Straw is an example of a by-product with low alternative
value. The extra capital costs needed for conversion of straw
require a low feedstock cost to obtain a reasonable return to
invested capital. Another by-product from agriculture is animal
manure. In many cases, animal manure represents an
environmental problem and has to be treated in some ways
(aerobe or anaerobe) before it can be spread on the fields. If
the fixed costs are considered as environmental investments
and the energy part (biogas or compost heat) has only to
cover the marginal investments, biogas or compost heat generated
from treatment of manure might be competitive (Lunnan,
1988). Considerable research has been done in Europe
on biogas, but there are only a few commercial installations.
The biogas plants are basically environmental investments,
the fixed costs have to be matched to the environmental part
of the project and the energy produced is a by-product. The
future supply of energy from biogas plants, therefore, depends
on the extent to which animal manure and other organic
waste pose an environmental problem.