Refuse-derived fuel as a secondary energy in Taiwan—Using Hotelling space allocation model

Most Taiwanese farmers usually blend rice straws into the soil after harvest. However, rice straws possess great thermal energy, which can be used to produce refuse-derived fuel (RDF-5). As Taiwan faces energy shortage, the development benefits of the RDF-5 industry are tempting. This study employs the Hotelling model to design the locations and the optimal numbers of RDF-5 plants. From the technology and material supply point of view, turning waste rice straws into RDF-5 is feasible in Taiwan. Nevertheless, from the business operation perspective, even if the RDF-5 plant is willing to lower its profit rate, its selling price is still hard to compete with imported RDF-5. If the Taiwanese government decides to pursue RDF-5 as an alternative energy, they might need to take a step further to subsidize entrepreneurs or provide appropriate tax benefits. Otherwise, the RDF-5 industry is hard to survive in Taiwan.