Integration of risks and political changes in dynamic modelling of biogas production
2014
Zeverte-Rivza, S., Latvia Univ. of Agriculture, Jelgava (Latvia) | Pilvere, I., Latvia Univ. of Agriculture, Jelgava (Latvia) | Rivza, P., Latvia Univ. of Agriculture, Jelgava (Latvia)
Promoting biogas production to generate energy is associated with several EU policy initiatives such as increasing the output of electricity and thermal energy, energy independence, and the reduction of GHG emissions. To reach both, the international and the national policy targets, all EU member states use several support mechanisms. In Latvia four support mechanisms are used – obligatory state purchase of electricity, guarantee of a set price release from paying the electricity tax for the energy, produced from the renewable resources and public (EU structural fund) funding for investments. In few recent years in Latvia, the support mechanisms described above had created a motivating support system for joining the biogas production sector, but due to the pressure of enterprises and households the government intends to change the support policy and the amount of the support for electricity production from biogas. It creates instability and increases political risks for biogas producers thus obstructing the development of the sector. The current article reviews the integration of the risk assessment results and changes in the governmental support policy for biogas production in the dynamic model of the farm level biogas production and estimates the impact of political risks and current changes in the support policy.
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