Biogas Digester for Hi Grade Feeds Full

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Mapua Institute of TechnologySchool of Chemical Engineering, Chemistry, and Biotechnology

BIOGAS DIGESTER

FOR HI-GRADE FEEDS

A Design Proposal Submitted in Partial Fulfillment of the

Requirements for the Degree Science in

Chemical Engineering

Chang, Miriam Abigail G.

Calipes, Danica Mari D.G.

Mejia, Anne Margaret G.

Talampas, Alvin A.

May 2006


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APPROVAL SHEET

This is to certify that we have supervised the preparation of and read the design report prepared

by Miriam Abigail G. Chang, Danica Mari Calipes, Anne Margaret G. Mejia, and Alvin A.

Talampas entitled “Biogas Digester for Hi-Grade Feeds” and that the said report has been

submitted for final examination by the Oral Examination Committee.

__________________________ ________________________

Winston B. Flora Teresita P. MadulidCourse Adviser Adviser

As member of the Oral Examination Committee, I certify that I have examined this designreport, presented before the committee on May 20, 2006, and hereby recommended that it be

accepted as fulfillment of the design report requirement for the degree in Program of Bachelor

of Science in Chemical Engineering.

________________________

Winston B. Flora

Panel Member

This design report is hereby approved and accepted by the School of Chemical Engineering,

Chemistry and Biotechnology as fulfillment of design report requirement for the degree in

program of Bachelor Science in Chemical Engineering.

________________________________

Prof. Luz L. LozanoDean, School of Chemical Engineering,

Chemistry and Biotechnology


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LETTER OF TRANSMITTAL

PROF. LUZ L. LOZANO

DeanSchool of Chemical Engineering, Chemistry and Biotechnology

Mapua Institute of TechnologyIntramuros, Manila

Dear Prof. Lozano:

In accordance with your instructions, Our group has written the following design paper on the

topic “Biogas Digester for Hi-Grade Feeds”.

This paper aims to present a study on the production of biogas for Hi-Grade Feeds in BocaueBulacan together with the design of the digester. This report gives you a complete background ofthe project. Also included are executive summary, market study, technical study, environmental

study, financial study and our conclusion and recommendation.

Attached here with our final report is a compact disc which contains word file used in this design

project.

We hope that this report will satisfy the requirements for Plant Design (DESIGN313).

Respectfully yours,

________________________ ________________________

Chang, Miriam Abigail Calipes, Danica Mari

2002119509 2001132920

B.S. CCE B.S. CHE

________________________ ________________________

Mejia, Anne Margaret Talampas, Alvin2002128418 2002121809

B.S. CHE B.S. CCE


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ii

ACKNOWLEDGEMENT

We would like to extend our gratitude and recognition to the following who help us

finished this study, Biogas Reactor for Hi-grade Farm. For without them, this study may not be

possible.

• Our families, for being our strength at times when we want to give up and for being

our inspirations to strive for the best.

• Ms. Theresita P. Madulid for giving us enough information regarding her Hi-grade

farm.

• Mr. Ric Perez for allowing us to visit his biogas digester.

• Mr. Ruben Mercado for his warm accommodation in his farm in Bulacan

• Engr. Felecitos Aguilar and Engr. Narciso Macaranas for joining in our farm visit

• Engr. Alvin Caparanga and Engr. Edwin Obra for supervising us in our equipment

design.

• Engr. Winston Flora for entertaining our questions during consultations and for

supervising us in our project.

• And most especially to the Lord Almighty for giving us the guidance and wisdom

To God be the glory!!

To all of you, we give our sincerest gratitude and love.

Abi, Nica, Mha-anne & Alvin


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TABLE OF CONTENTS

LETTER OF TRANSMITTAL……………………………………………………………………i

ACKNOWLEDGEMENT............................................................................................................... i

INTRODUCTION.......................................................................................................................... 1

EXECUTIVE SUMMARY ............................................................................................................ 5

Objectives of the Project............................................................................................................. 5

SWOT Analysis .......................................................................................................................... 5

MARKET STUDY ......................................................................................................................... 6

Production Description ............................................................................................................... 6

Use of Product............................................................................................................................. 7User of the Product ..................................................................................................................... 7

Historical and Projected Demand ............................................................................................... 8Historical and Projected Supply.................................................................................................. 9

TECHNICAL STUDY ................................................................................................................. 10

Description of Raw Materials ................................................................................................... 10

Material Balance Major Assumptions ...................................................................................... 11

Overall Material Balance.......................................................................................................... 12Detailed Material Balance (10-day process)............................................................................. 13

Process Flowchart ..................................................................................................................... 14

Equipment Specification........................................................................................................... 15

ENVIRONMENTAL STUDY ..................................................................................................... 17

Material Safety Data Sheet ....................................................................................................... 23

FINANCIAL STUDY................................................................................................................... 28

CONCLUSION AND RECOMMENDATION............................................................................ 50

APPENDIX................................................................................................................................... 52


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List of Tables

Table 6.1 GANTT Chart .............................................................................................................. 28

Table 6.2 Pre-operating expenses. ................................................................................................ 29

Table 6.3 Pre-operating salaries with benefits.............................................................................. 29Table 6.4 Administrative and Marketing expenses....................................................................... 30

Table 6.4 Construction Cost ......................................................................................................... 33

Table 6.6 Salary and wages projection ........................................................................................ 34

Table 6.7 Depreciation1 of all equipments................................................................................... 35

Table 6.8 Repair and maintenance of all equipments .................................................................. 36

Table 6.10 Projected revenue....................................................................................................... 38

Table 6.11 Inventory of finished goods ........................................................................................ 39

Table 6.12 Project cost................................................................................................................. 40

Table 6.13 Cost of production ...................................................................................................... 42

Table 6.14 Income statement....................................................................................................... 43

Table 6.15 Balance sheet ............................................................................................................. 45

Table 6.16 Cash flow. .................................................................................................................. 46

Table 6.17 Breakeven analysis .................................................................................................... 47

Table 6.18 Rate of investment ..................................................................................................... 48

Table 6.19 Payback period............................................................................................................ 49

List of Figures

Figure 3.1 Historical Demand......................................................................................................... 8

Figure 3.2 Projected Demand ......................................................................................................... 8

Figure 3.3 Historical Supply........................................................................................................... 9

Figure 3.4 Projected Supply............................................................................................................ 9

Figure 4.1 Overall Material Balance............................................................................................. 12

Figure 4.2 Detailed Material Balance........................................................................................... 13

Figure 4.3 Process Flowchart........................................................................................................ 14

Figure 4.4 Equipment Specification ............................................................................................. 15


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1

INTRODUCTION

The use of biogas as a source of fuel is a practice only recently introduced in this century.

The process of bacterial decomposition has occurred in nature since life began plants and

animals die and are recycled to sustain life on the planet. In the presence of oxygen, organic

material "composts" (undergoes aerobic decomposition). When decomposition occurs in the

absence of oxygen (anaerobic conditions), biogas is produced, and the liquid remainder is rich in

nitrogen and other nutrients.

