IDEAS home Printed from https://ideas.repec.org/a/eee/renene/v130y2019icp867-880.html
   My bibliography  Save this article

Incentivising bioenergy production: Economic and environmental insights from a regional optimization methodology

Author

Listed:
  • Yılmaz Balaman, Şebnem
  • Scott, James
  • Matopoulos, Aristides
  • Wright, Daniel G.

Abstract

In conjunction with the European Union (EU) targets, the United Kingdom (UK) Government has introduced a range of mechanisms to foster the development and deployment of low carbon energy technologies and markets. This study focuses on the three main financial incentive schemes to promote renewable energy sector in the UK for electricity, heat and fuel production from renewables, namely feed-in tariff (FiT), Renewable Heat Incentive (RHI) and Renewables Obligation Certificate (RoC), considering the fact that optimal policy design depends on effective analyses of the impacts of incentives on the performance of renewable energy systems. The effects of potential changes in these incentive schemes on the economic and environmental performance of bioenergy sector are investigated using an analytical methodology. The methodology integrates fuzzy decision making and multi objective mathematical modelling in the same framework to capture uncertainties in the system parameters as well as economic and environmental sustainability aspects. Computational experiments are performed on bioenergy production using the entire West Midlands Region in the UK as case study region. The results reveal that the changes in incentive policies have a significant impact on the profitability of the supply chain, whereas environmental performance of the supply chain in terms of total GHG emissions is the least affected performance indicator by the changes in the incentive policies.

Suggested Citation

  • Yılmaz Balaman, Şebnem & Scott, James & Matopoulos, Aristides & Wright, Daniel G., 2019. "Incentivising bioenergy production: Economic and environmental insights from a regional optimization methodology," Renewable Energy, Elsevier, vol. 130(C), pages 867-880.
    • Handle: RePEc:eee:renene:v:130:y:2019:i:c:p:867-880
    DOI: 10.1016/j.renene.2018.06.083
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0960148118307353
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.renene.2018.06.083?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. Connor, Peter M. & Xie, Lei & Lowes, Richard & Britton, Jessica & Richardson, Thomas, 2015. "The development of renewable heating policy in the United Kingdom," Renewable Energy, Elsevier, vol. 75(C), pages 733-744.
    2. Allan, Grant & Gilmartin, Michelle & McGregor, Peter & Swales, Kim, 2011. "Levelised costs of Wave and Tidal energy in the UK: Cost competitiveness and the importance of "banded" Renewables Obligation Certificates," Energy Policy, Elsevier, vol. 39(1), pages 23-39, January.
    3. Gürkan, Gül & Langestraat, Romeo, 2014. "Modeling and analysis of renewable energy obligations and technology bandings in the UK electricity market," Energy Policy, Elsevier, vol. 70(C), pages 85-95.
    4. Mola-Yudego, Blas & Pelkonen, Paavo, 2008. "The effects of policy incentives in the adoption of willow short rotation coppice for bioenergy in Sweden," Energy Policy, Elsevier, vol. 36(8), pages 3052-3058, August.
