Maximizing ROI in Biogas Projects: Design and Construction Strategies for Developers and Investors

By Kingsbury Companies LLC

As the biogas industry evolves in North and South America, all professionals and vendors are working to identify the best solutions that reduce both capital and operating expenses, and to determine the best markets and government incentives to maximize return on investment.

Last year, during the RNG Forum 2025, there was a consensus in the Quebec market that more government incentives, like those implemented in the US, were needed. But Canadian technology providers were also discussing the challenge of entering the US market amid tariffs and heightened political tension that seemed to require business creativity. Since then, the government programs designed to incentivize the biogas industry in the US have been eliminated, leaving North America wondering what’s the next step. 

While Policy seems to require re-adjustment every 4-5 years, stakeholders are experiencing projects that are over budget and delayed on their COD, directly impacting project ROI.  

To address this threat, the intent of this article is to identify and propose construction management techniques for implementation, outline items to pay special attention to when designing and constructing a biogas project and focus on what maximizes efficiency and profitability. 

In the next few lines, we will discuss designing, technology selection, the MUST-haves during Design and Construction, and finally, the Earned Value Method for tracking success.

Design 

As a member of the construction team at Kingsbury, we are often asked to conduct early constructability evaluations for projects, not just in the biogas industry. As a company in business since 1978 in the heavy civil industry, we have experience with a wide range of issues during design and construction, including repairing and retrofitting several biogas and wastewater plants in the Northeast and Midwest. When we are asked during pre-construction to evaluate a design, we are always happy to do so. 

First and foremost, learn what lies underground. Farm or landfill sites can have extremely complex soil conditions that can result in hundreds or millions of dollars in change orders due to differences in site conditions during construction. Engage a geotechnical engineer to conduct borings at your more critical locations: digester, buildings, CHPs, biogas upgraders, desulfurization systems, ammonia removal tanks, among others. Heavy dewatering, sheet piling, and micropiles or concrete/gravel pier stabilization would significantly increase the project cost and should influence the decision between a buried or an above-ground tank. Also, obtaining information on whether the soils can be reused as structural fill can create immense savings for the project.

1. Dairy farm bedding management – Farmers love their cows and want the best for them, so they have very specific requirements for the type of bedding they prefer and for their experience. Evaluate sand separation carefully and ensure there is a realistic plan for the increase in OPEX upfront, during the economic study, that is proportional to the amount of solids the sand separation system will allow to be processed. Be sure there is an OPEX plan for how the digester will need to be cleaned or how the pumps will need to be serviced. An efficient sand separation system cost and a digester cleaning plan upfront will reduce the risk of an increase in OPEX. 

Minimize your heat loss and maximize your heat transfer. Investing in a good heat management study that focuses on reducing heat losses and reusing the heat generated by the system will reduce the consumption of external fuel, extend the life of your boiler system, and  

2. Choose and control a system that you have control over. Control systems are complex programming sequences that incorporate all the instruments and evaluate the health of your facilities, so the operator can decide what to do to maximize efficiency. Facilities are dynamic, so owners need rapid response from the integrator. Bacteria and cows don’t take free days, so choosing an EPC or control vendor that is willing to partner and understand the issue of programming can cost thousands of dollars. Environmental compliance is crucial, but the developer should ensure that they can change integrators in the future if needed, without any contractual obligation, as the ownership of the programming has already been discussed as belonging to the owner. 

3. 3D BIM integration is growing and is vertically integrated from design through construction. 3D models can be checked during the submittal process and then applied to machine control and survey equipment. Don’t spend money on bolt details; concentrate on grades and good distances for above-ground process piping. An accurate BIM model of the equipment will allow contractors to price more accurately and will reduce future cost increases. This accuracy will also be reflected during construction, improving construction time. 

4. Pre-construction estimates must be accurate. This applies to gas generation calculations, equipment costs, and construction and interconnection costs. Review pricing as you progress through the design; don’t wait until the last minute to realize your project will be over budget. 