The Philippines has substantial biogas resources. Biogas accounts for a significant

proportion of renewable energy generation (99% of new and renewable energy demand

excluding geothermal and hydro power for 1996), mainly from wood fuel and charcoal. Large

amounts of agricultural residues and municipal solid waste are also produced, offering promising

resources for heat and power generation.1

With the present energy and pollution problem in the Philippines, conversion of livestock

wastes as source of energy and fertilizer, offers a great advantage for the livestock industry. A

program that suits the need of backyard livestock raisers to abate the worsening problem of

environmental pollution is now given high priority.

Biogas is one of the renewable sources of energy receiving popularity in rural areas and

has successfully met the cooking energy needs of families. The optimum utilization depends

1 www. emb.gov.ph


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upon the successful physical installations, which in turn depend upon plant design and its

selection.2

Biogas is a zero waste technology. The products of biogas plants, like biogas and

digested slurry can be utilized economically for cooking and as manure for agriculture and

horticulture. Biogas is a non-poisonous and non-toxic gas which when mixed with air burns with

blue flame, without soot or any offensive smell. The slurry is rich in nitrogen, phosphorous,

potash and humus material. It has good applications in agriculture and horticulture.

Use of biogas technology improves the standard of living and can directly contribute to

economic and social development of a country.

However, there are hurdles to implementation of these systems, including high capital

costs, availability of economic and environmentally acceptable methods of gas processing, and

economic means for biogas utilization. Because of these limitations, agricultural biogas

production has remained a virtually untapped resource in the Philippines.

Considering the opportunities and problems on the biogas production the researchers

attempts to design a biogas digester for hog manure which is more efficient, economical and

environmentally accepted.

The complete design of the digester constructs a digester in larger scale for preheating of

water at Hi-grade feeds at Bocaue, Bulacan. In addition, it can minimize the amount of municipal

waste that can help in environmental preservation by utilizing that manure in more useful way.

2 www.encyclopedia.com


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Digesters are not a new idea and have been around for a long time. Increasing

environmental pressures on waste disposal has increased the use of digestion as a process for

reducing waste volumes and generating useful byproducts. The purpose of all these digesters is

to produce combustible biogas which can be burned to provide energy for a whole range of uses.

In the United States an outreach program called AgSTAR designed to reduce methane

emissions from livestock waste management operations by promoting the use of biogas recovery

systems. A biogas recovery system is an anaerobic digester with biogas capture and combustion

to produce electricity, heat or hot water. Biogas recovery systems are effective at confined

livestock facilities that handle manure as liquids and slurries, typically swine and dairy farms.

Anaerobic digester technologies provide enhanced environmental and financial performance

when compared to traditional waste management systems such as manure storages and lagoons.

Anaerobic digesters are particularly effective in reducing methane emissions but also provide

other air and water pollution control opportunities. The AgSTAR Program has been very

successful in encouraging the development and adoption of anaerobic digestion technology.

Since the establishment of the program in 1994, the number of operational digester systems has

doubled. This has produced significant environmental and energy benefits, including methane

emission reductions of approximately 124,000 metric tons of carbon equivalents and annual

energy generation of about 30 million kWh.3

Our group was able to visit and see the digester of Mr. Ric Perez in Bulacan. The Perez

household has the simplest structure and model of the digester and this has been working for

almost 14 years. They use this digester to produce biogas using the pig and chicken manure as

3 www.agstar.com


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their raw materials. The biogas produce was use as a replacement for LPG as a cooking gas for

their household. The equipment has also a safety measure. The cover of the digester is allowed to

rise but with a limit. When the limit is achieved, bubbles in water are visible for the pressure is

released through the water.

Also, Mr. Ruben Mercado uses biogas as a source of energy. The biogases produced by

the pigs are used to preheat the water for the boiler. In this case, he was able to minimize his

usage of banker oil for the water entering the boiler is already at elevated temperature. He is

using a lagoon which has been operating for almost five years. The design also includes safety

measures like u- tube.


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EXECUTIVE SUMMARY

Objectives of the Project

This study aims to design a Biogas reactor for Hi-grade farm that will produce biogas for

pre-heating water for the boiler of the mill. This project expects to achieve the following

objectives:

• To produce an efficient digester in which high profit will be achieved.

• To minimize the use of bunker fuel in the boiler

• To maximize the use hog manure to a useful product which is the biogas

SWOT Analysis

Strength

• Biogas is a zero waste technology

Weakness

• Not well-verse in the field of business- some financial elements may not be

considered which can affect in the financial reports

Opportunities

• High demand for Biogas

• Open to new trend and market

• New development/ techniques and technology

• Reduction of waste

• Peso depreciation – decrease of peso value will result to increase in savings due to

bunker fuel

Threat

• Peso appreciation – the increase of peso is a great effect in our company’s profit


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MARKET STUDY

Production Description

There are varieties of gas useful as fuel. The three most commonly used worldwide are

Liquefied Petroleum Gas (LPG, propane, butane), Natural gas, and Biogas4. LPG is a mixture of

volatile fractions from petroleum refining; principally propane, butane, propylene and butylene.

Natural Gas is a fossil fuel that was created eons ago by the anaerobic decomposition of organic

materials. It is often found in association with oil and coal.

Biogas is produced when bacteria breakdown organic material in the absence of oxygen,

in a process known as anaerobic digestion. The same type of anaerobic bacteria that produced

natural gas also produced methane today. Anaerobic bacteria are some of the oldest forms of life

on earth.

Biogas is generally between 60% methane, with the remainder consisting of 39% carbon

dioxide, hydrogen sulfide and other trace gases5. Biogas burns well and can be used to provide

energy in the form of heat or electricity. Biogas can therefore not only off-set fossil fuel imports,

it can result in no increases, and even reductions in greenhouse gases. Methane is 30-times more

reactive than C02 in causing global warming6.

4Twidell, John et. al. Renewable Energy Resources, (an imprint of) Chapman & Hall, London 1986

5 Fulhage, Charles et. al. Generating Methane Gas from Manure, Department of Agricultural Engineering, College of Agriculture

6 Woods, Sandra, et. al. Methane Fermentation of Biomass, Seattle, Washington September 1980


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Use of Product

It is used as a substitute for LPG in preheating the water upon feeding to the boiler. In

this way we will be able to lessen the use of bunker oil because the feed water is higher than

25ºC so heat required to convert water to steam will be lower.

User of the Product

It will be use by the Hi-grade feed located at Bocaue, Bulacan. The biogas will be use to

preheat the water that is required to the boiler.


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Historical and Projected Demand

Figure 3.1 Historical Demand

Figure 3.2 Projected Demand

The Historical and Projected Demand is based from the information given by Ms.

Teresita Madulid (Hi-Grade feeds Company owner) according to the demand in terms of amount

of water which is being fed to the boiler by 15% annually. The increase in production of feeds is

directly proportional to the amount of water used to the boiler.

