Solution on Energy and

Environment Development

Technical and Commercial Models for Biogas Projects

in China-experience from the ADB project
Liu Xin, Managing Director, Ph.D
Energy and Environmental Development(EED)
Engineering Limited

Contents
EED brief introduction
Design of commercial operation and
management model
Case study in ADB project

EED brief introduction

EED(Energy and Environmental Development
Research Center & Engineering Limited) is:

EED Research Center is a policy research institute for renewable energy

and environmental protection for the Chinese government and the
enterprises.

EED Engineering Limited is professional engineering limited for the

energy and environmental engineering design, construction and
maintenance.

EED brief introduction

EED Research Center is implementing project funded by ADB
in association with GIZ for Integrated Renewable Energy
development Sector Project Phase II which provide the
professional consulting service for construction and operation
of 113 biogas projects.
The technical and commercial model for the biogas project in
china is one of the outputs for this project with consideration
of the current situation of the biogas plant design, construction
and operation.

Technical models developed in China

In China, government will facilitate the development of
biogas to improve the environment, to generate the biogas as
the renewable energy and develop the Chinese rural economy
with the rapid urbanization progress in china.
Chinese government provides the subsidies to the biogas
industry since early of this Century, to private enterprises that
have interest to invest in this area.
The policy framework has been also developed in China from
laws, regulations and standards.

Recycling among waste, CHP and Bio-fertilizer

Plantation
(Agricultural straw,
silage,
Fertilizer)
Biogas
(Bio-fertilizer,
Electricity,
Heating )
Animal Husbandry
(Animal waste,
Feeding stock)

Normal technical route to achieve the recycling

 The biogas plants in PRC aim at treating the waste from the
livestock farms, kitchen waste and sewerage plants in a recycling
manner, to reduce the pollutants of concerned areas, reach the PRC
discharge standards of discharged wastewater, also produce biogas
for centralized household supply, CHP or upgrading. So normally
we refer to the different technical models in accordance with the
types of the raw materials and utilization of the produced biogas.
Inputs: Animal manure, agricultural by-products, kitchen waste,
food processing by-products, sludge, and mixed materials of some
of them abovementioned, etc
Output: Biogas (Centralized households supply, CHP, upgrading
as fuel; Digestate (usually been used as bio-fertilizer, or been
processed as organic fertilizer)

Highlights of the units in the designed model

Feedstock
collection unit

Digestate depth
processing unit

Pre-treatment
unit

Organic fertilizer
processing unit

Biogas producing
unit

Biogas
purification and
power generation
unit

Automatic control
unit

Design of commercial operation and

management model
Feasibility: Based on the experience of international biogas projects
and characteristic of the domestic ones, in general, there are about
five commercial modes of biogas plants are developed in china as
below in terms of the different operation bodies:
I. Livestock farm owner self-operating and management mode
II. Professional investing company operation management mode
III.Power company operation management mode
IV.Joint venture operation management mode
V. Energy service operation management mode

Livestock farm owner self-operating and management mode

Concept: Biogas plant will be constructed in the livestock farm

and will be operated by the farm owner, to make profits by
selling products of the plant to end users including the State Grid
or nearby farmers by centralized biogas supply, selling residue
and slurry to plantation companies and households.
Advantage: More benefits to the farm owners
Disadvantage: Unprofessional management knowledge make
cause the fail operation and management of the biogas plant; risk
of products selling
Scope of application: small- and medium-scale biogas plants

Professional investing company operation management mode

Concept: it refers to introduce investing company for

operating and managing biogas plants, which
separates operation from livestock farm and biogas
plant. Biogas plants will be operated independently
and make profit by selling products of the plant to end
users including the generated power to local power
agency or supply the biogas to nearby farm
households, selling digestate to agricultural
enterprises or local households.

