# Sustainable Italian Cities: The Added Value of Biomethane from Organic Waste
## 4 Results
### Profitability Analysis of Biomethane Plants--Baseline Scenario  
The profitability of the biomethane plants powered by OFMSW was confirmed in seven of out of the ten cases proposed in Figure 3. The NPV was positive for the 200 \(\rm m^{3}\)/h plant and greater than that of the 150 m\({}^{3}\)/h plant proposed in the literature. However, this result depended on the specific input data used (see Section 2). Although the NPV measured the plant profitability, the index was not able to consider different size values. For this reason, considering the different plant capacities examined in this work, the ratio of NPV/size was useful for comparison. NPV/size was coherent with NPV, and was obtained by dividing this indicator with the plant size; thus, all of the case studies were homogeneous, because they were expressed in terms of \(\epsilon\) for m\({}^{3}\)/h. The profits obtained were extremely consistent, varying from 2040 \(\epsilon\) for m\({}^{3}\)/h (200 m\({}^{3}\)/h plant), to 15,884 \(\epsilon\) for m\({}^{3}\)/h (500 m\({}^{3}\)/h plant). This was determined by two main variables, namely: (i) economies of scale and (ii) the structure of subsidies, which did not differentiate between plant size. The use of OFMSW as a substrate determined the profitability of the biomethane plants because of the effect of double counting, in which the value of the corrective coefficient (c\({}_{\text{c}}\)) is equal to 2. Subsides played a key role in the discounted cash inflows (approximately 39%; Figure 4). As the MSW treatment is a paid service, its value exceeded the necessary costs for pre-treatment (equal to 21 \(\epsilon\)/ton; Table 4). The use of organic waste provided additional income to the biogas-biomethane plants, via a tariff paid for the treatment of waste; in fact, the tariff payment for the OFMSW treatment was paid to the plant owner by the local municipality [88; 89]. The contribution of this net revenue was significant, representing approximately one quarter of the total (23%). Of course, willingness to pay for separate waste collection depends on both economic and non-economic motivations [90]. The sale of biomethane influenced about one fifth of the total (20%). Regarding the discounted cash outflows, the percentage weight of the investment costs was significantly lower than that of the operative costs (15%). The investment costs consisted of both a loan capital share and a loan interest share, because it was hypothesized that these costs would be covered by third party funds. The costs were subdivided for a single phase of biomethane production as follows: (i) AD, (ii) upgrading, and (iii) compression and distribution. The following operative costs were analyzed: substrate, labor, transport, maintenance and overheads, depreciation for mechanical and electrical devices, electricity consumption, and insurance. Also, some items were specific to biogas production and upgrading. Among these, the maintenance and overhead costs (in particular during biogas production) were the most relevant (41%). The average values of the costs linked with several plant sizes are reported in Figure 4, with a null value for the substrate (Table 4). Starting with these items, the level cost for the production of 1 Nm\({}^{3}\) of biomethane was obtained as the ratio between the sum of the discounted cash outflows and the biomethane production. Its value varied from 0.63 \(\epsilon\)/m\({}^{3}\) (500 m\({}^{3}\)/h plant) to 1.16 \(\epsilon\)/m\({}^{3}\) (50 m\({}^{3}\)/h plant). These values were greater than the values registered for the production of natural gas; for this reason, it would be necessary to apply a subsidy. This renewable resource is better able to tackle climate change than fossil fuels [76; 91]. Figure 3: Profitability analysis of biomethane plants (thousand \(\epsilon\))—baseline scenario. NPV—net present value. As payback time (PBT) is an inappropriate indicator for measuring the economic feasibility of a project, this work used discounted payback time (DPBT), which considers the real value of money.