Biogas has been promoted as a renewable, cleaner and cheaper energy source.While there are several initiatives promoting the use of biogas, credible analyses of its effects on the use of alternative energy sources and energy related expenditure are limited. This study uses panel data from households engaged in dairy farming in rural East Java to assess the impact of a household level programme, which promotes the construction of digesters that produce biogas, on energy use and expenditures. Both a difference-in-difference analysis and a pipeline comparison show that the use of digesters leads to a sharp reduction in energy related expenditures and a reduction in the use of firewood and liquefied petroleum gas. However, without subsidies, the payback period of between 11 and 14 years, albeit based only on reductions in energy costs accruing frominvesting in a digester, is perhaps too long to justify the investment.

Additional Metadata
Keywords Energy policy, Renewable energy, Biogas, Indonesia
JEL Energy: General (jel Q40), Alternative Energy Sources (jel Q42), Government Policy (jel Q48)
Persistent URL dx.doi.org/10.1016/j.eneco.2017.09.006, hdl.handle.net/1765/104217
Journal Energy Economics
Citation
Bedi, A.S, Sparrow, R.A, & Tasciotti, L. (2017). The Impact of a Household Biogas Programme on Energy Use and Expenditure in East Java. Energy Economics, 68(Oct), 66–76. doi:10.1016/j.eneco.2017.09.006