Measuring and explaining productivity growth of renewable energy producers: An empirical study of Austrian biogas plants

This study explores productivity growth for a group of 65 Austrian biogas plants from 2006 to 2014 using Data Envelopment Analysis. The sample covers about 25 % of the installed electric capacity of Austrian biogas plants. Productivity growth is measured by calculating the Malmquist productivity index, and the contributions of technical change, efficiency change and scale change to productivity growth are isolated. Average annual productivity growth between 2006 and 2014 is 1.1 %. The decomposition of the Malmquist index shows that the annual scale change, technical change, and efficiency change for the average plant is 0.6 %, 0.3 % and 0.3 %, respectively. Those results indicate that the exploitation of returns to scale is a major driver of productivity growth in the Austrian biogas sector. However, there is a large variation in productivity growth across biogas plants. A second-stage regression analysis identifies important determinants of productivity growth. The results show that i) the exploitation of returns to scale as well as changes in ii) output diversification iii) capital intensity, iv) capacity utilization and v) feedstock prices are positively associated with productivity growth.