Historical Demand

0

100

200

300

400

500

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Projected Demand

0

500

1000

1500

2000

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1 0

2 0 1 1

2 0 1 2

2 0 1 3

2 0 1 4

2 0 1 5

2 0 1 6


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Historical and Projected Supply

Figure 3.3 Historical Supply

Figure 3.4 Projected Supply

The Historical and Projected Supply is based from the information given by Ms. Teresita

Madulid (Hi-Grade farm Company owner) according to the supply which is for pigs increased by

10% annually.

Historical Supply

0

5000

10000

15000

1 9 9 6

1 9 9 7

1 9 9 8

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

Projected Supply

0

10000

2000030000

40000

50000

60000

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1 0

2 0 1 1

2 0 1 2

2 0 1 3

2 0 1 4

2 0 1 5

2 0 1 6


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TECHNICAL STUDY

Description of Raw Materials

There is a growing concern about the widespread problem brought about by the improper

disposal of animal manure in many tributaries in the Philippines. Recent outbreak of diseases in

some municipalities had been attributed to contaminated drinking water by the seepage of animal

manure in the drinking water supply. Recreational activities like swimming, fishing and camping

can be ruined. The long term consequence is the damage to aesthetic and intangible attributes of

the streams and destruction of the economic value of clean natural waters.

Hog production in the country has increased drastically in recent years due to rapid

increase in population and therefore meat requirements and the waste generated becomes

unmanageable. The Philippines produces 7.589 million metric tons of hog manure alone in

19997.

The raw material for biogas production must contain organically bound carbon and the

element nitrogen which is needed by the bacteria responsible for biogas production.

Animal manure contains a portion of volatile (organic) solids which are fats,

carbohydrates, proteins, and other nutrients that are available as food and energy for the growth

and reproduction of anaerobic bacteria. Pig manure is the commonly used principal raw material,

since more biogas can be generated from pig manure’s composition. Biogas generation from

these wastes has been proven to be technically feasible, economically viable and socially

desirable and since our study is mainly within Hi-grade Farm, pig manure is readily available.

7 Biomass Atlas of the Philippines, Philippine Biomass Energy Laboratory


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Material Balance Major Assumptions

The following assumptions are used in the production of Biogas:

• Biogas obeys ideal gas behavior

• Input slurry (diluted manure) in one day will be completely digested after 10 days

producing total of 235.73 m3 gas based from the material balance

• The gas produced per day is uniform in volume meaning 23.573 m3 gas/day

These are assumed to simplify design computations.


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Overall Material Balance

Figure 4.1 Overall Material Balance

OVERALL MATERIAL BALANCE

FINAL OUTPUT

BG = 235.73 m3

Sludge = 94,254

INPUT

Solid = 9810 kg

Liquid = 29,430 kg

INPUT

H2O = 58,860 kgBasis: 10 days complete

digestion


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Detailed Material Balance (10-day process)

Figure 4.2 Detailed Material Balance

DILUTION

TANKINPUTSolid = 9810 kg

Liquid = 29,430 kg

OUTPUT = 98100 kg

Diluted Manure

INPUT

H2O = 58,860 kg

DIGESTER

INPUT = 98,100 kg

Diluted Manure

OUTPU

Sludge

OUTPUT = 235.73

m3

Biogas


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Process Flowchart

Figure 4.3 Process Flowchart

Diluted

Manure

Manure

DILUTION

TANK DIGESTER

WaterBiogas


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Equipment Specification

P-1

V-2

P-2P-3

P-4

V-2


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Displayed Text Material Diameter Length P-1 Polyethylene Pipe 50.95 mm 0.40 m

P-2 Polyethylene Pipe 20 mm 1.40 m

P-3 Natural Rubber 20 mm 0.40 m

P-4 Polyethylene Pipe 50.95 mm 1.40 m

Pipeline List Valve and Fittings LiDisplayed Text Line Size

V-1 20 mm

V-2 20 mm

5 Elbows 20 mm


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ENVIRONMENTAL STUDY

Biogas Production for Hi-Grade Feeds

Consistent with the implementation of Presidential Decree 1586 (Philippine EIS

System Law) with an end view of attaining and maintaining an orderly balance between

socio-economic growth and environmental protection.

The goal is to minimize waste, to have a more economical source of energy and fuel

and to provide a better design for the recovery and utilization of gas in for water pre-heating

in Hi-grade feeds. .

I. Project Description

A. Basic Information

Upon proper approval, this project, the biogas production will be implemented on

July 2006 and it will be located in Bocaue, Bulacan. Generally, the people living within the

municipalities of Bulaon, Del Rosario, Dolores, Malino, Malpitic, Marmatad, San Nicolas,

Santo Nino, Quebiawan, and Telabastagan are the stakeholders or the persons who may be

significantly affected by the project. This project will be financed by the owners of the Hi-

Grade Feeds.


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B. Project Rationale

While maximizing biogas output from available waste materials is very significant,

maximizing the use and application of the gas deserve equal importance.

• For direct heating applications, biogas is used for cooking and brooding lamps

in heating chicks and piglets in livestock farms, for torch using fire

disinfectant in piggery pens to replace chemical disinfectant

• For typical family use, biogas can be used for ironing, and as a fuel for gas

mantle lamps, absorption-type refrigerator, in addition to cooking

• As fuel for internal combustion engines, biogas can be used as substitute for

diesel or gasoline. It has a higher octane rating than both conventional

petroleum fuels

Whereas the sludge component can be used in a given ways:

• As fertilizer for plants and agricultural crops,

• As feed for raising fish, for vermiculture (earthworms), and for pigs

• As dipping media for seed soaking

• As soil conditioner

Advantages

• Sludge is odorless and BOD effluent is reduced by 86%

• Organic wastes are reduced by 50% and relatively safe for disposal

• Effectiveness of the system all year round without the need of artificial

heating or expensive insulation of the digesters because of the

Philippine climate

• Construction of the plant is simple and the system is easy to operate


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• Reduce dependence on foreign oil and fossil fuels

• It can help boost the economy

Disadvantages

• Reluctance to handle animal or human excreta and to use biogas from

these sources for pre-heating

• Cost of digesters, especially for most people in rural areas

This document describes the production of biogas by transporting piggery waste of

the Hi-grade Farm to Hi-grade feeds and thus, we aim to economically use this resource.

Also, this project would help in improving our lives by manure a commercial value.

D. Description of Project Phases

1. Pre – Operational / Construction phase

The estimated total construction area of the digester is 25 m2 land in

Bocaue, Bulacan. It will be located near the boiler of the feeds. There will be trial

run before the start of operation.

2. Operational phase

The digester operation will be everyday and is intended to promote biogas

technology in rural areas.