    5. Leete, Simeon & Xu, Jingjing & Wheeler, David, 2013. "Investment barriers and incentives for marine renewable energy in the UK: An analysis of investor preferences," Energy Policy, Elsevier, vol. 60(C), pages 866-875.
    6. Ritter, Matthias & Deckert, Lars, 2017. "Site assessment, turbine selection, and local feed-in tariffs through the wind energy index," Applied Energy, Elsevier, vol. 185(P2), pages 1087-1099.
    7. Chinese, D. & Patrizio, P. & Nardin, G., 2014. "Effects of changes in Italian bioenergy promotion schemes for agricultural biogas projects: Insights from a regional optimization model," Energy Policy, Elsevier, vol. 75(C), pages 189-205.
    8. Ringel, Marc, 2006. "Fostering the use of renewable energies in the European Union: the race between feed-in tariffs and green certificates," Renewable Energy, Elsevier, vol. 31(1), pages 1-17.
    9. Snape, J.R. & Boait, P.J. & Rylatt, R.M., 2015. "Will domestic consumers take up the renewable heat incentive? An analysis of the barriers to heat pump adoption using agent-based modelling," Energy Policy, Elsevier, vol. 85(C), pages 32-38.
    10. Esmaili, Masoud & Amjady, Nima & Shayanfar, Heidar Ali, 2011. "Multi-objective congestion management by modified augmented [epsilon]-constraint method," Applied Energy, Elsevier, vol. 88(3), pages 755-766, March.
    11. Mr. Luc Eyraud & Ms. Changchang Zhang & Mr. Abdoul A Wane & Mr. Benedict J. Clements, 2011. "Who's Going Green and Why? Trends and Determinants of Green Investment," IMF Working Papers 2011/296, International Monetary Fund.
    12. Klessmann, Corinna & Rathmann, Max & de Jager, David & Gazzo, Alexis & Resch, Gustav & Busch, Sebastian & Ragwitz, Mario, 2013. "Policy options for reducing the costs of reaching the European renewables target," Renewable Energy, Elsevier, vol. 57(C), pages 390-403.
    13. El-Karmi, Fawwaz Z. & Abu-Shikhah, Nazih M., 2013. "The role of financial incentives in promoting renewable energy in Jordan," Renewable Energy, Elsevier, vol. 57(C), pages 620-625.
    14. Uslu, Ayla & Faaij, André P.C. & Bergman, P.C.A., 2008. "Pre-treatment technologies, and their effect on international bioenergy supply chain logistics. Techno-economic evaluation of torrefaction, fast pyrolysis and pelletisation," Energy, Elsevier, vol. 33(8), pages 1206-1223.
    15. Ibanez-Lopez, A.S. & Martinez-Val, J.M. & Moratilla-Soria, B.Y., 2017. "A dynamic simulation model for assessing the overall impact of incentive policies on power system reliability, costs and environment," Energy Policy, Elsevier, vol. 102(C), pages 170-188.
    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. Moktadir, Md. Abdul & Rahman, Mohammed Mizanur, 2022. "Energy production from leather solid wastes by anaerobic digestion: A critical review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 161(C).
    2. Gaigalis, Vygandas & Katinas, Vladislovas, 2020. "Analysis of the renewable energy implementation and prediction prospects in compliance with the EU policy: A case of Lithuania," Renewable Energy, Elsevier, vol. 151(C), pages 1016-1027.
    3. Juan José Cartelle Barros & Manuel Lara Coira & María Pilar de la Cruz López & Alfredo del Caño Gochi & Isabel Soares, 2020. "Optimisation Techniques for Managing the Project Sustainability Objective: Application to a Shell and Tube Heat Exchanger," Sustainability, MDPI, vol. 12(11), pages 1-22, June.

