<abstract xmlns="http://www.w3.org/1999/xhtml"><p>Use of renewable energy sources (RES) might be one of the key factors for the triple win-win: improving energy supply security, promoting local economic development, and reducing greenhouse gas emissions. The authors ex-post evaluate the impact of two main support instruments applied in 2010-2014 – the investment support (IS) and the feed-in tariff (FIT) – on the economic viability of small scale (up to 2MW<sub>el</sub>) biogas unit. The results indicate that the electricity production cost in biogas utility roughly corresponds to the historical FIT regarding electricity production using RES. However, if in addition to the FIT the IS is provided, the analysis shows that the practice of combining both the above-mentioned instruments is not optimal because too high total support (overcompensation) is provided for a biogas utility developer. In a long-term perspective, the latter gives wrong signals for investments in new technologies and also creates unequal competition in the RES electricity market. To provide optimal biogas utilisation, it is necessary to consider several options. Both on-site production of electricity and upgrading to biomethane for use in a low pressure gas distribution network are simulated by the cost estimation model. The authors’ estimates show that upgrading for use in a gas distribution network should be particularly considered taking into account the already existing infrastructure and technologies. This option requires lower support compared to support for electricity production in small-scale biogas utilities.</p></abstract>

Use of renewable energy sources (RES) might be one of the key factors for the triple win-win: improving energy supply security, promoting local economic development, and reducing greenhouse gas emissions. The authors ex-post evaluate the impact of two main support instruments applied in 2010-2014 – the investment support (IS) and the feed-in tariff (FIT) – on the economic viability of small scale (up to 2MWel) biogas unit. The results indicate that the electricity production cost in biogas utility roughly corresponds to the historical FIT regarding electricity production using RES. However, if in addition to the FIT the IS is provided, the analysis shows that the practice of combining both the above-mentioned instruments is not optimal because too high total support (overcompensation) is provided for a biogas utility developer. In a long-term perspective, the latter gives wrong signals for investments in new technologies and also creates unequal competition in the RES electricity market. To provide optimal biogas utilisation, it is necessary to consider several options. Both on-site production of electricity and upgrading to biomethane for use in a low pressure gas distribution network are simulated by the cost estimation model. The authors’ estimates show that upgrading for use in a gas distribution network should be particularly considered taking into account the already existing infrastructure and technologies. This option requires lower support compared to support for electricity production in small-scale biogas utilities.

Energy Production from Biogas: Competitiveness and Support Instruments in Latvia

Institute of Physical Energetics, 21 Aizkraukles Str., Riga,

Latvian Journal of Physics and Technical Sciences

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"Energy Production from Biogas: Competitiveness and Support Instruments in Latvia"}

Use of renewable energy sources (RES) might be one of the key factors for the triple win-win: improving energy supply security, promoting local economic...

Energy Production from Biogas: Competitiveness and Support Instruments in Latvia

Published Online: Nov 19, 2016

Page range: 43 - 53

DOI: https://doi.org/10.1515/lpts-2016-0035

Keywords
biogas, electricity production, energy production price, investment subsidies, feed-in tariff

© 2016 G. Klāvs et al., published by De Gruyter Open

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Energy Production from Biogas: Competitiveness and Support Instruments in Latvia

Published Online: Nov 19, 2016

Page range: 43 - 53

DOI: https://doi.org/10.1515/lpts-2016-0035

Keywordsbiogas, electricity production, energy production price, investment subsidies, feed-in tariff

© 2016 G. Klāvs et al., published by De Gruyter Open

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
biogas, electricity production, energy production price, investment subsidies, feed-in tariff