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Modelling regional input markets with numerous processing plants: The case of green maize for biogas production in Germany

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  • Delzeit, Ruth
  • Britz, Wolfgang
  • Holm-Müller, Karin

Abstract

The location of first generation processing plants for biogas using bulky inputs is a prominent example of locational decisions of plants that face high per unit transport costs of feedstock and simultaneously depend to a large extent on feedstock availability. Modelling the resulting regional feedstock markets then requires a spatially explicit representation of demand. With production capacities of plants small in comparison to market size, large numbers of possible type-location combinations need to be considered, requiring considerable computation time under existing integer programming-based approaches. Therefore, in this paper we aim to present an alternative, faster and more flexible iterative solution approach to simulate location decisions for processing plants. And with greater flexibility, this approach is able to take into account spatially heterogeneous transport costs depending on total demand. The approach is implemented in a modelling framework for biogas production from green maize in Germany, which currently accounts for ca. five percent of Germany's agricultural area. By modifying green maize prices, demand functions are derived and intersected with regional supply functions from an agricultural model to simulate market clearing prices and quantities. The application illustrates that our approach efficiently simulates markets characterised by small-scale demand units and high, spatially heterogeneous transport costs.

Suggested Citation

  • Delzeit, Ruth & Britz, Wolfgang & Holm-Müller, Karin, 2011. "Modelling regional input markets with numerous processing plants: The case of green maize for biogas production in Germany," Discussion Papers 162892, University of Bonn, Institute for Food and Resource Economics.
  • Handle: RePEc:ags:ubfred:162892
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    File URL: http://purl.umn.edu/162892
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Britz, Wolfgang & Delzeit, Ruth, 2013. "The impact of German biogas production on European and global agricultural markets, land use and the environment," Energy Policy, Elsevier, vol. 62(C), pages 1268-1275.
    2. Chinese, D. & Patrizio, P. & Nardin, G., 2014. "Effects of changes in Italian bioenergy promotion schemes for agricultural biogas projects: Insights from a regional optimization model," Energy Policy, Elsevier, vol. 75(C), pages 189-205.
    3. Ruth Delzeit & Karin Holm-Müller & Wolfgang Britz, 2012. "Ökonomische Bewertung des Erneuerbare Energien Gesetzes zur Förderung von Biogas," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 13(3), pages 251-265, August.
    4. Bartoli, A. & Cavicchioli, D. & Kremmydas, D. & Rozakis, S. & Olper, A., 2016. "The impact of different energy policy options on feedstock price and land demand for maize silage: The case of biogas in Lombardy," Energy Policy, Elsevier, vol. 96(C), pages 351-363.
    5. Drechsler, Martin & Meyerhoff, Jürgen & Ohl, Cornelia, 2012. "The effect of feed-in tariffs on the production cost and the landscape externalities of wind power generation in West Saxony, Germany," Energy Policy, Elsevier, vol. 48(C), pages 730-736.
    6. Hans-Joachim Naegele & Andreas Lemmer & Hans Oechsner & Thomas Jungbluth, 2012. "Electric Energy Consumption of the Full Scale Research Biogas Plant “Unterer Lindenhof”: Results of Longterm and Full Detail Measurements," Energies, MDPI, Open Access Journal, vol. 5(12), pages 1-17, December.
    7. Patrizio, P. & Leduc, S. & Chinese, D. & Dotzauer, E. & Kraxner, F., 2015. "Biomethane as transport fuel – A comparison with other biogas utilization pathways in northern Italy," Applied Energy, Elsevier, vol. 157(C), pages 25-34.

    More about this item

    Keywords

    Competitive facility location; transport costs; modelling; biogas; biomass transportation; Agricultural and Food Policy; Environmental Economics and Policy; Q16; C31; C63;

    JEL classification:

    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques

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