Economic feasibility and determinants of biogas technology adoption: Evidence from Bangladesh

• Published in: Renewable & sustainable energy reviews 2020-05, Vol.123, p.109766, Article 109766
• Main Authors: Sarker, Swati Anindita, Wang, Shouyang, Adnan, K.M. Mehedi, Sattar, M. Nahid
• Format: Article
• Language: English
• Subjects: Bangladesh; Benefit-cost analysis (BCR); Biogas plant; Determinants; Logit regression; Sensitivity analysis
• ISSN: 1364-0321; 1879-0690
• DOI: 10.1016/j.rser.2020.109766

Biogas technology can play a significant role in reducing dependency on fossil fuels, and in increasing of rural energy access. This study assesses the profitability of biogas plants and examines the determining factors affecting the adoption of biogas technology by rural households in Bangladesh. Data were extracted from primary sources through a structured questionnaire in four districts in Bangladesh. Stratified random sampling involved 140 biogas adopters with a wide range of biogas plant sizes (2 m3–120 m3) along with 140 non-adopters. The research used the benefit-cost ratio for profitability estimation. The study employed a logit model for analyzing the key factors influencing the adoption of biogas technology. The outcomes revealed that the benefit-cost ratio is higher than 1, and 6 m3 is the most economically viable plant among all sizes. Sensitivity analysis helped the research to check the stability of a biogas plant in different economic conditions (10% increase in cost or decrease in profit and constant changes in interest rate) and discovered that all plant sizes were economically stable. Logit regression analysis showed that factors including age, livestock possession, extension service, education, family size, income, and access to credit are influencing the decision of such adoption. In addition to that, economic, technical, ecological and societal reasons were measured for establishing biogas plants. Therefore, this study recommends a change in government approaches and development of extension services, better promotions, adult education and credit facilities to adopt biogas technology in Bangladesh. [Display omitted] •Economic analysis of different biogas plants is investigated in Bangladesh.•Biogas adoption is economically feasible in rural areas for each plant size.•Logit model is used to identify the determinants of biogas technology adoption.•Socio-economic factors play a significant role in the biogas adoption process.•Polices to enhance biogas technology adoption.