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Input markets

BioChain – First Project partners workshop Lise Skovsgaard Economic Ph.d. within WP1 Title : Biogas Value Chain – Microeconomic Incentives and Policy regulation DTU Management Engineering January, 2014.

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Input markets

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  1. BioChain– First Project partners workshopLise SkovsgaardEconomic Ph.d. within WP1Title: Biogas Value Chain – Microeconomic Incentives and Policy regulation DTU Management EngineeringJanuary, 2014

  2. Lise Skovsgaard – "Biogas Value Chain – Microeconomic Incentives and Policy regulation" – my Ph.d. project within WP1

  3. Lise Skovsgaard – "Biogas Value Chain – Microeconomic Incentives and Policy regulation" – my Ph.d. project within WP1 Output markets Risk Regulation Input markets

  4. Lise Skovsgaard – "Biogas Value Chain – Microeconomic Incentives and Policy regulation" – my Ph.d. project within WP1 Areas of concern from study plan: • Risk: Which risk issues are more determining for the investment decision, and can tools be found to reduce this risk? • Mix of market- and ownership structures: How does this mix influence the biogas production and could a change in structure change the chances for profit? • Regulation: How does the existing regulation in the energy- and agricultural sectors affect the biogas production? And can changed regulation improve chances for profit? Regulation: How does the existing regulation in the energy- and agricultural sectors affect the biogas production? And can changed regulation improve chances for profit?

  5. Examples, for my choice of focus, General example Regulation: Risk, ownership structures, regulation on natural monopoly, regulation on subsidies, regulation on input - Until November 2013, support for biogas came through the Combined Heat and Power production  clear limitations on scale In international competition, high environmental regulation – high risk  need for high risk premium Local farmer Local CHP Biogas production Monopoly regulated and low risk regulated input price  low biogas price Not always allowed to own biogas plant • Who should produce the biogas? • who can? • who will?

  6. Examples, for my choice of focus, Måbjerg Bioenergy Regulation and risk: Capital - ownership structures, environmental/planning regulation  long delays/further insecurity/risk Capital was too expensive  closed potential for ownership Local farmer Local CHP Biogas production Probably too small, not interested or not allowed by regulator • Who should own the biogas facility? • The local municipality

  7. Examples, where the areas of concern are relevant, Fredericia Waste water Busses for the municipality Regulation and risk: Regulation, costs, synergy Upgradet biogas – private owner Owned by the local municipality - Regulated as natural monopoly – low risk Own CHP Biogas production Waste water treatment Monopoly regulated and low risk regulated input price  low biogas price Not always allowed to own biogas plant Ownership and investments are minor problems - What happens when new investments and synergy opportunities appear….???

  8. Examples, where the areas of concern are relevant, Foulum • Other input • Maize, beats…. • Fish waste • Waste from dairy or slaughterhouses • Glycerin Input mix and costs Already now some inputs are not tested, as they are too expensive as input   •   • the significance of prices in our work Local farmer Manure Biomass..? Biogas production

  9. Lise Skovsgaard – "Biogas Value Chain – Microeconomic Incentives and Policy regulation" – my Ph.d. project within WP1 Plant level model optimising at plant level Soon – input to Ida • National level model optimising at national level • Linking to Balmorel – Energy Systems Model • Price methods Later – but focus already

  10. Lise Skovsgaard – "Biogas Value Chain – Microeconomic Incentives and Policy regulation" – Time schedule

  11. Price methods • Treated manure • fertilizer • improved environment • phosphorus, NH4, CO2, Nitrate…? • more animals?... • Other input • Mais, beats…. • Fish waste • Waste from dairy or slaughterhouses • Relevant issues • Regulation • Environment • Agriculture • CO2/RES • Competing markets/substitution • Gas • Heat • Power • Relevant issues • Supply/demand • regulation • Logistics • Substitutability • What is focus? – What will determine the price(s)? • Demand? (which?) • Renewable energy? • Treated manure  improved environment • Supply? • Waste treatment? • Excess biomass? Manure Biogas production • Energy • Heat (and power?) • Biogas • for CHP • for industry • for transport Waste water Waste?...

  12. What I would like from you!! Input on • Regulation – particularly agriculture • Costs • Relevant chemical/physical issue, needed to be taken into account… • Data on potential biogas plants

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