II. Baseline Information

CLIMATE

November to April is generally dry while wet form May to October. The northeast

monsoon prevails over the sea from October to January bringing in moderated and light

rains, the east trade winds predominate from February to April but the step of Sierra Madre


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Mountains interposes the free movement of air resulting to a dry with scanty rain during the

period. While from May to September, the southeast monsoon prevails strong winds and

abundant rainfall and generally associated with storm and typhoon

GEOGRAPHY

The western part of the province is generally flat and is drained by the Angat and

Pampanga Rivers. Part of the western boundaries touches the extensive Candaba Swamps

which mark the pronounced depression in range.

POWER SOURCE

Bocaue is fully dependent to MERALCO for its electrical power needs. Survey

results showed that 90% of the total households in the municipality are already serviced by

the said company.

III Environmental Impact

Life Cycle Assessment

Figure 3: Overall Material Balance of the Proposed Process

Solid = 9,810 kgLi uid = 2 0 k

BG = 235.73 m

Slud e = 2 . 8 k

H2O = 58,860 kg


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1. Air Impacts

a. CH4

Methane (CH4) is a greenhouse gas that remains in the atmosphere for approximately

9-15 years. Methane is over 20 times more effective in trapping heat in the atmosphere

than carbon dioxide (CO2) over a 100-year period and is emitted from a variety of

natural and human-influenced sources. Human-influenced sources include landfills,

natural gas and petroleum systems, agricultural activities, coal mining, stationary and

mobile combustion, wastewater treatment, and certain industrial process.8

b. H2S

Hydrogen sulfide is a colorless gas with an offensive stench and is said to smell like

rotten eggs. The gas can be detected at a level of 2 parts per billion.. Just a few breaths

of air containing high levels of hydrogen sulfide gas can cause death. Lower, longer-

term exposure can cause eye irritation, headache, and fatigue.

c. CO2

Carbon dioxide is a colorless, odorless, faintly acidic-tasting, and non-flammable gas

at room temperature.

2. Water Impacts

a. NH4

Ammonia is a gas that occurs naturally in the environment and is also manmade.

From the biogas production, ammonia will come from the sludge withdrawn in the

8 Grolier Multimedia Encyclopedia. Grolier Interactive, Inc.1998


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digester. Ammonia is irritating to the skin, eyes, nose, throat, and lungs. Exposure to

high concentrations can cause serious burns.9

IV. Impact Mitigations or Enhancement Plan

1. Air Impacts

a. CH4

Methane (CH4) in this process is directly used after production of biogas. Pipes from

digester to the burner will be periodically checked and make sure that there is no leakage

2. Water Impacts

These compounds can be used as liquid fertilizer for the field.

VI. Reference:

Books:

• Grolier Multimedia Encyclopedia. Grolier Interactive, Inc.1998

• Webster Family Encyclopedia. 1996

URL’s:

• http://asiatravel.com/manila/pampangamap.html

• www. askjeeves.com/glass/manufacturing.html

• www. emb.gov.ph

• www.encyclopedia.com



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Material Safety Data Sheet10

Methane(CH4)

Chemical Product and Company Identification

Material Name: Methane

Chemical Formula: CH4

Synonyms: Methyl hydride, natural gas, marsh gas, fire damp.

Composition/Information on Ingredients

Component

CAS Registry

Number

Molar (volume)

concentrationExposure Guidelines

Methane 74-82-8 100%

Simple Asphyxiant

(ACGIH)

Hazards Identification

Emergency Overview

Methane is a colorless and odorless gas. It is not toxic; the immediate health hazard is

that it may cause thermal burns. It is flammable and may form mixtures with air that are

flammable or explosive. Methane is violently reactive with oxidizers, halogens, and some

10 Webster Family Encyclopedia. 1996


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halogen compounds. The concentrations at which flammable or explosive mixtures form are

much lower than the concentration at which asphyxiation risk is significant.

Potential Health Effects11

Routes of Exposure: Methane is not toxic by any route. Asphyxia may result if the oxygen

concentration is reduced to below 18% by displacement.

Lengths of Exposure: None of the available data indicate toxicity for exposures of any

duration.

Severity of Effect: No effect identified.

Target Organs: None identified.

Type of Effect: No effect identified.

Signs and Symptoms of Exposure: None identified.

Medical Conditions that may be Aggravated by Exposure: None identified.

Reported Carcinogenic and Reproductive Effects: None known to Voltaix, Inc.

First Aid Measures12

Asphyxiation

This is the primary health risk.

• Remove the affected person from the gas source or contaminated area. Note: Personal

Protective Equipment (PPE), including positive pressure, self contained breathing

apparatus, may be required to assure the safety of the rescuer. The concentration

required for asphyxiation is above the upper flammable limit. A boundary region, in

11 Webster Family Encyclopedia. 1996



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the flammable range, may exist between contaminated and uncontaminated areas.

Take appropriate precaution against ignition of the atmosphere in this region.

• If the affected person is not breathing spontaneously, administer rescue breathing.

• If the affected person does not have a pulse, administer CPR.

• If medical oxygen and appropriately trained personnel are available, administer 100%

oxygen to the affected person.

• Summon an emergency ambulance. If an ambulance is not available, contact a

physician, hospital, or poison control center for instruction.

• Keep the affected person warm, comfortable, and at rest while awaiting professional

medical care. Monitor the breathing and pulse continuously. Administer rescue

breathing or CPR if necessary.

Skin Contact

No detrimental effect of skin contact has been reported. Treat thermal burns by

assuring that affected area is cool by flushing with cool water, then apply dry sterile

dressings. If the patient is burned on the face, neck, head, or chest, assume that the airway

may also have been burned and obtain professional medical assistance immediately.

Eye Contact

No detrimental effect of eye contact has been reported.

Ingestion

Ingestion is not an observed route of exposure to gaseous hazardous materials.

Note to Physicians:

The combustion products of methane and air are water and carbon dioxide. Under

some conditions, carbon monoxide may also be produced.


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Accidental Release Measures

Containment

As these materials are gases at atmospheric conditions, the only means of

containment is the enclosure of the space into which the materials are released.

Evacuation

If the release is not contained in an appropriate device or system, all personnel not

appropriately protected must evacuate the contaminated spaces.

Handling and Storage

Handling

Handle this material only in sealed, purged systems. The design of handling systems

for hazardous materials is beyond the scope of this MSDS, and should be performed by a

competent, experienced professional. Consider the use of doubly-contained piping;

diaphragm or bellows sealed, soft seat valves; backflow prevention devices; flash arrestors;

and flow monitoring or limiting devices.

Storage

Gas is stored in the cover of the digesterin which its design is carefully studied.

Stability and Reactivity

Chemical Stability: Methane is stable.

Conditions to Avoid: Sources of ignition, exposure to air.

Incompatibility with Other Materials: Oxidizers, halogens and some halogen compounds.

Hazardous Decomposition, Reaction and Oxidation (other than burning) Products:

None.


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Toxicological Information

Acute Data (by route): None, methane is a simple asphyxiant.

Chronic and Subchronic Data: No information on its carcinogenicity or other effects is

included.


