Biogas and Biomethane Technologies: an AHP Model to Support the Policy Maker in Incentive Design in Italy

Over the past six years, biogas production in Italy has experienced an economic boom: more than 4.5 billion euro investments, about 2 billion normal cubic meters of natural gas equivalent produced. By contrast, biomethane production in Italy is not widespread. This limited spread substantially depends on the lack of profitable Government incentives to biomethane production. In the near future, the Italian Government is expected to fix new feed-in tariff (FIT) schemes for energy production by renewable energy sources (RES). In this context it is fundamental for the policy maker to identify whether it will be preferable to introduce more generous FITs to favor biogas production for electric power generation vs biomethane production through biogas upgrading. In this paper we propose a multi criteria decision model to support the policy maker in the definition of sustainable development policies for biogas and biomethane production. Specifically we provide an Analytic Hierarchy Process (AHP) model to multiple criteria prioritization of incentives paid to biogas vs biomethane. According to group decision making approaches, we selected a pool of experts that structured the decision problem and disaggregated it into a hierarchy by identifying quantitative and qualitative criteria and subcriteria to evaluate each technology. The model results reveal that biomethane production plants are preferred to biogas production plants independently from the size, whereas bigger size biomethane installations are ranked higher with respect to smaller ones. Under stringent public budget constraints it might be de facto inefficient and not cost-effective to introduce incentive mechanisms to biogas production plant.