Modelling the Distributional Impact of Farm Level Renewable Energy

The farming sector is one of the most carbon intensive economic sectors and is a household group that is hard to reach for household decarbonisation. The use of anaerobic digesters represents a novel technology that can convert biomass such as slurry and grass silage into biogas and ultimately into heat or electricity. It can as such provide a within farm-based source of renewable energy for often low-income farms, improving both household fuel poverty and relative income poverty through the reduction in an important cost source. In this paper we develop a bio-economic model of this process that is applied using a farm level microsimulation model to evaluate the at farm level potential feedstocks for renewable energy generation. We compare the potential impact at farm level of either using the feedstock to reduce the use of fossil fuel based energy or electricity with supplying the biomass as feedstock to commercial biomethane plants. Using a distributional analysis we consider the optimal solution across different farms by farm size, system and income level. We make policy recommendations in how to incentivise the uptake of this potentially useful source of renewable energy.