Construction

Executing a project can be a very challenging task that requires not only technical expertise but also an understanding that relationships are the key to success and that all team members are aligned on the goal of building a safe, high-quality project on budget and on time.

1. Contract type. Construction contracts can be executed in several ways. The type of contract will be determined by the amount of risk the stakeholder is willing to take. For this article, I would like to recommend contracts that enforce collaboration among all parties to the contract. I would recommend working with a company with the experience of Kingsbury Companies and using a guaranteed maximum price contract structure in which the final project cost would be the overall cost plus an agreed fee until the GMP is reached, and then a reduced margin if the cost goes over. 

2. Find the right Project Management, the one that keeps the team working together, motivated to completion, and holds everyone accountable while maintaining respectful expectations. These projects are complex and require safety, document management, accurate schedule management, handling difficult discussions, and, above all, keeping the team focused on the task ahead, with reporting to stakeholders on how their investment funds are being used so they can compare it to their projections. 

3. Good construction meetings. What is the meeting objective? Before getting into a meeting, the team should ask what they want to get from it. Is it just informational? At Kingsbury, we focus on all our meetings by starting with Safety, reviewing our action items from the last meeting, checking whether we are on schedule, reviewing the status of quality control information, and finishing with open discussions. The right meeting is when all items are discussed and everyone gets what they need in a 30-minute period. 

4. CPM Scheduling is an outline of several activities with planned durations that are linked by relationships to create the project completion date. Sound scheduling techniques help set the right expectations for the team and stakeholders. Schedules that slip are the result of poor preplanning, a force majeure condition, or a lack of performance. The right CPM Schedule should have a work-based structure to allow a time-impact analysis for each delay, helping all parties understand the impact of that delay on the project without question. Change order requests should be provided with the correct schedule information to show the impact of the delay on the overall schedule and to determine whether the delay is concurrent or in addition to the original contract days outlined for the project. 

5. Accurate equipment delivery dates are crucial, as they often change and depend on overseas transportation, trucking companies, country and state fees and permits. During pre-construction, these dates should be realistic, as additional shipments will incur heavy costs for cranes, riggers, and storage. These delivery dates should be outlined in the CPM schedule, and the trucking route should be analyzed in advance during project execution. 

Easy analysis of project execution health to make decisions early in the process to meet deadlines. Earlier in this article, I mentioned the need for stakeholders to know whether their investment meets their financial projections or pro forma. During project execution, the construction team’s responsibility is to keep stakeholders informed and provide feedback on the project’s final cost and whether it is on time to start generating revenue. For a construction company or technology provider, it is extremely important to understand how payments and costs relate to each other to avoid overbilling or underbilling.

Under this assumption, I would recommend using a very common technique in project management, called the Earned Value method, which integrates scope, schedule, and cost metrics to assess project performance and progress at a given point in time.

Earn Value Method

For a biogas plant project where civil works, mechanical systems (digesters, piping, gas storage), electrical installations, and process equipment must be carefully coordinated EVM allows the project team to analyze and compare:

• Planned Value (PV): The budgeted cost of work scheduled for completion at a given time.
• Earned Value (EV): The budgeted cost of the work completed.
• Actual Cost (AC): The actual cost incurred for the completed work.

By analyzing these metrics, the project team can assess cost and schedule performance using indicators such as the Cost Performance Index (CPI) and the Schedule Performance Index (SPI). This enables early identification of overruns or delays in critical components such as digester installation, gas upgrading systems, or interconnection works.

The results are presented in a graph, allowing the project team and stakeholders to quickly assess whether the project is over budget or behind schedule.

In the graph above, the project appears to be behind schedule and over budget. 

In this graph, the project appears to be ahead of schedule, but it is over budget. 

As you can see, formatting the date under the Earned Value Method allows for a quick review of the project’s health

Conclusion 

Professionals in the biogas sector will always be exposed to changes in policy and the market. Still, when it comes to project efficiency and execution structure, there is more to do, and the more attention we pay to these topics, the better we become.