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Can Biogas Plants Become a Significant Part of the New Polish Energy Deal? Business Opportunities for Poland’s Biogas Industry

Author

Listed:
  • Łukasz Mamica

    (Department of Public Economics, Cracow University of Economics, Rakowicka 27, 31-510 Kraków, Poland)

  • Monika Mazur-Bubak

    (Department of Public Economics, Cracow University of Economics, Rakowicka 27, 31-510 Kraków, Poland)

  • Renata Wróbel-Rotter

    (Department of Econometrics and Operational Research, Cracow University of Economics, Rakowicka 27, 31-510 Kraków, Poland)

Abstract

The agricultural biogas sector is now facing the opportunity to become a significant actor in the new energy deal as a low-carbon source of electricity. Given the current prospects for rapid growth in the industry, the authors developed an economic model of a medium-sized agricultural biogas plant to assess the rate of return on such an investment. The analysis comprises energy prices, substrates, and other costs reported by the plants already in operation, as well as the electricity sales support system, the actual biogas and electricity yield from the substrates, and the digestate utilisation. It shows that a biogas plant capable of delivering ca. 2000 MWe generates a profit in a much shorter timeframe than 20 years, even under quite uncertain economic conditions. In the model scenario, the breakeven point is reached at slightly below 5000 MWh of power output or at ca. 5800 MWh including financing costs, with a planned annual output of approx. 8000 MWh. The profitability of the model biogas plant was also demonstrated by calculations made for other scenarios which differ in substrate composition and financing structure. The parameters of the econometric model are based on the data collected from a group of 41 units that use only organic plant matter for biogas production.

Suggested Citation

  • Łukasz Mamica & Monika Mazur-Bubak & Renata Wróbel-Rotter, 2022. "Can Biogas Plants Become a Significant Part of the New Polish Energy Deal? Business Opportunities for Poland’s Biogas Industry," Sustainability, MDPI, vol. 14(3), pages 1-14, January.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:3:p:1614-:d:738544
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    References listed on IDEAS

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    1. Cegielska, Katarzyna & Noszczyk, Tomasz & Kukulska, Anita & Szylar, Marta & Hernik, Józef & Dixon-Gough, Robert & Jombach, Sándor & Valánszki, István & Filepné Kovács, Krisztina, 2018. "Land use and land cover changes in post-socialist countries: Some observations from Hungary and Poland," Land Use Policy, Elsevier, vol. 78(C), pages 1-18.
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    3. Silva Herran, Diego & Tachiiri, Kaoru & Matsumoto, Ken'ichi, 2019. "Global energy system transformations in mitigation scenarios considering climate uncertainties," Applied Energy, Elsevier, vol. 243(C), pages 119-131.
    4. Grégory Claeys & Simone Tagliapietra & Georg Zachmann, 2019. "How to make the European Green Deal work," Policy Contributions 33125, Bruegel.
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