Amid the recent furore over fracking everyone seems to have forgotten about shale’s renewable cousin - biogas. Energy Desk investigates how much biogas the UK is generating, the government policies in place and the prospects for the industry in the years to come.
According to the Anaerobic Digestion and Biogas Association (ADBA), anaerobic digestion is delivering over four times more electricity than solar PV. In Germany biogas is set to generate 4% of all power this year.
No one knows for certain how much of the UK’s shale can, or will, be extracted but a study commissioned by DECC based on current assumptions predicts shale will deliver 4.3% total gas demand in 2030 - though others suggest far higher figures.
A similar report by National Grid on the prospects of biogas found it could supply 5-18% total UK gas demand by 2020.
A quick reminder
Biogas is a mixture of 60% methane, 40% carbon dioxide. Most commonly it is generated via anaerobic digestion (AD) whereby biodegradable waste is broken down by micro-organisms in the absence of air. Food waste, sewage sludge and slurry are typical feed stocks but bioenergy crops are also used.
The digestate left over from the process can be used as a fertiliser, offsetting emissions associated with the application of synthetic fertiliser which accounts for roughly 5% of total UK GHG emissions.
Thermal gasification can also be used to generate biogas, although the technology is relatively nascent. Gasification offers the flexibility to generate power, biofuels or hydrogen.
How much?
The latest figures from the Official Information Portal for Anaerobic Digestion state that there are 109 non-sewage anaerobic digestion plants in the UK. 44% of these use food waste, 40% are agricultural using slurries and crops and the remaining 16% treat on-site waste at industrial plants.
(Click here for interactive map: http://www.biogas-info.co.uk/index.php/ad-map.html)
The industry has grown 136% from 2010-2012 and according to the Green Investment Bank generated 330GWh power in 2012. Back in 2011 there were only 54 non-sewage anaerobic digestion facilities. Today the plants process up to 5.1Mt waste per year and have an installed electrical capacity of over 88MWe.
In addition there are 146 anaerobic digestion plants in the water industry, which currently treats 66% of the UK’s sewage sludge with AD.
Britain’s biogas industry is dwarfed by Germany’s, which has over 7,500 anaerobic digestion plants boasting 3.35GW installed capacity. German biogas association FVB predicts the fleet will generate 24TWh of power in 2013 – 4% of all power production.
The UK’s first gasification plant is due to come online in 2014. Air Products’ 49MW facility in Teesside will use waste otherwise destined for landfill to power 50,000 homes.
How biogas is used?
At present almost all of the biogas in the UK is burned to generate electricity or heat at efficiency levels of around 30%.
Alternatively the biogas can be upgraded by removing CO2 and hydrogen sulphide, leaving ~98% pure biomethane. This can then be directly injected into the grid or used as transport fuel. A report by National Grid states that injection is the best option, as it would deliver renewable gas directly to households with heating at efficiency rates in excess of 90%.
Unlike other options such as district heating, biomass boilers and solar thermal; biomethane injection utilises the existing gas grid infrastructure. As such it avoids disruptive road works and forgoes the need to dream up clever incentives to coerce consumers into new heating installations.
In the UK just two anaerobic digestion plants are connected to inject biomethane into the grid. According to the Oxford Institute for Energy Studies, by 2011 Germany had 82 facilities, injecting a total of 275mcm gas into the grid and the government has ambitions of reaching 6bcm/year by 2020 (7% total gas consumption). The approach is also being used in France, Austria, Switzerland, Holland, Sweden and the USA.
Although it is not yet taking place compressed biomethane or liquid biomethane could be used for transport fuel. According to ADBA road transport accounts for 27% total UK GHG emissions, with HGV’s accounting for 3% alone.
The Carbon Trust has identified using biomethane in HGVs as the best use of biomass to reduce emissions. Trials of biomethane vehicles reduce GHG emissions by 50% and also produce 90% less particulate-matter emissions 75% less nitrogen oxide compared with typical diesel fuel vehicles.
Emissions?
The UK is committed to cut emissions at least 80% by 2050.
According to ADBA, electricity generated by anaerobic digestion releases 11g CO2/kWh – 45 times less than the current grid average of 500g CO2/kWh. The Institution of Civil Engineers report that in 2011 UK conventional gas averaged 363g CO2/kWh.
