An Analysis-of-Options approach to comprehend decision making in the Dutch biogas system

Abstract

Gas is essential to the functioning of the Dutch energy system, as it covers nearly half of the total primary energy supply in the Netherlands. Biogas obtained by the digestion of wet biomass may become a growing source of green energy for the Netherlands. The Dutch ministry of Economic Affairs, Agriculture and Innovation (EL&I) considers biogas as one of the key options for meeting its policy objective of 14% sustainable energy supply in 2020. Accommodating biogas requires a transition of the Dutch gas system. Currently the decision making in the biogas system is in an impasse, i.e. only a little more than 10% of the biogas projects that were granted an SDE+ subsidy in 2010 is realized (Agentschap NL 2012) and the amount of green gas which is injected in the Dutch gas infrastructure is below expectations as biogas represented less than 0,3% of total primary energy supply in 2010, while the goals are set at 5% in 2020 (CBS 2011). The main obstacle is the policy-making process, in particular the lack of a consistent national policy regarding sustainable energy and the lack of coordination and transparency in the decision making process. The objective of this study is to obtain insight in the decision-making process in the Dutch biogas system in order to contribute to resolving the impasse. An Analysis-of-Options collects relevant data for the decision-making process in order to reveal resource dependencies between actors. These resource dependencies are determined by the possibilities (OPTIONS) that ACTORS have at their disposal to influence the decision-making process and change the final outcome: SCENARIO. A change in the final outcome also results in a change in the pay-off to the involved actors, which is expressed by the VALUES given to options, representing their preferences. We hypothesize that an Analysis-of-Options can provide more transparency in the decision-making process and help coordinate the transition towards an increased use of biogas in the Netherlands. The main research question central in this thesis, is as follows: “Can an Analysis-of-Options help to understand the multi-actor context in the Dutch biogas system in transition in order to support the use of biogas in the Dutch Energy mix towards 2030?” An Analysis-of-Options for the biogas system in the Netherlands was formulated based on literature study and 25 interviews with experts in the Dutch gas system. First, a selection of the relevant actors was made, based on their interest in the biogas issue and their power to influence the decision-making process. For the selected actors, we identified the options at their disposal to influence the decision-making process. Sixteen scenarios were formulated on the basis of four decision areas which determine the future system for biogas: 1) Feed-in point in the national gas infrastructure; 2) Direct or hub injection; 3) Quality conversion; and 4) End-use. The values in the model were estimated based on our findings of the interviews. We validated the model statistically and with an expert meeting with nine experts representing the most relevant parties from the biogas system were present. Based on the performed analyses, we obtained some relevant insights with respect to the Analysis-of-Options approach. We distinguished scientific purpose from practical purpose with respect to the usability of the model. In general, our most important insight is the fact that the Analysis-of-Options is a tool which fits best to situations where the action perspectives are clearly defined, and the options available to the actors are limited. For the biogas system in general, many options exist, and there is a high degree of case specific characteristics that influence the options for individual decision-making issues. The applicability of the Analysis-of-Options is thus expected to be highest for clearly delineated situations for which a larger number of projects decisions have to be taken, such as provincial area planning. For scientific purpose, the Analysis-of-Options approach was mainly focused on the insights we could obtain in the interdependencies between the actors and their potential strategies. The current Analysis-of-Options approach provided insights on the OPTIONS which are essential for achieving particular SCENARIOS. Especially the role of the national government, the local government and the network operator turned out to be essential in all of the strategies, as without subsidies, a permit or construction of a pipeline and injection-point respectively, the scenarios are not feasible. A drawback of the fact that a general biogas approach was chosen, is that it resulted in a limited level of detail in the model and the outcomes. Case-specific factors are essential for the OPTIONS and the VALUATIONS, which in turn have a high impact on the outcomes. An advantage of the general biogas approach is that with relatively little information, some general conclusions could be drawn on the essentiality of actors. Introducing sequentiality in the decision-making process could improve our understanding of the relation between options and values. If a simulation game approach is taken, the involvement of actors in multiple decision-rounds allows for dynamic actions. From our research it can be concluded that what is of scientific value is not considered of highest value for practical purposes. The practical usability of the Analysis-of-Options approach depends very much on the objective with which the analysis is conducted, the specific case at hand and the facilitation that is provided in case multiple actors use the model together. Furthermore, it should be noted that the practical usability depends on the affinity that individual users have with the usage of a model that contains many different input variables (both codes and numbers). Experts found it difficult to assess whether the Analysis-of-Options is of practical use, for that would depend very much on the objective with which it would be used and the specific decision-making problem at hand. Based on the experience in the expert meeting and the discussion with experts, it seems that the practical usability lies mainly in the potential mediation character of discussing the factors in a group-meeting. During the expert meeting the Analysis-of-Options approach structured the discussion and evoked interesting questions which may not have come up without explicitly stating the factors in the model. Experts representing different organizations also noted that they are already aware of interdependencies between each other, options and scenarios. They do not value the Analysis-of-Options for that (more scientific) reason. All in all, we can answer the main research question with yes. However, our analysis so far did not contain enough evidence to proof it scientifically, but we neither found proof to invalidate it. On the basis of our research it is hard to conclude whether the Analysis-of-Options provides useful insights for transition management as we only linked the information we get from the Analysis-of-Options to the information which is necessary in the first three steps of the decision-making process. The merits for this approach in combination to transition management are yet to be confirmed. More research has to be done to validate the potential of incorporating a higher level of detail. A real validation can only be done with hindsight, for instance by reviewing the benefits after the transition has succeeded. Also predictive computer models could be designed for the validation purpose.