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FINANCIAL STUDY

GANTT Chart

No. Activities 2006

Feb March April-June July August

1 Completion of Study

2 Proposal and Approval

3 Purchasing of Materials

4Recruitment and Hiring of Laborer (EquipmentConstruction)

5 Land Development

6 Equipment Construction

7 Recruitment and Hiring of Personnel

8 Trial Run

9 Start of Operation

Table 6.1 GANTT Chart1

1 A Gantt chart is a popular type of bar chart that aims to show the timing of tasks or activities as they

when the project terminal elements start and finish.


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PRE - OPERATING EXPENSES

May

Trial-run cost (raw materials,salary & wages) 22742

Pre-operating salary and wage (design team) 180000

Total 202742

Amortization 40548

Table 6.2 Pre-operating expenses.

Trial run cost is based on 10 days period

Pre-operating salaries with benefits

Qty Days Salary/day Benefits Total Compen

Project design team (Students) 4 60 400 100 120000

Project consultant 1 10 6000 60000

Total Employees 5

Total Pre-optg & fringe 180000

Table 6.3 Pre-operating salaries with benefits

The project consultant will approve the design proposed by the students

1 Amortization is the distribution of a single lump-sum cash flow into many smaller cash flow installments, as determ

Amortization is chiefly used in loan repayments (a common example being a mortgage) and in sinking funds. Payments ar

duration of the loan, making it the simplest repayment model.


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Administrative and Marketing

A&M 2006 2007 2008 2009 2010 2011 2012

office supplies 1100 1111 1122.11 1133.33 1144.664 1156.11 1167.67 Amortization pre-op 40548 40548 40548 40548 40548

TOTAL 41648 41659 41670 41682 41693 1156 1168

Table 6.4 Administrative and Marketing expenses.

Office supplies increases 1% per annum.


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CONSTRUCTION COST

MATERIALS

Quantity Amount/unit Cost Specification

Gravel 4.56 m3 P969 4419

Portland cement 571 bags P165/bag 94215 40 kilo/bag

Plywood (formers) 20 P320/pc 6400 (1/4 x 4 x 8 ft)

Others:

Stainless Steel(Cover)

3 pcs P3,500 10500 1 plate (4x8 ft)

Drums (boiling

water &transportationmanure)

150 pcs P300/pc 45000 200 L

Gas Burner 4 pc P3,000 12000

Sand 11.4125ton

P350/ton 3994

Reinforcement bar 51 pcs P350/pc 17850 25-70kg/m2

Total Amount 194378


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PIPES

Quantity Amount/unit Cost Specification

Flexible Hose 1 P210/10ft 210 2 inchesdiameter

PE Pipe 3 P180/10ft 540 2 inchesdiamter

P100/pc (2”diameter)

Valves 2

P150/pc (4”

diameter)

300 2 and 4 inchesdiameter

Elbows 5 P25/pc 125 90 degrees 2inches diameter

Total Amount 1175

Grand Amount (Materials and Piping) 195553

Labor Cost

Qty Days Salary/day B

Supervisor 1 22 406

Laborer 10 22 325

cover


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Equipment Cost

Volume (m3) Area (m2) Length (m) Witdth (m) Height (m)

Digester 173 25 9 9 2

TOTAL * digester's cost in 2014 make use of CPI (Consumer Price Index), Source NSO (National Statistics Office)

Vehicle rent (truck) Cost

2006 360000

2007 396000

2008 435600

2009 479160

2010 527076

2011 579784

2012 637762

2013 701538

2014 771692

2015 848861*Vehicle rent is 30000/month for the 1st year and 10% incereaseevery year

Table 6.4 Construction Cost


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Salary and Wages

2006

Personnel Rate/day Benefits Total/day No. ofDays

No. ofPersonnel

Salary/yr

Laborer 325 81 406 22 2 214500

Driver 325 81 406 22 2 214500

Supervisor 406 102 508 22 1 134063

assumption 3% increases/yr

2006 2007 2008 2009 2010 2011 2012

Laborer 214500 220935 227563 234390 241422 248664 256124 Driver 214500 220935 227563 234390 241422 248664 256124

Supervisor 134063 138084 142227 146494 150889 155415 160078

TOTAL 563063 579954 597353 615274 633732 652744 672326

*25% BENEFITS INCLUDES 13TH MONTH BONUS,SSS & VACATION LEAVE

Table 6.6 Salary and wages projection


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DEPRECIATION

Qty ASSET(2006) COST ESTIMATED LIFE DEPRECIATION/YR

Biogas

Digester 1 304100 50 6082

Assets (2014) ESTIMATED LIFE

Digester 1 397319 42 9460

Table 6.7 Depreciation1 of all equipments

1 Depreciation is an accounting and finance term for the method of attributing the cost of an asset across the useful life of thof applying the matching principle as per generally accepted accounting principles.


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Repair and Maintenance

digester digester(2014) truck truck(2014) TOTAL

2006 3041 3600 6642007 15205 7200 2240

2008 15965 7560 2352

2009 16764 7938 2470

2010 17602 8335 2593

2011 18482 8752 2723

2012 19406 9189 2859

2013 20376 9649 3002

2014 21395 3973 10131 7717 3549

2015 22465 7946 10638 15434 4104

*for the first 1% of cost equipment

*for the 2nd yr = twice the first year cost

*for 3rd yr to end of life = increase od 5% annually

Table 6.8 Repair and maintenance of all equipments


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Transportation of raw material

Year km no. of trips/day no. of truck used/day Cost/L Cost/da

2006 40 5 2 31 954

2007 40 5 2 33 1011

2008 40 5 2 35 1070

2009 40 5 2 37 1128

2010 40 5 2 39 1187

2011 40 5 2 40 1245

2012 40 5 2 42 1304

2013 40 5 2 44 1363

2014 40 10 4 46 5686

2015 40 10 4 48 5920

2016 40 10 4 50 6155 *1Ldiesel/10km

Table 6.9 Cost of transportation of raw material


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Revenue

Year Sales(m3/day) Selling Price(php/L) Sales(Php/day) Sales(Php/

pre-operation 25 5344 1389505

2006 24 25 5344 1389505

2007 24 26 5664 1472582

2008 24 28 5992 1558023

2009 24 30 6321 1643465

2010 24 31 6650 1728906

2011 24 33 6978 1814348

2012 24 34 7307 1899789

2013 24 36 7636 19852312014 47 37 15928 4141345

2015 47 39 16585 4312228

Table 6.10 Projected revenue


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Inventory of Finished Goods

Year Beginning Inventory Production Sales(m3/day) Ending Inventopre-operation 0 26

2006 26 24 24 26

2007 26 24 24 26

2008 26 24 24 26

2009 26 24 24 26

2010 26 24 24 26

2011 26 24 24 26

2012 26 24 24 26

2013 26 24 24 26

2014 26 47 47 512015 51 47 47 51

*213.77 L/day bunker fuel is saved using 24 m3 in pre-heatingwater

Table 6.11 Inventory of finished goods1

1 In business management, inventory consists of a list of goods and materials held available in stock.


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Project cost

2006

Fixed Capital Expenditures

Equipment

Production Equipment

Total

Pre-Operating Expenses

Trial-run cost

Pre-operating salary and wage (design

team)

*No working capital is included in the project cost because on the fist day of operation we already have a savings

*No working capital is included in the project cost because on the fist day of operation we already have a savings woperation.

