Can slurry biogas systems be cost effective without subsidy in Mexico?

Biogas from pig slurry in Mexico has potential to produce 21 PJ per year, equivalent to 3.5% of natural gas consumption in 2013. In this paper, three different scenarios are analysed: mono-digestion of pig slurry in a finisher farm (scenario 1); co-digestion of pig slurry and elephant grass in a finisher farm in situ (scenario 2) and co-digestion of pig slurry and elephant grass in centralised biogas plants (scenario 3). The digesters proposed are anaerobic high density polyurethane (HDPE) covered lagoons. HDPE centralised plants can have capital costs 5 times cheaper than European biogas plants. The economics of utilisation of biogas for electricity generation and as biomethane (a natural gas substitute) were investigated. Economic evaluations for on-site slurry digestion (Scenario 1) and on-site co-digestion of elephant grass and pig slurry (Scenario 2) showed potential for profitability with tariffs less than $US 0.12/kWh_e. For centralised systems (Scenario 3) tariffs of $US 0.161/kWh_e to $US 0.195/kWh_e are required. Slurry transportation, energy use and harvest and ensiling account for 65% of the operational costs in centralised plants (Scenario 3). Biomethane production could compete with natural gas if a subsidy of 4.5 c/L diesel (1 m³ of biomethane) equivalent was available.