Anaerobic Digestion of Feedstock Grown on Marginal Land: Break-Even Electricity Prices

Yakubu Abdul-Salam, Melf-Hinrich Ehlers and Jelte Harnmeijer
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Yakubu Abdul-Salam: The James Hutton Institute, Craigiebuckler, Aberdeen AB15 8QH, UK
Melf-Hinrich Ehlers: Section of International Agricultural Policy and Environmental Governance, Faculty of Organic Agricultural Sciences, University of Kassel, 37213 Witzenhausen, Germany
Jelte Harnmeijer: The James Hutton Institute, Craigiebuckler, Aberdeen AB15 8QH, UK

Energies, 2017, vol. 10, issue 9, 1-21

Abstract: Marginal farm land is land characterised by low food, feed and fodder crop productivity due to soil and environmental limitations. Such land may however be utilised for bio-energy crop production. We investigate the economic viability of small scale combined heat and power anaerobic digestion (CHP AD) projects based on feedstock from farm waste and bio-energy crops grown on a representative temperate latitude marginal farm land in the UK. Using a realistic set of five project feedstock-mix scenarios, and considering standard technology and current market and policy regimes, we deploy a stochastic framework to assess prices of electricity required for these projects to break-even and conduct sensitivity analyses of key project parameters. Accounting for the current market prices and policy tariffs for heat, we find that critical electricity sale prices of about 17.46 p/kWh to 27.12 p/kWh are needed for the projects to break even. These prices are well above the current combined feed-in-tariff support and market prices for electricity over the past years in the UK. We conclude that the use of marginal land to generate power for export using small-scale CHP AD in the UK and the wider temperate latitude countries is unviable, if energy and farming policy regimes do not provide substantial support.

Keywords: bio-energy; anaerobic digestion; marginal land; prices; electricity; policy (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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