Measuring and explaining productivity growth of renewable energy producers: An empirical study of Austrian biogas plants

Abstract

This study explores productivity growth of 65 Austrian biogas plants from 2006 to 2014 using Data Envelopment Analysis. Productivity growth is measured by calculating the Malmquist productivity index, and the contributions of technical change, efficiency change, and scale change to productivity growth are isolated. The results reveal that the average annual productivity growth between 2006 and 2014 is 1.1%. The decomposition of the Malmquist productivity index shows that the annual scale change, technical change, and efficiency change for the average plant is 0.6%, 0.3%, and 0.3%, respectively. These results indicate that the exploitation of returns to scale is a major driver of productivity growth and technical change is rather low. A second-stage regression analysis reveals that rising feedstock prices incentivized efficiency improvements but initial capital subsidies did not have an impact on technical change and productivity growth.