Table 6.12 Project cost


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Manufacturing Cost

Cost of Production

2006 2007 2008 2009 2010 2011 2012

Raw Materials

Manure 248000 262828 278077 293327 308577 323826 339076

Manpower

Supervisor 134063 138084 142227 146494 150889 155415 160078

Driver 214500 220935 227563 234390 241422 248664 256124

Laborer 214500 220935 227563 234390 241422 248664 256124

otal 563063 579954 597353 615274 633732 652744 672326

lectricity 17520 18396 19316 20282 21296 22360 23478

Repair andMaintenance

Digester 3041 15205 15965 16764 17602 18482 19406

Vehicle RentTruck) 3600 7200 7560 7938 8335 8752 9189

otal 6641 22405 23525 24702 25937 27233 28595

Depreciation

Digester 6082 6082 6082 6082 6082 6082 6082

ehicle renttruck) 360000 396000 435600 479160 527076 579784 637762


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otal 366082 402082 441682 485242 533158 585866 643844

icenses &nsurance

Registration 10000 10000 10000 10000 10000 10000 10000

otal 10000 10000 10000 10000 10000 10000 10000

otalManufacturing

ost 1211305 1295665 1369953 1448826 1532699 1622030 1717320

eginningnventorynished goods 0 4659 4983 5269 5572 5895 6239

nding

nventorynished goods 4659 4983 5269 5572 5895 6239 6605

OST OF SALES 1206647 1295341 1369668 1448522 1532376 1621686 1716953 5% INCREASE INLECTRICITY

Table 6.13 Cost of production

1 Cost of sales is an economical term describing the sum of all expenses that directly contribute to the generation omerchandising firm typically includes the cost of the inventory sold, warehouse and transportation costs, and other costs a

stores. It does not include costs associated with retail stores, and wages for retail employees.


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INCOME STATEMENT

2006 2007 2008 2009 2010 2011 2012

Revenue 1389505 1472582 1558023 1643465 1728906 1814348 1899789

Cost of Sales 1206647 1295341 1369668 1448522 1532376 1621686 1716953 Operating Profit 182858 177241 188356 194942 196530 192662 182836

Administrativeand Marketing 41648 41659 41670 41682 41693 1156 1168

Profit beforeIncome Tax 141210 135582 146685 153261 154837 191506 181669

Income Tax 49424 47454 51340 53641 54193 67027 63584

Profit afterincome Tax 91787 88128 95345 99620 100644 124479 118085 *35% INCOME TAX

Table 6.14 Income statement 2

1 Revenue is used worldwide to measure increase of assets or decrease of liabilities during an accounting period. Aterminology is income.

2 Income statements for companies indicate how Net Revenue (money received from the sale of products and services before

as the "top line") is transformed into Net Income (the result after all revenues and expenses have been accounted for, als

purpose of the income statement is to show managers and investors whether or not the company made or lost money during t


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Balance Sheet

2006 2007 2008 2009 2010 2011 2012

ssetsCash 185287 319138 464885 613313 761005 904254 102481

ventories

Finished Goods (EI) 4659 4983 5269 5572 5895 6239 6605

thers

Equipment

digester 304100 304100 304100 304100 304100 304100 304100

Total 304100 304100 304100 304100 304100 304100 30410

Depreciation

digester 6082 12164 18246 24328 30410 36492 42574Total 6082 12164 18246 24328 30410 36492 42574

ook Value

digester 298018 291936 285854 279772 273690 267608 261526

ther assets pre-opxpense 162193 121645 81097 40548 0

otal assets 650157 737702 837105 939205 1040590 1178100 129295

abilities

Income Tax 49424 47454 51340 53641 54193 67027 63584 Accounts payable 2105 3493 3664 3843 4031 4229 4437

otal 51529 50946 55003 57484 58224 71256 68021


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ock's holder equity 506841 506841 506841 506841 506841 506841 506841

alance,beginning 0 91787 179915 275260 374880 475524 600003

et profit (loss) 91787 88128 95345 99620 100644 124479 11808

alance, end 91787 179915 275260 374880 475524 600003 718087

otal stockholder's

quity 598628 686756 782102 881721 982365 1106844 122492

otal Liabilities andtock holders equity 650157 737702 837105 939205 1040590 1178100 129295

Table 6.15 Balance sheet 5

. Other pre-operating expense includes amortization. Accounts payable includes electricity with 5% incre

maintenance, and office supplies.

1 Asset is anything owned which can produce future economic benefit, whether in possession or by right to take possession, by a person or a group acting tog

which can be expressed in monetary terms. Asset is listed on the balance sheet. It has a normal balance of debit.2 Net Book Value is the original acquisition cost, less accumulated depreciation, depletion or amortization. Book value is therefore relevant insofar as it for

nominal capital gains (current value divided by book value), of amortized value (book value adjusted for depreciation) and of several financial ratios (e.g. pr3 A financial liability is something that is owed to another party. This is typically contrasted with an asset which is something of value that is owned. The b

liability, and capital in the form of equity:4 the shareholders' equity refers to the amount of assets that are owned by a company's shareholders. However, there is much more to this value. Stockhold

concept to grasp in terms of the accounting equation when compared to its counterparts: assets and liabilities.5 A balance sheet , in formal bookkeeping and accounting, is a statement of the book value of a business or other organization or person at a particular date,

distinct from an income statement, also known as a profit and loss account (P&L), which records revenue and expenses over a specified period of time.


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Cash Flow

2006 2007 2008 2009 2010 2011 2012

Profit 91787 88128 95345 99620 100644 124479 118085Add back:

Depreciation 6082 6082 6082 6082 6082 6082 6082

amortization of pre optgexpense 40548 40548 40548 40548 40548

Increase (decrease) in currentliabilities 51529 -582 4057 2481 740 13032 -3235

Decrease (increase) in non-cashcurrent assets -4659 -324 -286 -303 -323 -344 -367

Total cash receipt from

operations 185287 133852 145747 148427 147692 143249 120565

Less disbursements

additional equipment

Total capital expenditures

Net cash inflow (outflow) 185287 133852 145747 148427 147692 143249 120565

Cash balance, beginning 0 185287 319138 464885 613313 761005 904254

Cash balance, end 185287 319138 464885 613313 761005 904254 1024819

Table 6.16 Cash flow1.

Additional equipment includes digester which will be bough in year 2014.

