An agent-based spatial simulation to evaluate the promotion of electricity from agricultural biogas plants in Germany

In this paper we investigate how changes in the support scheme may affect electricity generation from agricultural Combined Heat and Power (CHP) biogas plants in Germany. An agent-based simulation model for investment decision-making is coupled with GIS data. The spatial-temporal diffusion model accounts for the limited availability of substrate resources, alternative plant sizes and different heat use combinations. For illustration, we apply the model to the German federal states of North Rhine-Westphalia and Bavaria, for which we estimate an additional economical capacity potential of 409 MWel. Overall, we conclude that current feed-in payments per unit of electric power provided are probably not too far off the optimum level, if one considers the maximum diffusion of CHP units possible. However, the current feed-in system may overtly favor small generating units, thereby failing to incentivize coordination among farmers for joint resource utilization in larger and more efficient plants. In addition, optimization of the biogas conversion process and feedstock use would also be highly beneficial.

► Additional economic biogas capacity potential in NRW and Bavaria is 370 MWel ► Higher feed-in tariffs do not increase additional installed capacity ► A 25% cut in feed-in payments significantly reduces diffusion of new biogas plants ► Smaller incentive reductions have a little impact on additional installed capacity ► But tendency to invest in smaller (and more costly) plants offsets savings