Stochastic viability of second generation biofuel chains: Micro-economic spatial modeling in France
AbstractTo better understand the production of biofuels derived from lignocellulosic feedstock, we investigate the interplay between the agricultural sector and a biofuel facility, at the local level. More specifically, we investigate the economic and technological viability of a bioenergy facility over time in an uncertain economic context using a stochastic viability approach. Two viability constraints are taken into consideration: the facility's demand for lignocellulosic feedstock has to be satisfied each year and the associated supply cost has to be lower than the facility's profitability threshold. We assess the viability probability of various strategies the facility can adopt to ensure that the agricultural sector meets its demand for biomass. These supplying strategies are determined at the initial time and define the constant share of total demand met by contracting out the demand to farmers who grow perennial crops. Any remaining demand is met by annual crops or wood. The demand constraints and agricultural price scenarios over the time horizon are introduced in an agricultural and forest biomass supply model, which in turns determines the supply cost per unit of energy and computes the viability probabilities of the supplying strategies. If a facility is to be viable over time, it is best for it to ensure that 100% of its demand is contracted out to farmers supplying perennial dedicated crops. This result is robust to the price context.
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Bibliographic InfoPaper provided by INRA, Economie Publique in its series Working Papers with number 2013/02.
Date of creation: 13 Jun 2013
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Biofuel; biomass production; spatial economics; stochastic viability; Monte Carlo simulation;
Other versions of this item:
- Bamiere, Laure & Martinet, Vincent & Gouel, Christophe & Le Cadre, Elodie, 2011. "Stochastic Viability of Second Generation Biofuel Chains: Micro-economic Spatial Modeling in France," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114238, European Association of Agricultural Economists.
- Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
- Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services
- Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
This paper has been announced in the following NEP Reports:
- NEP-AGR-2013-07-05 (Agricultural Economics)
- NEP-ALL-2013-07-05 (All new papers)
- NEP-ENE-2013-07-05 (Energy Economics)
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