Economic analysis of the German regulation for electrical generation projects from biogas applying the theory of real options

José Balibrea-Iniesta, Carlos Rodríguez-Monroy and Yilsy María Núñez-Guerrero

Energy, 2021, vol. 231, issue C

Abstract: In this research, four electricity generation projects from biogas are analyzed. The present value of public aid granted by the German Administration in the four projects is calculated by applying real options theory. It is determined that the public aids are greater for the plants of 500 kW of installed capacity, resulting in values of 33.418 euros per megawatt-hour in biogas plants from landfills and 22.334 euros per megawatt-hour in biogas plants from the treatment of sewage. The public aid for the two 5 MW biogas plants from landfills and biogas from wastewater treatment turned out to be equal with a value of 17.222 euros per megawatt-hour. This study has relied on a new methodology to calculate the value of government incentives for electricity generation projects from biogas in Germany, applying real options. It shows the higher cost for the German Administration of biogas plants with lower installed capacity (500 kW), compared to biogas plants with higher installed capacity (5 MW), as a result of granted governmental incentives for electricity generation.

Keywords: Renewable energy; Biogas; Project evaluation; Real options; Germany (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S036054422101224X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:231:y:2021:i:c:s036054422101224x

DOI: 10.1016/j.energy.2021.120976

Access Statistics for this article

Energy is currently edited by Henrik Lund and Mark J. Kaiser

More articles in Energy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().