Flexible Load of Existing Biogas Plants: A Viable Option to Reduce Environmental Externalities and to Provide Demand driven Electricity?

David Schäfer, Wolfgang Britz and Till Kuhn

German Journal of Agricultural Economics, 2017, vol. 66, issue 2

Abstract: The expansion of fluctuating renewable energies such as wind and solar increases the need for electricity produced on demand to stabilize the grid. Electricity from existing biogas plants in Germany allows flexible energy output and is increasingly marketed on demand requiring technical modifications such as increased gas storage and engine capacity. In this study we investigate an alternative approach in which a reduced fermenter load provides additional gas storage and engine capacity with no additional investment. This reduces input use and digestate production, thereby decreasing environmental externalities in regions with high biogas and animal densities. We quantify the required increase in subsidies for two dairy farms in Germany to switch from guaranteed subsidies for continuous electricity production to different levels of flexible load. The farms are assumed to have invested in a biogas plant under the Renewable Energy Sources Act of 2009 and 2012. We simulate the reduced biomass demand and its implications on farm management with a focus on fermenter input composition. Thereto, we develop a bio-economic model of a biogas plant and integrate it in the dynamic single-farm model FarmDyn. We find that provision of electricity on demand reduces especially the demand for maize silage, a feedstock with high negative environmental externalities. Even a moderate input reduction of 30% requires a subsidy increase of 1.8 to 3.2 cents/kWh contingent on the initial RES. We conclude that despite the approach being able to provide electricity on demand and to reduce negative environmental impacts, a widespread application seems unrealistic due to high additional subsidies.

Keywords: Environmental Economics and Policy; Farm Management; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:gjagec:303543

DOI: 10.22004/ag.econ.303543

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