    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. Jahanshahi, Akram & Kamali, Mohammadreza & Khalaj, Mohammadreza & Khodaparast, Zahra, 2019. "Delphi-based prioritization of economic criteria for development of wave and tidal energy technologies," Energy, Elsevier, vol. 167(C), pages 819-827.
    2. Zeyringer, Marianne & Fais, Birgit & Keppo, Ilkka & Price, James, 2018. "The potential of marine energy technologies in the UK – Evaluation from a systems perspective," Renewable Energy, Elsevier, vol. 115(C), pages 1281-1293.
    3. Hoefnagels, Ric & Resch, Gustav & Junginger, Martin & Faaij, André, 2014. "International and domestic uses of solid biofuels under different renewable energy support scenarios in the European Union," Applied Energy, Elsevier, vol. 131(C), pages 139-157.
    4. Celiktas, Melih Soner & Kocar, Gunnur, 2009. "A quadratic helix approach to evaluate the Turkish renewable energies," Energy Policy, Elsevier, vol. 37(11), pages 4959-4965, November.
    5. Polzin, Friedemann & Egli, Florian & Steffen, Bjarne & Schmidt, Tobias S., 2019. "How do policies mobilize private finance for renewable energy?—A systematic review with an investor perspective," Applied Energy, Elsevier, vol. 236(C), pages 1249-1268.
    6. Wang, Yunfei & Li, Jinke & O'Leary, Nigel & Shao, Jing, 2024. "Banding: A game changer in the Renewables Obligation scheme in the United Kingdom," Energy Economics, Elsevier, vol. 130(C).
    7. András Mezősi & Enikő Kácsor & à kos Beöthy & à gnes Törőcsik & László Szabó, 2017. "Modelling support policies and renewable energy sources deployment in the Hungarian district heating sector," Energy & Environment, , vol. 28(1-2), pages 70-87, March.
    8. Lowes, Richard & Woodman, Bridget & Fitch-Roy, Oscar, 2019. "Policy change, power and the development of Great Britain's Renewable Heat Incentive," Energy Policy, Elsevier, vol. 131(C), pages 410-421.
    9. Yılmaz Balaman, Şebnem & Wright, Daniel G. & Scott, James & Matopoulos, Aristides, 2018. "Network design and technology management for waste to energy production: An integrated optimization framework under the principles of circular economy," Energy, Elsevier, vol. 143(C), pages 911-933.
    10. Vazquez, A. & Iglesias, G., 2016. "Capital costs in tidal stream energy projects – A spatial approach," Energy, Elsevier, vol. 107(C), pages 215-226.
    11. Sakah, Marriette & Diawuo, Felix Amankwah & Katzenbach, Rolf & Gyamfi, Samuel, 2017. "Towards a sustainable electrification in Ghana: A review of renewable energy deployment policies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 79(C), pages 544-557.
    12. Mezősi, András & Beöthy, Ákos & Kácsor, Enikő & Törőcsik, Ágnes, 2016. "A magyarországi távhő-szabályozás modellezése. A megújuló energiára alapozott hőtermelés [Modelling policy options in the district heating sector, with a focus on renewable consumption]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(11), pages 1149-1176.
    13. Farrell, Niall & Donoghue, Cathal O’ & Morrissey, Karyn, 2015. "Quantifying the uncertainty of wave energy conversion device cost for policy appraisal: An Irish case study," Energy Policy, Elsevier, vol. 78(C), pages 62-77.
    14. Jenkins, Lekelia Danielle & Dreyer, Stacia Jeanne & Polis, Hilary Jacqueline & Beaver, Ezra & Kowalski, Adam A. & Linder, Hannah L. & McMillin, Thomas Neal & McTiernan, Kaylie Laura & Rogier, Thea The, 2018. "Human dimensions of tidal energy: A review of theories and frameworks," Renewable and Sustainable Energy Reviews, Elsevier, vol. 97(C), pages 323-337.
    15. Luo, Tao & Khoshnevisan, Benyamin & Huang, Ruyi & Chen, Qiu & Mei, Zili & Pan, Junting & Liu, Hongbin, 2020. "Analysis of revolution in decentralized biogas facilities caused by transition in Chinese rural areas," Renewable and Sustainable Energy Reviews, Elsevier, vol. 133(C).
    16. Debabrata Mukhopadhyay & Nityananda Sarkar, 2021. "A Starting Note: Do Green Indices Outperform BSESENSEX and Energy Indices in India? Some Evidence on Investors’ Commitment Towards Green Investing," International Econometric Review (IER), Econometric Research Association, vol. 13(2), pages 41-58, June.
    17. Seel, Joachim & Barbose, Galen L. & Wiser, Ryan H., 2014. "An analysis of residential PV system price differences between the United States and Germany," Energy Policy, Elsevier, vol. 69(C), pages 216-226.
    18. Allan, Grant & Eromenko, Igor & McGregor, Peter & Swales, Kim, 2011. "The regional electricity generation mix in Scotland: A portfolio selection approach incorporating marine technologies," Energy Policy, Elsevier, vol. 39(1), pages 6-22, January.
    19. Patrizio, P. & Leduc, S. & Chinese, D. & Kraxner, F., 2017. "Internalizing the external costs of biogas supply chains in the Italian energy sector," Energy, Elsevier, vol. 125(C), pages 85-96.
    20. Chai, Li & Saffron, Christopher M., 2016. "Comparing pelletization and torrefaction depots: Optimization of depot capacity and biomass moisture to determine the minimum production cost," Applied Energy, Elsevier, vol. 163(C), pages 387-395.

    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:renene:v:130:y:2019:i:c:p:867-880. 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.journals.elsevier.com/renewable-energy .

    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.