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Comparison of the return on investment of two energy production companies in Hungary using different biomass-based technologies

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  • Deák, Zsuzsanna

Abstract

Subject and purpose of work: Using renewable organic material for energy generation is exhibiting an increasing trend globally, also in Hungary. The aim of the Renewable Energy Action Plan of the European Union is to increase the share of energy production from renewable resources to 32% by 2030. At present, renewable energy sources represent 10.2% of Hungary’s primary energy consumption. Materials and methods: This study has examined the financial feasibility of two companies in Kunság region in Hungary that participate in the renewable energy production market with different types of technologies; that of a biogas facility and a short rotation energy forest plantation. Financial incentives are offered both in the EU and Hungary for the establishment and propagation of bioenergy producing enterprises, hence calculations are presented both with and without subsidies. Results: The results show that regardless of the production method, without subsidies, none of the businesses could make a profit in the period under review. Conclusions: The main reasons behind unprofitable operations are the initial high capital outlay, high logistics costs, not mature technological solutions and suppressed purchasing prices.

Suggested Citation

  • Deák, Zsuzsanna, . "Comparison of the return on investment of two energy production companies in Hungary using different biomass-based technologies," Economic and Regional Studies (Studia Ekonomiczne i Regionalne), John Paul II University of Applied Sciences in Biala Podlaska, vol. 15(3).
    • Handle: RePEc:ags:plecrs:339254
    DOI: 10.22004/ag.econ.339254
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    References listed on IDEAS

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    1. Scarlat, Nicolae & Dallemand, Jean-François & Fahl, Fernando, 2018. "Biogas: Developments and perspectives in Europe," Renewable Energy, Elsevier, vol. 129(PA), pages 457-472.
    2. Gradziuk Piotr & Gradziuk Barbara, 2020. "Renewable Energy Sources as a Development Opportunity for Peripheral Areas," Economic and Regional Studies / Studia Ekonomiczne i Regionalne, Sciendo, vol. 13(2), pages 184-198, June.
    3. Zmija, Janusz & Czekaj, Marta, 2014. "The Diversity Of Farm Production As The Basis For The Development Of Bio-Economy In The Malopolskie Province," Economic and Regional Studies (Studia Ekonomiczne i Regionalne), John Paul II University of Applied Sciences in Biala Podlaska, vol. 7(4), October.
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    JEL classification:

    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services

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