Meanwhile in its latest review on shale gas European Commission expects emissions to be 4-8% higher than conventional gas. Carbon capture and storage would be necessary to bring down emissions but has yet to be demonstrated at sufficient scale.
How much could there be?
In terms of feed stock for biogas, the UK produces 16Mt food waste and 90Mt animal waste each year as well as increasing quantities of energy crops and residues.
The study by National Grid found that if all waste was harnessed by anaerobic digestion and thermal gasification, biogas could meet up to 18% of the UK’s overall gas demand by 2020, equivalent to half domestic demand. This also assumes a significant contribution from bioenergy crops.
The baseline model (assuming waste still goes to landfill and isn’t appropriately sorted) suggests 5% total demand could be met. This equates to 5.6bcm/year by 2020, higher than the prediction for shale gas of 4.2bcm/year in 2030 by a recent report commissioned by DECC.
National Grid predict that the capital expenditure necessary to upgrade and inject biogas into the grid to meet this 18% delivery would be £30bn (although £20bn relates to the cost of waste infrastructure which must be built anyway due to diminishing landfill capacity and so is effectively a sunk cost).
Using figures from Bloomberg New Energy Finance, to achieve shale gas extraction of 4.2bcm/year would require around 1,000-2,000 wells. Taking BNEF’s drilling costs of roughly £6m per lateral would put the necessary capital expenditure between £6-12bn. This figure doesn’t include additional costs of building local pipelines and processing equipment to get gas to market.
Meanwhile ADBA predict that if all the available feed stock (food waste, farm slurries, purpose grown crops, sewage sludge) was treated through anaerobic digestion 40.4TWh (3.7bcm/year) of biogas could be generated. This is over 10% of domestic gas demand. ADBA believe the anaerobic digestion industry could be worth £2-3bn and could create 35,000 jobs.
The government’s predictions are less ambitious. A report commissioned by DECC and DEFRA expects 3-5TWh electricity from biogas (roughly 1% domestic demand) by 2020, based on the expectation that 5Mt food waste and 20-60Mt animal waste is processed by anaerobic digestion. 3.5TWh is enough electricity to power 900,000 homes and equates to GHG savings of 1.8MtCO2eq.
Government incentives
The economics of biogas is inextricably linked to government support schemes and will also depend on fuel prices and the price of carbon. At present there are a number of government incentives:
The Feed in Tariffs (FiTs) guarantees a price to AD plants using biogas to produce electricity. Facilities between 250-500kWe receive 14.02 p/kWh and facilities between 0.5-5MWe gain 9.24 p/kWh. The export tariff for feeding electricity back into the grid is currently 4.64 p/kWh.
Under the Renewable Obligation electricity suppliers are required to generate a certain proportion from renewables and accredited with Renewable Obligation Certificates (ROCs). Anaerobic digestion plants receive 2 ROCs/MWh until April 2015.
In 2014 the Feed-in Tariff Contracts for Difference (FIT CFD) will be introduced as the government phases out RO in 2017. New biogas generators coming online between 2014-17 can choose between ROCs and FIT CFDs. Under FIT CFD the draft strike price for anaerobic digestion starts at £145/MWh in 2014.
Both FiTs and RO encourage burning biogas to produce electricity. As argued by both the National Gird and ADBA this is a less efficient use of biogas than directly injecting it into the grid. It is hoped that the Renewable Heat Incentive (RHI), launched in 2011, will encourage increasing levels of biogas injection.
Under the RHI, biogas combustion up to 200kW scale receives 7.3 p/kWh. Biomethane injection receives 7.3 p/kWh. It remains to be seen whether this level of support is sufficient to drive the transition from biogas combustion to injection. But the news that the government could raise the threshold for combustion above 200kW does little to aid this cause.
Comment
The government could take a number of steps to provide further support to the biogas industry. Legislation needs to be introduced so that waste can be sorted and directed for anaerobic digestion and gasification.
Increased research and development particularly for gasification and biomethane-upgrade technologies would help drive down costs.
In terms of specifically encouraging biomethane injection, ADBA say that allowing an increase in the volume of oxygen in biomethane and also relaxing the calorific value requirement would encourage more direct injection into the grid.
With the right policies in place biogas could provide half our domestic heat, reduce landfill and help us achieve our climate change targets.
