An analysis of the social and private return to land use change from agriculture to renewable energy production in Ireland

Abstract

Increased use of renewable energy is a major part of Ireland's plans to reduce greenhouse gas (GHG) emissions, lessen reliance on fossil fuels, and enable sustainable economic growth. Two forms of renewable energy interesting Irish policymakers are bioenergy and solar PV. To scale up these technologies, land will be required to grow bioenergy feedstocks and erect ground mount solar PV arrays. A micro, farm-based approach is utilised to generate private returns from renewable energy production, and agriculture, adjusted for the cost of GHGs. This considers both the cost to society of increasing GHG emissions and the benefit of reducing emissions.This paper compares income that could be derived from renewable energy production with average agricultural income from the main farm systems in Ireland. The private (market and subsidy) and social (GHG) return from substituting renewable energy sources for the existing agricultural land use on 1 ha is considered. We also use input-output modelling to generate output multipliers for renewable energy technologies: biogas, biomethane, short rotation coppice (SRC) willow, and solar PV.The results show that the market return from growing 1 ha of grass silage and SRC willow is less than for all the main farming systems. When the social value of the feedstock is considered by putting a monetary value on displaced GHG emissions, producing grass silage and willow biomass can provide a better return to farmers than cattle and sheep farming. Due to the high land rental amounts available to farmers from solar companies, the market and social return is higher for using land to erect solar PV than any of the main agricultural activities. Results from the output multiplier analysis show that biomethane production has the highest multiplier while solar PV has the lowest.