IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v41y2012icp412-421.html
   My bibliography  Save this article

The influence of a Renewable Energy Feed in Tariff on the decision to produce biomass crops in Ireland

Author

Listed:
  • Clancy, D.
  • Breen, J.P.
  • Thorne, F.
  • Wallace, M.

Abstract

A target of 30 per cent substitution of biomass for peat in the three peat fired power stations from 2015 has been set by the Irish Government. However, a knowledge gap exists on the extent to which Irish farmers would actually choose to grow these crops. An extension of the Renewable Energy Feed in Tariff (REFIT) scheme to include the co-firing of biomass with peat in electricity generation would enable the power stations to enter into Power Purchase Agreements (PPAs). These offer a fixed price to farmers for biomass feedstock. The decision to adopt biomass is represented as a constrained problem under certainty with the objective of profit maximisation. The results showed that the price offered under a PPA has a large effect on the economic returns from biomass crops. The price that the power stations previously estimated they would be able to pay, at €46 and €48 per tonne for willow and miscanthus, respectively, was used as a starting point. At this price the number of farmers who would choose to adopt biomass production is insufficient to achieve the national co-firing target. The target could be achieved at €70 and €65 per tonne for willow and miscanthus, respectively.

Suggested Citation

  • Clancy, D. & Breen, J.P. & Thorne, F. & Wallace, M., 2012. "The influence of a Renewable Energy Feed in Tariff on the decision to produce biomass crops in Ireland," Energy Policy, Elsevier, vol. 41(C), pages 412-421.
    • Handle: RePEc:eee:enepol:v:41:y:2012:i:c:p:412-421
    DOI: 10.1016/j.enpol.2011.11.001
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421511008780
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2011.11.001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Sherrington, Chris & Moran, Dominic, 2010. "Modelling farmer uptake of perennial energy crops in the UK," Energy Policy, Elsevier, vol. 38(7), pages 3567-3578, July.
    2. Sherrington, Chris & Bartley, Justin & Moran, Dominic, 2008. "Farm-level constraints on the domestic supply of perennial energy crops in the UK," Energy Policy, Elsevier, vol. 36(7), pages 2504-2512, July.
    3. Burton C. English & Cameron Short & Earl O. Heady, 1981. "The Economic Feasibility of Crop Residues as Auxiliary Fuel in Coal-Fired Power Plants," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 63(4), pages 636-644.
    4. Howitt, Richard E. & Mean, Phillippe, 1983. "A Positive Approach to Microeconomic Programming Models," Working Papers 225710, University of California, Davis, Department of Agricultural and Resource Economics.
    5. Bruno Henry Frahan & Jeroen Buysse & Philippe Polomé & Bruno Fernagut & Olivier Harmignie & Ludwig Lauwers & Guido Huylenbroeck & Jef Meensel, 2007. "Positive Mathematical Programming for Agricultural and Environmental Policy Analysis: Review and Practice," International Series in Operations Research & Management Science, in: Andres Weintraub & Carlos Romero & Trond Bjørndal & Rafael Epstein & Jaime Miranda (ed.), Handbook Of Operations Research In Natural Resources, chapter 0, pages 129-154, Springer.
    6. English, Burton C. & Jensen, Kimberly L. & Menard, R. Jamey & Walsh, Marie E. & Brandt, Craig & Van Dyke, Jim & Hadley, Stanton, 2007. "Economic Impacts of Carbon Taxes and Biomass Feedstock Usage in Southeastern United States Coal Utilities," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 39(1), pages 1-17, April.
    7. Darragh Clancy & James Breen & A.M Butler & Fiona Thorne & M. Wallace, 2008. "A Discounted Cash Flow Analysis of Financial Returns from Biomass Crops in Ireland," Working Papers 0808, Rural Economy and Development Programme,Teagasc.
