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The economics of biogas in Denmark: a farm and socioeconomic perspective

Author

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  • Jacobsen, Brian H.
  • Laugesen, Frederik M.
  • Dubgaard, Alex
Abstract
Denmark has been one of the leading European Countries in using Biogas for Combined Heat and Power (CHP), since the 1980s. However, in the last two decades, the increase has been limited. A new energy policy aimed at increasing the profitability of biogas was introduced in the spring of 2012. The analysis here shows that the new agreement will improve the profitability of biogas plants and increase the biogas production although the political ambition of an increase from 4 PJ to 17 PJ by 2020 seems unlikely. The analysis shows that biogas plants can be profitable even if the input is a mix of manure and solid fractions/ farm yard manure given the present level of support. The overall production costs are around J0.63 per m3 methane produced, but they can vary from 0.47–0.78 per m4 methane produced3. The profit in the CASE 2012 analysis is J420,000 per year or 0.0.8 J per m3 methane. The analysis shows that the profit from upgrading biogas is only to be preferred if the sales price of heat or the amount sold are relatively low. The socioeconomic analyses show that the costs of biogas as a measure to reduce CO2 emissions are around J151 per tonne CO2 (J85–266 per ton) and that using maize is an expensive way to reduce emissions of CO2. In an analysis comparing the Danish and German support system, it has been found that the German socioeconomic costs seem to be five times higher than the Danish, based on the same calculation method. In order to improve profitability and reduce the cost of reducing CO2 emissions, the input to the biogas plant has to be based more on farm yard manure and deep bedding, although the cost of using these inputs might be higher than was included in the analysis.

Suggested Citation

  • Jacobsen, Brian H. & Laugesen, Frederik M. & Dubgaard, Alex, 2014. "The economics of biogas in Denmark: a farm and socioeconomic perspective," International Journal of Agricultural Management, Institute of Agricultural Management, vol. 3(3), pages 1-10.
    • Handle: RePEc:ags:ijameu:236887
    DOI: 10.22004/ag.econ.236887
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    References listed on IDEAS

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    1. Meyer-Aurich, Andreas & Schattauer, Alexander & Hellebrand, Hans Jürgen & Klauss, Hilde & Plöchl, Matthias & Berg, Werner, 2012. "Impact of uncertainties on greenhouse gas mitigation potential of biogas production from agricultural resources," Renewable Energy, Elsevier, vol. 37(1), pages 277-284.
    2. Delzeit, Ruth & Britz, Wolfgang & Kreins, Peter, 2012. "An economic assessment of biogas production and land use under the German renewable energy source act," Kiel Working Papers 1767 [rev.], Kiel Institute for the World Economy (IfW Kiel).
    3. Raven, R.P.J.M. & Gregersen, K.H., 2007. "Biogas plants in Denmark: successes and setbacks," Renewable and Sustainable Energy Reviews, Elsevier, vol. 11(1), pages 116-132, January.
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    Cited by:

    1. Jacobsen, B.H., 2017. "Why Is Acidification Of Slurry A Success Only In Denmark? Transfer Of Environmental Technology Across Boarders," 21st Congress, Edinburgh, Scotland, July 2-7, 2017 345856, International Farm Management Association.
    2. Skovsgaard, Lise & Jacobsen, Henrik Klinge, 2017. "Economies of scale in biogas production and the significance of flexible regulation," Energy Policy, Elsevier, vol. 101(C), pages 77-89.
    3. Tonini, Davide & Vadenbo, Carl & Astrup, Thomas Fruergaard, 2017. "Priority of domestic biomass resources for energy: Importance of national environmental targets in a climate perspective," Energy, Elsevier, vol. 124(C), pages 295-309.
    4. Zemo, Kahsay Haile & Termansen, Mette, 2018. "Farmers’ willingness to participate in collective biogas investment: A discrete choice experiment study," Resource and Energy Economics, Elsevier, vol. 52(C), pages 87-101.
    5. Stelios Rozakis & Andrea Bartoli & Jacek Dach & Anna Jędrejek & Alina Kowalczyk-Juśko & Łukasz Mamica & Patrycja Pochwatka & Rafał Pudelko & Kesheng Shu, 2021. "Policy Impact on Regional Biogas Using a Modular Modeling Tool," Energies, MDPI, vol. 14(13), pages 1-21, June.
    6. Benavidez, Justin R. & Thayer, Anastasia W. & Anderson, David P., 2019. "Poo Power: Revisiting Biogas Generation Potential on Dairy Farms in Texas," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 51(4), pages 682-700, November.
    7. Teymoori Hamzehkolaei, Fatemeh & Amjady, Nima, 2018. "A techno-economic assessment for replacement of conventional fossil fuel based technologies in animal farms with biogas fueled CHP units," Renewable Energy, Elsevier, vol. 118(C), pages 602-614.
    8. Marta Szyba & Jerzy Mikulik, 2023. "Management of Biodegradable Waste Intended for Biogas Production in a Large City," Energies, MDPI, vol. 16(10), pages 1-19, May.

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