1 In finance, cash flow refers to the amounts of cash being received and spent by a business during a defined period of time, sometimes tied to a specif


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Breakeven

2006 2007 2008 2009 2010 2011 2012

Cost of sales 1206647 1295341 1369668 1448522 1532376 1621686 171695

Revenue

Sales bunker (L/day) 214 214 214 214 214 214 214

Selling price 22 23 25 26 28 29 31

Break-even price 22 23 25 26 28 29 31

Revenue

Selling Price 25.00 25.00 26.49 28.03 29.57 31.11 32.64Sales bunker (L/day) 186 199 199 199 199 201 202

Break-even volumebunker (L/day) 186 199 199 199 199 201 202

Break-even volume BG(m3/day) 12 11 11 11 11 10 10

Break even no. of pigs 6000 5750 5650 5450 5400 5300 5250

Table 6.17 Breakeven analysis1

1 The breakeven point in economics is the point at which cost or expenses and income are equal - there is no net lo


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ROI

2006 2007 2008 2009 2010 2011 2012

PAIT 91787 88128 95345 99620 100644 124479 118085

i 0.175

(1+i)^n 1 1 2 2 2 3 3

78116 63832 58774 52263 44937 47301 38188

sum 503188

diff (equity and PAIT) -3,654

Interest (%) 17.5

Table 6.18 Rate of investment 1

1 In economics the rate of return on investment refers to the benefits to an investor (the profit ) relative to

investment. It is similar to the rate of profit as a measure of profitability.


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Payback Period

Equity 506841

Year 2006 2007 2008 2009 2010 2011 2012 2013 2014

91787 88128 95345 99620 100644 124479 118085 107461 44116

Profit to date 91787 179915 275260 374880 475524 600003 718087 825548 12667

Payback period 4.4 yrs

Table 6.19 Payback period 1

1 PBP is a measure of the speed with which an investment is recovered by the cash inflows it produces


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50

CONCLUSION AND RECOMMENDATION

The decrease in bunker fuel usage of Hi-grade feeds for the boiler is our major concern in

our study. In accordance with this, we have made a proposal study which considers all

factors of the farm and present technology that they are using.

After our market, technical and financial study of biogas from pig manure we came up

the following conclusions:

• Hi-grade farms could increase the value of there waste by converting it to biogas

• Biogas can be used to save bunker fuel usage by pre-heating the water entering

the boiler

• The profit on the biogas system is good because it will save amount of bunker

fuel

• We bought additional equipment on year 2014 to maximize the use of hog’s

manure since the demand in the feeds and supply in farms increases.

For further enhance the proposed study, we recommend the following:

• Removal of sulfur and carbon dioxide in the biogas which will increase its value

because it can be stored in a tank and can be sold

• Use of biogas as a substitute to produce electricity.

• Assessment of health problems. This could be done by providing proper suits to

the employees of the feed mill to prevent them from having diseases due to the

hog’s manure. The employees should also maintain cleanliness and orderliness

around so they could do their jobs accordingly without hassle and worrying about

their health.


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51

• Building a digester that will meet the demand of year 2010 at the start of the

project. The purpose of building an additional digester is to meet the demand on

the feed mill as well as the supply of hog manure. The demand and supply is

based on the information given to us by Engr. Teresita P. Madulid. At this year

the number of hogs are already doubled, resulting to a 24,000 number of hogs.

• Possibility of transferring the boiler to the farm which means that some part of the

process in the feed mill will also be transferred.


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52

APPENDIX

MATERIAL BALANCE

Number of pigs: 12,000Manure per day of pig: 3.27 kg

Basis: 1 day operationWeight manure = 39,240 kg

Pre-treatment (Dilution)- Dilution occurs in pig pens

Manure contains25% solid and 75% liquid

Wt. of solid (A) = (39,240 kg)(0.25)= 9,810 kg

Wt. of liquid (B = (39,240 kg)(0.75)= 29,430 kg

- Diluted solution must only have 10% solids

Solid Balance:9,810 = 0.10x

x = 98,100 kg

X = A + B + C

98,100 = 9,810 + 29,430 + C

C = 58,860 kg

Digestion

Biogas Computation:

- Volatile solids (VS) is 80% of total manure solids- Only 49% of VS is broken down by bacteria- 0.0613 m3 gas per kg volatile solid

C (H2O)

A B A B C

X = A + B + C

Digester

BG

X

Sludge (Y)


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53

VS = (9,810 kg)(0.8)= 7,848 kg volatile solid

Amount broken down by bacteria = (7,848 kg VS)(0.49)

= 3,845.52 kg

Volume of Biogas produced = (3,845.52 kg)(0.0613 m3 /kg)

= 235.73 m3

Y = (A – broken down by bacteria) + B + C= (9,810 – 3,845.52) + 29,430 + 58,860

= 94,254.48 kg


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54

Volume Computation of Digester

Digester contains:- Biogas- Diluted Manure- Sludge

Biogas

- Conversion of volatile solid broken down by bacteria to Biogas is estimatedlycomplete after 10 days. So a total of 9.82 m3 is produced 10 days after the manure

is fed to the digester

- Assuming the amount of biogas produced per day is uniform, 0.982 m3 biogas isproduced everyday.

VBG = (235.73 m3) / (10 days) = 23.573 m

3 /day

Diluted Manure

ρmanure = 993.3 kg/m3

ρH2O = 1000 kg/m3

Volume of diluted manure:

= 39,240 kg x 1m3___

=39.50 m

3

993.3 kg

Volume of H2O= 58,860 kg x 1m3___ = 58.86 m3

1000 kg

total volume = 98.36 m3

density of diluted manure (40% manure & 60% water):

= (0.6) (1000 kg/m3) + (0.4) (993.3 kg/m

3)

= 997.32 kg/m3

Sludge

amount of sludge = 94,254.48 kg

volume of sludge = 94,254.48 kg x __m3__

997.32 kg= 94.508 m3


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55

Computation of dimension of digester

Slurry volume= Sv 78.45m3

:=

Volume of slurry holder = Vd Sv 1.5⋅:=

with⋅ 50%a( )allowance Vd 1.177 10

5× L=

Height of slurry holder = Hs 3.05m:=

Length of slurry holder = Lh

Vd

Hs

:=

Lh 6.211m=

Width of slurry holder = Wh Lh:=

Lh 6.211m=

Volume of biogas = Vbg 23.5 1.5⋅ m3

:=

with 50% allowance

Height of biogas holder = Hbg

Vbg

Lh Wh⋅( ):=

Hbg 0.914m=


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56

Computation on savings of bunker fuel

Information regarding Hi-grade farm

Distance of Hi-grade farm to feeds 20 km

Amount of water used to feed the boiler 430 kilo/hr

Amount of bunker fuel used for boiler 50 L/hr

Assumptions

Time value of money is not considered

Minimum wage is P325 per person

Operation Schedule

Mondays through Fridays (22 days a month)

Sixteen hours work per day

Basis of computation

Transportation:A diesel engine will use 1L per 13 mDiesel price is P31/L

Bunker fuel is P23/L

Computation for final temperature upon pre-heating

Given:

23.573 m3 BG/day

Basis: 1 hourSolution:

23.573 m3 BG x 0.6 parts CH4 x 1kg CH4 x 1 kmol CH4 x 1000 mol

1 part BG 0.68 m3 CH

4 16.043 kg CH

4 1 kmol

= 1,296.497 mol CH4

∆Hrxn methane = -890.4 kJ/mol

q = -890.4 kJ/mol CH4 (1,296.497mol CH4)= -1,154,400.929 kJ

considering heat loss of 50%,

Since qmethane = qwater,

qwater = mcp∆T577,200.465 kJ = (430 kg/hr)(16hr/day)(4.186 kJ/kgK)(T-25)

T = 45.04 C

Therefore the possible temperature that the water can be heated isT = 45.04 C

Computation of the bunker fuel used

Existing process (without pre heating)

q = mcp∆T + latent heat

= (430 kg/hr)(16hr/day)(4.186 kJ/kgK)(100-25) + 88.0 kJq = 2,160,064 kJ/day

This amount of heat consumes 800 L/hr bunker fuel or 2,700.08 kJ/L.