    8. Styles, David & Jones, Michael B., 2007. "Current and future financial competitiveness of electricity and heat from energy crops: A case study from Ireland," Energy Policy, Elsevier, vol. 35(8), pages 4355-4367, August.
    9. Emily Wiemers & Jasmina Behan, 2004. "Farm Forestry Investment in Ireland Under Uncertainty," The Economic and Social Review, Economic and Social Studies, vol. 35(3), pages 305-320.
    10. Amir K. Abadi Ghadim & David J. Pannell, 1999. "A conceptual framework of adoption of an agricultural innovation," Agricultural Economics, International Association of Agricultural Economists, vol. 21(2), pages 145-154, October.
    11. John FitzGerald & Justin Johnston, 1999. "The Economics of Biomass in Ireland," Papers WP112, Economic and Social Research Institute (ESRI).
    12. Bocquého, G. & Jacquet, F., 2010. "The adoption of switchgrass and miscanthus by farmers: Impact of liquidity constraints and risk preferences," Energy Policy, Elsevier, vol. 38(5), pages 2598-2607, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Witzel, Carl-Philipp & Finger, Robert, 2016. "Economic evaluation of Miscanthus production – A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 681-696.
    2. Sutherland, Lee-Ann & Peter, Sarah & Zagata, Lukas, 2015. "Conceptualising multi-regime interactions: The role of the agriculture sector in renewable energy transitions," Research Policy, Elsevier, vol. 44(8), pages 1543-1554.
    3. P. Mathiou & Stelios Rozakis & Rafal Pudelko & A. Faber, 2012. "Economic and spatial modelling for estimating supply of perennial crops’ biomass in Poland," Working Papers 2012-2, Agricultural University of Athens, Department Of Agricultural Economics.
    4. P. Mathiou & Stelios Rozakis & Rafal Pudelko & A. Faber & A. Petsakos, 2014. "Utility maximising supply response: the case of perennial biomass plantations in Poland," Working Papers 2014-3, Agricultural University of Athens, Department Of Agricultural Economics.
    5. Devlin, Ger & Talbot, Bruce, 2014. "Deriving cooperative biomass resource transport supply strategies in meeting co-firing energy regulations: A case for peat and wood fibre in Ireland," Applied Energy, Elsevier, vol. 113(C), pages 1700-1709.
    6. de Oliveira, Jofran Luiz & da Silva, Jadir Nogueira & Graciosa Pereira, Emanuele & Oliveira Filho, Delly & Rizzo Carvalho, Daniel, 2013. "Characterization and mapping of waste from coffee and eucalyptus production in Brazil for thermochemical conversion of energy via gasification," Renewable and Sustainable Energy Reviews, Elsevier, vol. 21(C), pages 52-58.
    7. Ramli, Makbul A.M. & Twaha, Ssennoga, 2015. "Analysis of renewable energy feed-in tariffs in selected regions of the globe: Lessons for Saudi Arabia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 45(C), pages 649-661.
    8. Barbosa, Luciana & Ferrão, Paulo & Rodrigues, Artur & Sardinha, Alberto, 2018. "Feed-in tariffs with minimum price guarantees and regulatory uncertainty," Energy Economics, Elsevier, vol. 72(C), pages 517-541.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Vyn, Richard J. & Virani, Tasneem & Deen, Bill, 2012. "Examining the economic feasibility of miscanthus in Ontario: An application to the greenhouse industry," Energy Policy, Elsevier, vol. 50(C), pages 669-676.
    2. Witzel, Carl-Philipp & Finger, Robert, 2016. "Economic evaluation of Miscanthus production – A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 681-696.
    3. Ge, Jiaqi & Sutherland, Lee-Ann & Polhill, J. Gary & Matthews, Keith & Miller, Dave & Wardell-Johnson, Douglas, 2017. "Exploring factors affecting on-farm renewable energy adoption in Scotland using large-scale microdata," Energy Policy, Elsevier, vol. 107(C), pages 548-560.
    4. Adams, P.W.R. & Lindegaard, K., 2016. "A critical appraisal of the effectiveness of UK perennial energy crops policy since 1990," Renewable and Sustainable Energy Reviews, Elsevier, vol. 55(C), pages 188-202.
