Market development of biomethane in the UK Berlin, 22nd March 2017 Gaynor Hartnell Renewable Energy Association REA Biogas
Overview of talk Putting Biomethane in context: as a form of biogas Evolution of biogas deployment Evolution of policy mechanisms Drivers for those policy mechansims The Renewable Heat Incentive Deployment trends Future challenges and opportunities
Biogas and biomethane what is it? Biological process CO 2 and CH 4 Thermal process CO and H 2 LFG (landfill gas) Dedicated AD SG (sewage gas) Gasification & pyrolysis CO 2 removal Methanation reaction Biomethane
Evolution of biogas technology LFG & SG Dedicated AD Biomethane injection BioSNG (Methanation of NBPH)
Deployment continued LFG 452 projects, totalling 899MW Sewage gas 165 projects, totalling 211MW 470 AD power plants (~ 389MW) 80 Biomethane projects with capacity of ~ 46,860 (Nm3/hr) 1 BioSNG injection project
Evolution of policy mechanisms First plants in NFFO (1990 98) LFG, SG and some AD The RO (2002 2017) Little if any deployment The Feed In Tariff (2010 onwards) Major expansion of AD The Renewable Heat Incentive (2011 onwards) Major expansion of biomethane
Drivers for policy mechanisms First plants in NFFO (1990 98) LFG, SG and some AD Privatisation of the electricity supply industry and the need to subsidise nuclear energy The RO (2002 2017) Little if any deployment The Feed In Tariff (2010 onwards) Major expansion of AD A new administration s continuation of support for renewables, and then the RED The RED and recognition that more diversity was needed in the nature of promoters of RE schemes The Renewable Heat Incentive (2011 onwards) Major expansion of biomethane The RED and that renewable electricity alone would not enable UK to meet targets
The Renewable Heat Incentive Started in 2011 Supports a range of RE technologies, including Biomethane injection Biogas combustion Biomethane can either be made from biogas or syngas The wording in the legislation which gives rise to this is rather a botch. Biogas itself does not have a definition in the RHI legislation, but the regulations define a biogas production plant as follows biogas production plant means a plant which produces biogas by anaerobic digestion, gasification or pyrolysis;
The Renewable Heat Incentive The RHI operates in a very different way for biomethane injection, than for other heat technologies. The payment is made for each kwh of renewable gas injected into the distribution network it can therefore be very easily measured and is effectively a feed in tariff for renewable gas. (Other technologies are paid according to meter readings of useful heat production (i.e. heat used for eligible purposes)). Only sustainable biomass can be used to produce biogas
Green House Gas Criteria Biomethane must have lifecycle greenhouse gas emissions of less than or equal to 34.8 grams of carbon dioxide equivalent per megajoule of biomethane (measured as the net calorific value) Fuel Category Waste GHG criteria Biogas or biomethane made wholly from feedstock which is waste. This is deemed to meet the sustainability requirements. No Calculations are required on GHG emissions. Residues Emissions during and from the process of collection only. (This includes processing residues and residues from agriculture, forestry, arboriculture and aquiculture). Products, coproducts Full life cycle GHG emission calculations are required. Energy crops would fall under this category.
Sustainable biomass land criteria Fuel Category Waste Residues: Agriculture Forestry Arboriculture Land criteria Deemed to be met Reporting required Reporting required Deemed to be met Must avoid biomass from primary forest, designated for nature protection purposes or peatland (At any time during or after January 2008) highly biodiverse grassland a former continuously forested or wetland area Aquaculture and fisheries Deemed to be met Products, coproducts Reporting required
Ofgem generally has regard to the EC s guidance on definitions of wastes and residues Wastes - any substance or object that the holder discards or intends or is required to discard (re Waste Directive) Processing residues - a substance that is not the end product(s) that a production process directly seeks to produce. It is not a primary aim of the production process and the process has not been deliberately modified to produce it. (re EC communication (2010/C 160/02) Agriculture, aquaculture, fisheries and forestry residues are materials generated in the process of harvesting the material being sought. Once removed from the point of harvest and processed elsewhere, any residues generated from this are considered processing residues Arboricultural residues - material from woody plants and trees planted for landscape or amenity value that are removed as part of tree surgery usually in gardens, parks or other populated settings, and utility arboriculture such as the verges of roads and railways and should not include forestry residues
