Does French Energy policy foster investments in the Biogas sector?
Oana Ionescu  1@  , Pascal Bovy  2@  
1 : GAEL, G2ELab, Grenoble INP
Univ. Grenoble Alpes, CNRS, INRA, Grenoble INP, GAEL, 38000 Grenoble, France, Institut National Polytechnique de Grenoble - INPG
2 : Université Grenoble Alpes
GAEL

The complexity of decision-making process in biomethane sector arises from the uncertainty of the evolution of the natural gas price, anticipation of changes in the production costs and the level of the market premium an investor should apply for. In addition, the investment is irreversible and intended for long horizons of time. To study the investment behavior we adopt a real options approach that allows the consideration of a dynamic framework in an uncertain context. We focus on the development of biomethane from mainly agricultural waste according to the Plurennial Energy Programming presented in January 2019 by the French government . In our microeconomic analysis, we show to which extent the willingness to invest depends on the type of uncertainty related to the evolution of natural gas prices or to the competition, on the level of market premium or on the technological learning. Some of our results show that none of the ambitious ceiling prices for 2023 and 2028 seem attainable and larger installations are economically more attractive.


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