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Size, Subsidies and Technical Efficiency in Renewable Energy Production: The Case of Austrian Biogas Plants

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  • Andreas Eder
  • Bernhard Mahlberg

Abstract

This study estimates the efficiency of biogas plants and identifies determinants of inefficiencies. Data Envelopment Analysis is applied on a sample of 86 Austrian biogas plants for the year 2014, covering about one third of the installed electric capacity of Austrian biogas plants. We decompose technical efficiency into scale efficiency and pure technical efficiency (managerial efficiency). In a second-stage regression analysis the effects of subsidies and other variables on managerial efficiency are investigated. The main results are: i) 34% of biogas plants in our sample are technically efficient, 40% are scale efficient and 50% are managerial efficient; ii) small biogas plants (≤100 kW) are scale inefficient exhibiting increasing returns to scale; iii) production subsidies show a significant, negative relationship to managerial efficiency. The results are consistent with the hypothesis that production subsidies provide a disincentive to managerial effort of plant operators.

Suggested Citation

  • Andreas Eder & Bernhard Mahlberg, 2018. "Size, Subsidies and Technical Efficiency in Renewable Energy Production: The Case of Austrian Biogas Plants," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    • Handle: RePEc:aen:journl:ej39-1-eder
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    References listed on IDEAS

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    1. Andreas Eder & Bernhard Mahlberg & Bernhard Stürmer, 2021. "Measuring and explaining productivity growth of renewable energy producers: An empirical study of Austrian biogas plants," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 48(1), pages 37-63, February.
    2. Chang, Kai & Long, Yu & Yang, Jiahui & Zhang, Huijia & Xue, Chenqi & Liu, Jianing, 2022. "Effects of subsidy and tax rebate policies on green firm research and development efficiency in China," Energy, Elsevier, vol. 258(C).
    3. Jindřich Špička, 2018. "How Do Agricultural Biogas Investments Affect Czech Farms?," Central European Business Review, Prague University of Economics and Business, vol. 2018(4), pages 34-60.
    4. Anna Sobczak & Ewa Chomać-Pierzecka & Andrzej Kokiel & Monika Różycka & Jacek Stasiak & Dariusz Soboń, 2022. "Economic Conditions of Using Biodegradable Waste for Biogas Production, Using the Example of Poland and Germany," Energies, MDPI, vol. 15(14), pages 1-18, July.
    5. Mahlberg, Bernhard & Frank-Stocker, Andrea & Koller, Wolfgang & Ramerstorfer, Christian, 2023. "Cost efficiency of renewable district heating systems: the case of Austria," MPRA Paper 118595, University Library of Munich, Germany.
    6. Eder, Andreas, 2018. "Measuring and decomposing economies of diversification: An application to biogas-fuelled cogeneration plants in Austria," International Journal of Production Economics, Elsevier, vol. 204(C), pages 421-432.
    7. Eder, Andreas, 2017. "Cost efficiency and economies of diversification of biogas-fuelled cogeneration plants in Austria: a nonparametric approach," MPRA Paper 80369, University Library of Munich, Germany.

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