The Critical Role of Economies of Scale: A Techno‐Economic Assessment of Small‐ Versus Large‐Scale Biogas Upgrading in Rural Tanzania

Abstract

ABSTRACT Access to clean and affordable energy remains a major challenge in rural Tanzania, where dependence on traditional biomass continues to drive deforestation, indoor air pollution, and energy insecurity. Biogas offers a promising alternative, yet limited evidence exists on the technical and economic feasibility of decentralized upgrading systems in rural settings. Building on the experimentally implemented and validated pilot‐scale waste‐to‐fuel system, this study undertakes a techno‐economic assessment of small‐ and community‐scale biogas upgrading under rural Tanzanian conditions. The systems were designed to upgrade raw biogas into usable cooking fuel by removing hydrogen sulfide (H 2 S) and carbon dioxide (CO 2 ) using low‐cost purification methods powered by off‐grid solar energy. Rusted steel wool achieved effective H 2 S removal (< 2 ppm), while calcium hydroxide (Ca(OH) 2 ) achieved 62% CO 2 removal efficiency. Economic performance was evaluated using net present value (NPV) and Levelized Cost of Energy (LCOE). The small‐scale system (100 L/day) achieved an LCOE of TZS 1572/kWh, indicating poor economic viability, whereas the modeled large‐scale system (6500 L/day) achieved an LCOE of TZS 241/kWh, demonstrating substantial economies of scale. Sensitivity analysis identified raw biogas production and system lifespan as the dominant economic drivers. The findings show that while small‐scale upgrading systems are technically feasible, economic sustainability depends strongly on production scale, operational stability, and long‐term system durability. Community‐scale deployment, therefore, represents a more viable pathway for decentralized biogas upgrading in rural Tanzania.