Energy Substitution Rates and Energy Policy Analysis on Nova Scotia Dairy Farms

Abstract

This paper analyzes energy substitution rates on dairy farms in Nova Scotia (NS), Canada. A transcendental logarithmic cost function is used to find the elasticities of substitution which are utilized to determine the substitutability of total farm energy and to determine feasible renewable energy (RE) technologies. Wind turbines are found to be the only feasible RE technology for dairy farms within the region, at this time. A review of on-farm RE production and the associated feed-in tariff (FIT) policies in Germany, USA, Canada, Denmark and the Netherlands are examined. The NS FIT policy is used as a case study to assess the effect policies may have on wind turbine implementation by NS farms. Several scenarios are developed based on the existing policy structure to provide a critical review of the policy and to identify methods to provide an increase in the implementation of wind turbines on NS dairy farms.