TY - JOUR

T1 - Farmers’ willingness to participate in collective biogas investment

T2 - A discrete choice experiment study

AU - Zemo, Kahsay Haile

AU - Termansen, Mette

PY - 2018/5

Y1 - 2018/5

N2 - Biogas production may make an important contribution to multiple policy objectives, i.e. the transition to renewable energy, increased recycling of agricultural waste and reduction in greenhouse gas emission from agriculture. Despite the role of biogas in achieving these wider benefits, the engagement of stakeholders such as farmers has been low and the barriers to their participation in biogas production is not well understood. This study examines farmers’ willingness to participate in a unique, manure-based collective biogas investment based on a discrete choice experiment study of Danish farmers. Our results show that the majority of farmers, including farmers who never considered investing in biogas before and farmers that already participate in conventional biogas plants, are interested in a partnership-based biogas investment (PBI). A mixed logit model with flexible distribution shows that farmers’ participation in PBI is mainly motivated by a moderate number of partner farmers, short distance between the farm and the plant, contract options to sell biogas, an option to cancel the partnership, and free startup consultancy. Farmers are willing to accept a significant reduction in subsidy to acquire favorable aspects of the PBI. A second stage analysis of farmers’ intensity of participation also reveals that an increase in livestock units, involvement in off-farm activity, increase in farm size, and positive view towards investment enhance willingness to supply manure. Linking results from discrete choice and corner solution models, we estimate the average manure supply to a partnership-based biogas plant to be around 96,000 tons/year.

AB - Biogas production may make an important contribution to multiple policy objectives, i.e. the transition to renewable energy, increased recycling of agricultural waste and reduction in greenhouse gas emission from agriculture. Despite the role of biogas in achieving these wider benefits, the engagement of stakeholders such as farmers has been low and the barriers to their participation in biogas production is not well understood. This study examines farmers’ willingness to participate in a unique, manure-based collective biogas investment based on a discrete choice experiment study of Danish farmers. Our results show that the majority of farmers, including farmers who never considered investing in biogas before and farmers that already participate in conventional biogas plants, are interested in a partnership-based biogas investment (PBI). A mixed logit model with flexible distribution shows that farmers’ participation in PBI is mainly motivated by a moderate number of partner farmers, short distance between the farm and the plant, contract options to sell biogas, an option to cancel the partnership, and free startup consultancy. Farmers are willing to accept a significant reduction in subsidy to acquire favorable aspects of the PBI. A second stage analysis of farmers’ intensity of participation also reveals that an increase in livestock units, involvement in off-farm activity, increase in farm size, and positive view towards investment enhance willingness to supply manure. Linking results from discrete choice and corner solution models, we estimate the average manure supply to a partnership-based biogas plant to be around 96,000 tons/year.

U2 - 10.1016/j.reseneeco.2017.12.001

DO - 10.1016/j.reseneeco.2017.12.001

M3 - Journal article

VL - 52

SP - 87

EP - 101

JO - Resource and Energy Economics

JF - Resource and Energy Economics

SN - 0928-7655

ER -