Biomethane tariffs to be reset this spring Recent government consultation proposed a reset as they had degressed too low to encourage future deployment Tier First 40,000 MWh (Tier 1) Next 40,000 MWh (Tier 2) Remaining MWhs (Tier 3) Current tariff p/kwh Reset tariff p/kwh Reset tariff Euros 3.89 5.35 6.17 2.29 3.14 3.62 1.76 2.42 2.79
RHI tariffs history of degression All tariffs are in p/kw Tier 1 Tier 2 0-40,000 MWh 40,001 80,000 1st Jan 12th Feb (before tiering) 6.99 Tier 3 80,001 and over 12th Feb 1st April 2015 7.71 4.52 3.49 Instead it will be the new higher reset tariffs. 1st April 1st July 2015 7.71 4.52 3.49 1st July 1st Oct 2015 7.33 4.3 3.32 1st Oct end of year 2015 6.6 3.88 2.99 However, plants commissioning under these new tariffs will have to comply with the new Energy Crop Cap 1st Jan 1st April 2016 5.94 3.49 2.69 1st April 1st July 2016 5.35 3.14 2.42 1st July 1st Oct 2016 4.55 2.67 2.06 1st Oct end Dec 2016 4.32 2.54 1.96 1 st Jan 2017 31 st March 2017 3.89 2.29 1.76 1 st April 2017 3.56 2.10 1.61
Energy crop cap
The Energy Crop Cap Fuel Category Waste Residues Products, coproducts Are the RHI payments limited? All biomethane (or biogas) produced from these feedstocks are entitled to full payments from RHI (or the Feed In Tariff) As above Biomethane (or biogas) produced from these feedstocks are limited to 50% of the overall gas produced
Deployment trends Projects 120 Biomethane Projects per Year Projects per Year Speculative Cumulative 100 80 81 96 60 52 40 28 20 0 4 1 1 2 2010 2011 2012 2013 2014 2015 2016 2017 77 projects by Oct 2016 and could build 100 before 2018 14
UK Biomethane Projects 2012-16 2012 2013 2014 2015 2016
Deployment trends - feedstocks Feedstock type Number Proportion of production Agricultural 49 62% Food waste & biodegradable waste 18 27% Sewage sludge 9 11%
Technology used Proportion of projects by CO 2 removal technology 7 4 3 22 Water Wash Membrane Chemical Wash PSA TBC 43
Deployment trends by pressure tier Pressure Tiers Medium pressure Lowest pressure tier used, no need for additional compression Very high coverage across UK, but can be capacity issues in rural areas Intermediate pressure 6.9bar no need for additional compression Good coverage across UK Usually have good capacity Local Transmission System >12bar to 70bar Usually 19 bar or 38 bar systems Very rarely has capacity issues unless very large biomethane plant
Propane enrichment In future could customers be billed on a CV basis? National grid is looking into this
Threats / concerns Methane leakage methodology being developed, with intention of testing around 30 projects Increasing tightening of landspreading of digestate- more storage capacity may be required Implementing the energy crop cap Pressure to implement the waste food hierarchy
Waste food hierarchy
Opportunities Consultation on renewable transport fuel obligation changes biomethane may be regarded as a development biofuel Green Gas Certificates recognised by Greenhouse Gas Protocol Biomethane has a role in decarbonising sectors which are otherwise hard to reach (heating particularly in cities, transport particularly in HGV sector) Wider implementation of separate food waste collection Consumer demand for green gas?
UK NGV focus is trucks and buses 353 natural gas trucks 348 dual fuel trucks 5 dedicated gas trucks 26 new or upgraded refuelling stations CNG Market UK funding for Natural Gas Vehicles 3 gas projects among 20 million worth of funding in Low Emission Freight and Logistics Trial announced 2 gas projects among winners of Low Emission Bus Scheme, 2016 to 2017 Green Gas Certificates CNG for trucks and buses and CHP/District Heating for new housing/stores GGCS scheme not for profit scheme is helping to facilitate biomethane projects
Green Gas Certification Scheme Injecting the gas directly into the grid at source is more reliable than taking it to the point of use by other means. The Green Gas Certification Scheme tracks biomethane injected into the grid in one location to where it is taken out and used in another. This tracking ensures that each unit of gas taken out of the grid matches exactly a unit of gas injected and ensures that there can be no duplication or double counting
http://www.greengas.org.uk/ 29 producers registered injection capacity of just over 1.5 TWh per annum. See www.greengas.org.uk/certificates 27 suppliers registered (includes 4 NL, 1 in Switzerland, 1 FR, 1DE) See www.greengas.org.uk/certificates/f or-sale
A recent breakthrough for the GGCS large corporates can use GGCS certificates in their reporting under the GHG protocol September 2016 GGCS got confirmation that:- Companies can now report near-zero GHG emissions for gas combusted onsite due to the biogenic nature of the biomethane being sourced (scope 1) If reporting upstream GHG emissions (i.e. scope 3) certificate wording The lifecycle emissions associated with the production of this biomethane is no more than 125g CO 2 equivalent per kwh Further info www.greengas.org.uk/certificates/emissions
Find maps on www.r-e-a.net/resources
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Gaynor Hartnell Gaynor Hartnell Senior Energy Advisor Biogas ghartnell@r-e-a.net www.r-e-a.net