challenges and opportunities of biomethane

Challenges and Opportunities

of Biomethane

Global Biomethane Congress 2012

Werner Hipper

Landwärme GmbH

9.10.2010

© Landwärme GmbH

Project developer & consultancy

focused on biogas

Founded in 2007 in Munich

15 employees

Main business area

Development of biogas and

biomethane projects for utilities and

bioenergy investors

Service Portfolio

Feasibility studies

Project acquisition

Upgrade and feed-in plants

engineering

Biomethane sales and marketing

Contract and project management

Certification

Financing strategies

Landwärme at a glance

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© Landwärme GmbH

Biomethane market

natural gas

CHP plants

natural gas

stations

gas

customers

upgrading as

grid interface

Over 7.000

biogas plants

gas grid

Over 50 TWh/a biogas

already available

European potential

of over 1.000 TWh/a

Gas consumption in

Europe at 3.000 TWh/a

German Biomethane

Goal:

60 TWh/a until 2020

Only ca. 100

upgrading

projects

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© Landwärme GmbH

Steps from biogas to biomethane

Raw biogas

55 - 65 % CH4

35 - 45 % CO2

< 2% air

H2S

Amoniac

Water steam

CO2 - separation

Desulphurization

Drying

Filtering

Biomethane

>96 % CH4

< 2% CO2

< 2% N2

Steps for grid feed-in

LPG addition

Pressurizing

Odorization

Upgrade

Around100 projects currently feed biogas into the German gas grid

Average feed-in capacity of 700 m³ / h biomethane

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Biomethane – A solution for the future

Contributes to climate protection

Reduces import dependency

Stimulates regional development

Is eco-friendly (multi-feedstock)

Secures material flow at local level

Is a natural process

Stabilizes the energy system

Uses existing infrastructure

Offers a variety of applications

Promotes CHP use

Is a highly efficient biofuel

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Complex value chain: Both opportunity and challenge

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German biomethane targets 2020: necessary projects

60 TWh

by 2020

1,000 plants

with 700 Nm³/h

Biomethane

(3,0 MWel)

2,000 plants

With 350 Nm³/h

Biomethane

(1,5 MWel)

6,000 plants

With privileged permit

(500 kWel)

or or

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© Landwärme GmbH

Costs & potentials of biomethane

Biogas Potentials in CEE

Biowaste usage in Germany:

– 0,5 TWh per 1 Mio. inhabitants

Agricultural waste & manure

– CEE ~ 35 TWh

– CIS ~ 50 TWh

Dedicated biomass on 10% of

agricultural area

– CEE: 4 Mio. Ha ~ 200 TWh

– CIS: 12 Mio. Aa ~ 600 TWh

Price range

fossil gas

Biomethane production costs

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© Landwärme GmbH

Biomethane Market

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Green gas market

Voluntary green gas products

Main Markets are Germany,

Netherlands, Switzerland,

Belgium & UK

Players are mainly independent

green electricity provider

Country regulations

Quota obligations for gas

customers, utilities or biofuels

Feed-in tariffs for biomethane

Feed-in tariffs for electricity from

biomethane

Tax reduction for biomethane as

fuel

Demand driven by green gas market & regulations

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© Landwärme GmbH

Voluntary green gas products

10% Quota obligations for gas customers

according to EWärmeG (BaWü)

30% Quota obligations for gas customers

according according to EEWärmeG

Tax reduction for biomethane as fuel

Quota obligations according to BioKG

Feed-in tariffs for electricity from biomethane

according to EEG

Demand drivers in Germany

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© Landwärme GmbH

Overview sales channels in Germany

Price at trading

point Amount Comment

Fuel Add on to natural gas of

up to 80 € / MWh

Up to 3.000

GWh / a

Sale of quota

complicated

EWärmeG ca. 60 € / MWh ca. 30 GWh / a Only in Baden-

Württemberg

Green gas ca. 60 € / MWh ca. 80 – 150

GWh / a Limited growth

EEG crop: ca. 75 € / MWh

waste: ca. 55 € / MWh

Serveral

thousand

GWh / a

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© Landwärme GmbH

History of German regulation supporting biomethane

Year Regulation Feed-in projects

2004 EEG: Feed-in tariffs for electricity from biomethane 0

2007 Energy concept: Biomethane goals: 60 TWh by

2020 and 100 TWh by 2030 4

2008

GasNZV: Privileged grid access & cost sharing with

grid operator

EEWärmeG: Quota obligations for new built houses

11

2009 Biofuel-quota: Biomethane can be used to fulfill

normal fuel quota, too 25

2010 EWärmeG: Quota obligations for renewed houses in

Baden-Württemberg 48

2012 EEG 2012: Higher feed-in tariffs for electricity from

biomethane 100

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Gas network access and tariff ordinance