Professional investing company operation management mode

Demonstration:

Professional investing company operation management mode

Advantages:
professional management level and high efficiency of production;
1 investing company can be involved for managing multiple biogas
plants.
Disadvantages:
risk that needs be taken by investing company; substrates supply
contracts need to be signed with many livestock breeding farms,
risk of products market.
Scope of application: large-scaled biogas plants with great profits

Power company operation management mode

Concept: This management mode refers to

introducing power company to operate and manage
biogas plants, which separates biogas plant operation
from livestock farm. Biogas plants will be operated
independently and make profit by utilizing power
generated, selling digestate or processed organic
fertilizer to agricultural enterprises or farm
households.

Power company operation management mode

Demonstration:

Power company operation management mode

Advantages:
Power Company is directly responsible for project operation,
avoiding the obstacles of on-grid connection and power market.

Disadvantages:
This model requires power generation from biogas, so it is not
suitable for area without mature grid network.

Scope of application:
This mode is suitable for large scale on-grid biogas plants.

Joint venture operation management mode

Concept:

it refers to introducing joint venture to operation and

management of biogas plants, and it will be operated independently

and make profit by selling power to local State Grid or other
nearby farms, selling digestate or processed organic fertilizer to
agricultural enterprises or farm households.

Joint venture operation management mode

Demonstration:

Joint venture operation management mode

Advantage: this mode can ensure the free feedstock and

professional biogas technicians, which will improve the
efficiency and profits of biogas plants.

Disadvantage: this mode is that only farm owners could be

involved.

Scope of application This mode is suitable for biogas

plants in which farm owners has strong financial capacity and
management ability.

Energy service company operation

management mode

ConceptIt is based on energy management contract to

introduce Energy Service Company to operate and manage
biogas plants. Energy management contract needs to be signed
between farm owner and Energy Service Company, which
covers energy saving targets, financing and upgrading issues
of biogas plants. The profits of this mode mainly come from
energy saving profits.

Energy service company operation

management mode

Demonstration:

Energy service company operation

management mode
Advantage: this mode is to set energy saving as the first
target, and introduce more professional management to ensure
the efficient operation of biogas plants and realize the
optimized benefits.
Disadvantage Energy management contract is now mainly
applying in the area of industry energy saving. It is rarely
applied in biogas plants.
Scope of application This mode is suitable for large-scaled
biogas plant which could apply for energy saving subsidy.

Case study
Commercial operation management model design
Since Shandong Lihai Cool-storing Co., Ltd has a solid financial strength, an
energy company will be set up separately and will be operated as a venture
model to contributing to the sustainable development of the project.
Economic benefit analysis
The main incomes are as follows

Case study
The process flow diagram of duck farm in Shandong Province, PRC:

Case study
Environment benefit and social benefit
The project will use the animal manure from 3 livestock breeding
farms of the surrounding, 21,900 tons of duck manure and 39,000
tons of wastewater will be treated, which can not only improve the
environment of local areas, but also provide more job opportunities
and drive the development of breeding industry and eco-farming in
the surrounding. It is a good example carry with obvious social
benefits.

Case study
Risks of material supply:
The operation of biogas project aims to treat various sources, so the supply
of raw materials can affect the normal operation of project. The suggestion
is to build up stable material supply channels.
Solution: It is advised to build up stable material supply channels, e.g. to
sign contract with material suppliers and ensure the material quality, to
maintain self-supply capacity, etc.

Risks of biogas-fertilizer utilization

Biogas project generates quite amount of fertilizer. The full utilization of
biogas-fertilizer is a key issue because it can maintain economic, social and
environmental benefit of the project.
Solution: It is advised to develop and maintain reliable partnership with
fertilizer clients, e.g. to sign contract with long-term fertilizer users, to
combine power business and fertilizer sales.

Thank You
Energy and Environmental Development Research Center (EED)
Address: Room 6F, Tower A, International Metro Center, No. 3
Shilipu, Chaoyang Road, Chaoyang District,
Beijing, P.R.China,100025
Fax:
010-85860430/31-109
Email: info@eed.com.cn
Website: www.eed.com.cn