Economic analysis of perennial energy crop production in Greece under the light of the new CAP
2006
Lychnaras, Vassilis | Rozakis, Stelios
Rising trends and volatility of fossil fuel prices and an E.U. directive that promotes bio-energy on the 2010 horizon as well as a CO2 reduction policy increase momentum for biomass in Europe as a renewable energy source. Raw material cost is an important part of bio-energy products, thus a valuable item of information for entrepreneurs. For this reason there is a need for studies assessing biomass costs in Southern Europe, especially after the last CAP reform (from the 2005-06 cultivation period) that represents a fundamental shift in policy. In this paper, dedicated biomass cost for conversion in power plants at the farm gate is estimated in Central Greece, taking into account agricultural policy changes. A harvesting service provided by a cost-minimizing company is incorporated into an arable agricultural programming model. Using an analytical technique which attempts to simulate the crop enterprise planning process at the farm level we present estimates of the regional supply of biomass to energy under the current and the new CAP based on spatial and expert information. Results confirm up to a 50% biomass cost decrease if the new CAP is fully applied to perennial energy crops.
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