in developed countries committed to reducing greenhouse gas emissions in accordance with the Paris Agreement.