    5. P. Mathiou & Stelios Rozakis & Rafal Pudelko & A. Faber & A. Petsakos, 2014. "Utility maximising supply response: the case of perennial biomass plantations in Poland," Working Papers 2014-3, Agricultural University of Athens, Department Of Agricultural Economics.
    6. Jensen, Kimberly L. & English, Burton C. & Clark, Christopher D. & Menard, R. Jamey, 2011. "Preferences for Marketing Arrangements by Potential Switchgrass Growers," Journal of Cooperatives, NCERA-210, vol. 25, pages 1-28.
    7. Tranter, R.B. & Swinbank, A. & Jones, P.J. & Banks, C.J. & Salter, A.M., 2011. "Assessing the potential for the uptake of on-farm anaerobic digestion for energy production in England," Energy Policy, Elsevier, vol. 39(5), pages 2424-2430, May.
    8. Lynes, Melissa K. & Bergtold, Jason S. & Williams, Jeffery R. & Fewell, Jason E., 2016. "Willingness of Kansas farm managers to produce alternative cellulosic biofuel feedstocks: An analysis of adoption and initial acreage allocation," Energy Economics, Elsevier, vol. 59(C), pages 336-348.
    9. Tate, Graham & Mbzibain, Aurelian & Ali, Shaukat, 2012. "A comparison of the drivers influencing farmers' adoption of enterprises associated with renewable energy," Energy Policy, Elsevier, vol. 49(C), pages 400-409.
    10. Marc Baudry & Edouard Civel & Camille Tévenart, 2023. "Land allocation and the adoption of innovative practices in agriculture: a real option modelling of the underlying hidden costs," Working Papers hal-04159839, HAL.
    11. FitzGerald, John, 2011. "A Review of Irish Energy Policy," Research Series, Economic and Social Research Institute (ESRI), number RS21.
    12. Helliwell, Richard, 2018. "Where did the marginal land go? Farmers perspectives on marginal land and its implications for adoption of dedicated energy crops," Energy Policy, Elsevier, vol. 117(C), pages 166-172.
    13. Wang, Zhanwu & Wang, Zhenfeng & Tahir, Nadeem & Wang, Heng & Li, Jin & Xu, Guangyin, 2020. "Study of synergetic development in straw power supply chain: Straw price and government subsidy as incentive," Energy Policy, Elsevier, vol. 146(C).
    14. Glithero, N. J. & Ramsden, S. J. & Wilson, P., 2013. "Potential for Second Generation Biofuel Feedstock from English Arable Farms," 87th Annual Conference, April 8-10, 2013, Warwick University, Coventry, UK 158858, Agricultural Economics Society.
    15. Glithero, N.J. & Wilson, P. & Ramsden, S.J., 2015. "Optimal combinable and dedicated energy crop scenarios for marginal land," Applied Energy, Elsevier, vol. 147(C), pages 82-91.
    16. Calliope Panoutsou & Efthymia Alexopoulou, 2020. "Costs and Profitability of Crops for Bioeconomy in the EU," Energies, MDPI, vol. 13(5), pages 1-27, March.
    17. Glithero, N.J. & Ramsden, S.J. & Wilson, P., 2013. "Barriers and incentives to the production of bioethanol from cereal straw: A farm business perspective," Energy Policy, Elsevier, vol. 59(C), pages 161-171.
    18. Burli, Pralhad & Lal, Pankaj & Wolde, Bernabas & Jose, Shibu & Bardhan, Sougata, 2019. "Factors affecting willingness to cultivate switchgrass: Evidence from a farmer survey in Missouri," Energy Economics, Elsevier, vol. 80(C), pages 20-29.
    19. Barnes, A.P. & McMillan, J. & Sutherland, L.-A. & Hopkins, J. & Thomson, S.G., 2022. "Farmer intentional pathways for net zero carbon: Exploring the lock-in effects of forestry and renewables," Land Use Policy, Elsevier, vol. 112(C).
    20. Glithero, Neryssa J. & Wilson, Paul & Ramsden, Stephen J., 2013. "Prospects for arable farm uptake of Short Rotation Coppice willow and miscanthus in England," Applied Energy, Elsevier, vol. 107(C), pages 209-218.

    More about this item

    Keywords

    Biomass; Co-firing; REFIT;
    All these keywords.

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:41:y:2012:i:c:p:412-421. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.