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57

Applying to the proposed process

The heat needed for the process is 2,160,064 kJ/day. The source of heat is from the biogas

which gives 577,200.465 kJ/day and 1,582,863.535 from combusting the bunker fuel.

Amount of bunker fuel used = (1,582,863.535 kJ)/(2,700.08 kJ/L)

= 586.23 L/daySavings in amount of bunker fuel = 800 L/day – 586.23 L/day = 213.77 L/day

FINANCIAL STUDYPRE-OPERATING EXPENSES

Trial run = (62*10) + [(406+406+508) * 10= 13,823

Pre-operating salary and wages:= total compensation design team + total compensation of project consultant= 180000 + 120975

= 300975

TOTAL:

= Trial run + Pre-operating salary and wages

= 13823 + 300975

= 314798

AMORTIZATION:

= Total/5= 314798/5

= 62960

ADMINISTRATIVE AND MARKETING

For year 2006:

Office Supplies = 1200Amortization (Pre-Operation) = 62960

TOTAL:

= Office Supplies + Amortization= 1200 + 62960

For year 2007:

Office Suppplies = (12000)*(1.01) = 1212Amortization = 62960

TOTAL = 64172

PRE-OPERATING SALARIES WITH BENEFITS


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58

Project Design Team (Students)

Quantity = 4Days = 60

Salary/day = 600

Benefits = (0.25)*(600) = 150

Total Compensation = (60)*(600+150)*(4) = 180000

Project ConsultantQuantity = 1

Days = 12

Salary/day = 10000Benefits = 81

Total compensation = (12)*(10000+81)*(1) = 120975

Total Pre-operating and Fringe:

= total compensation design team + total compensation of project consultant= 180000 + 120975

= 300975

LABOR COST

Engineer/SupervisorQuantity = 1

Days = 22

Salary/day = 406

Benefits = (406)*(0.20) = 81.2 = 81Total Compensation = (22)*(406+81)*(1) = 10725

LaborerQuantity = 10

Days = 22

Salary/day = 325Benefits = 81

Total Compensation = (22)*(325+81)*(10) = 89375

Cover = 20000

Digester

Volume (m3) = 173

Area (m2) = 25

Length (m) = 9

Width (m) = 9Height (m) = 2

Cost (2006):

= total compensation of supervisor + total compensation of labourer + grand amount(material and pipings) + cover

= 10725 + 89375 + 206553 + 20000


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59

= 326653

Truck = 2000000

TOTAL = Cost (2006) + Truck = 326653 + 2000000 = 2326653

Cost (2014)= Cost (2006)/ [(CPI 2014/CPI 20006)]

= 2326653 / [(275.961/211.215)]= 426785

TOTAL = 426785

DEPRECIATION

For year 2006

BIOGAS: DigesterQuantity = 1

Cost = 326653Estimated Life = 50Depreciation (per year)

= cost / estimated life

= 326653/50= 6533

BIOGAS: Delivery Truck

Quantity = 1Cost = 2000000

Estimated Life = 10

Depreciation (per year)= cost / estimated life

= 2000000/10

= 200000

For year 2014

Digester

Quantity = 1Cost = 426785

Estimated Life = 50

Depreciation= cost / estimated life

= 426785/50

= 8536

REPAIR IN MAINTENANCE

For year 2006:

Digester


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60

= digester cost * 0.01

= (326653)*(0.01)= 3266.53

Truck

= cost delivery truck * 0.01

= (2000000)*(0.01)= 20000

TOTAL = 3266.53 + 20000 = 23266.53

BUNKER FUEL FOR BOILER

For year 2006

Consumption(L/year) = 37

Cost per liter = 23

For 2007

Cost per liter= (23)*[(CPI 2007/CPI 2007)]= 24.38

INVENTORY OF FINISHED GOOD

For year 2006

Sales (m3/day) = 24

Ending inventory= volume of biogas + volume of digester

= 23.57 + 2.0025

= 25.595Selling price (Php/L) = 23

Sales (Php/day)

= (amount of bunker fuel saved)*(selling price)= (213.77)*(23)

= 4917

Sales (Php/year)

= sales(Php/day)*52*5= (4917)*(52)*(5)

= 1278345

PROJECT COST

Fixed Capital ExpendituresEquipment:

Production Equipment = 326653

Transport Equipment = 2000000TOTAL = production cost + transport equipment

= 326653 + 2000000


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61

= 2326653

COST OF SALES

For the year 2006

Raw Materials:Manure = 16368

Manpower:

Supervisor =134063

Driver = 107250Labourer = 107250

TOTAL = summation of manpower = 348563

Electricity= 25*20*12*365*10/1000

= 21900

Repair and Maintenance:

Digester = 3267

Truck = 20000TOTAL = summation of repair and maintenance = 23267

Depreciation:

Digester = 6533Truck = 200000

TOTAL

= summation of depreciation = 6533 + 200000 = 20653Licenses and Insurance

Registration = 10000

Insurance = (production equipment)*(0.01)+(10000)= (326653)*(0.01) + (10000)

= 13267

TOTAL = summation of licenses and insurance = 10000 + 13267 = 23267

Total Manufacturing Cost

= manure + summation of manpower + electricity + summation of repair and

maintenance + summation of depreciation + summation of licenses and insurance= 16368 + 348563 + 21900 + 23267 + 20653 + 23267

= 639897

Beginning Inventory of finished good = 0Ending Inventory = total manufacturing cost / (52*5)

= 639897 / (52*5)

= 2461Cost of Sales

= total manufacturing cost + beginning inventory of finished good – ending inventory


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= 639897 + 0 – 2461

= 637435

INCOME STATEMENT

For year 2006

Revenue = 1278345Cost of Sales = 637435

Operating Profit = Revenue – Cost of Sales

= 1278345 – 637435= 640910

Administrative and Marketing = 64160

Profit Before Income Tax = operating profit – administrative and marketing

= 640910 – 64160= 576750

Income Tax = (0.35)* profit before income tax= 201862Profit after income tax = profit before income tax – income tax

= 576750 – 201862

= 374888

Biogas Digester for Hi Grade Feeds Full

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