Preferred network access

grid operators obliged to grant preferred grid access

grid access costs are split between grid operator and biomethane

supplier: 75 % to 25 %

For grid access with connecting pipeline of less than 1 km length, the

biomethane supplier’s access costs are never to surpass 250.000 €

avoided network costs due to the decentralised injection of 0.7 ct / kWh

from the grid operator

Preferred network entry & transportation

grid operators are to grant preference to biomethane transport clients

extended accounting balance

– flexibility of up to 25 percent

– biogas accounting time span of 12 months

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Regulations have different requirements for the production

Renewable heating

Limited methane emissions

According to G260, G262 & DIN 51624

Maximum methane emissions of 0,2 % during

upgrading of biogas

Only biomass according to the

biomass regulations

Certified sustainable biomass

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© Landwärme GmbH

Overview of different requirements of German subsidies

EEG EEWärmeG

(Germany)

EWärmeG

(BW) Biofuel-quota

Biogas from landfills or

sewage - X - -

Feed-in X Not defined X Not defined

Renewable heating - X - -

G260 & G262 indirect X indirect indirect

DIN 51624 - - - X

Sustainable biomass - - - X

Usage limitation German CHP plant - German

fuel station

Gas production

outside Germany - X X X

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© Landwärme GmbH

Overview of regulation for Biomethane

Country Germany Italy France Nether-

lands UK

Feed-in tariff No planned Yes Yes Yes

Fuel quota Yes planned No No No

Quota

obligations Yes No No No No

tariff for

electricity from

biomethane

Yes planned No No No

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© Landwärme GmbH

Visuals

Vielen Dank

Landwärme GmbH

Ungererstr.40

80802 München

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© Landwärme GmbH

Location Kaposvár, Hungary

Biomass Sugar beat

Biogas unit 2 fermenters á 13.500 m³

Gas

production

8.000 Nm³/h biogas for power plant

during harvest (Sep. - Dec.)

Upgrading

& feed in 1000 Nm³/h biomethane feed-in

Quality

criteria

G 260 und DIN 51624

Biomass sustainability criteria

Biomethane project in Kaposvár, Hungary

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© Landwärme GmbH

Projects in Germany

BGA Gangkofen

Biogas: NawaRo

Capacity: 350 Nm³/h

BGA Gröden

Biogas: Reststoffe


BGA Alteno

Biogas: Reststoffe


BGA Feldberg

Biogas: NawaRo


BGA Wittenburg

Biogas: NawaRo


BGA Zülpich

Biogas: Reststoffe


BGA Schulzendorf

Biogas: NawaRo


BGA Osterby

Biogas: NawaRo


BGA Marktoffingen

Biogas: NawaRo


BGA Reimlingen

Biogas: NawaRo


BGA Schwaigern

Biogas: NawaRo


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Introduction

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Overview of the legal situation in Germany

Special regulations on renewable energy

– Renewable Energy Sources Act ( Erneuerbare-Energien-Gesetz – EEG)

– Renewable Thermal Energy Act ( Erneuerbare Energien Wärmegesetz –

EEWärmeG)

– Biofuel Quota §37 BImSCHG ( Biokraftsoffquote laut §37 BImSchG)

– Market Incentive Programme ( Marktanreizprogramm – MAP)

Special regulations in biomass

– Biomass regulation (Biomasseverordnung – BiomasseV)

– Sustainability regulation ( Nachhaltigkeitsverordnung – BioNachV)

General energy law regulations

– Gas network access regulation ( Gasnetzzugangsverordnung – GasNZV)

– Gas network tariff regulation ( Gasnetzentgeltverordnung – GasNEV)

– DVGW regulations ( DVGW Regelwerke)

– Energy Industry Act ( Energiewirtschaftsgesetz – EnWG)

– Federal air pollution control act ( Bundes-Immisonsschutzgesetz – BImSchG)

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EEG for Biomethan-CHP

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General criteria

Biogas from biomass

Usage in CHP unit

Yearly balance of feed-in and gas

consumption

Feed-in in German gas grid

Gas quality according to G260 and

G262

For feed-in bonus

Maximum methane emission at the

upgrading of 0,2 %

Maximum electricity demand of the

upgrading of 0,5 kWh / Nm³

Heating of the biogas plant by

renewable heat

Criteria for EEG

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© Landwärme GmbH

Key facts on the EEG 2012

The commission of the electricity is guaranteed for the year of initial

operation and the subsequent 20 years at a fixed rate

Rohstoffklasse I: usual energy crops

Rohstoffklasse II: manure & material from environment protection

Direct usage of the electricity possible (market bonus)

Flexibility bonus of 130 € / kW per year for additional “over” capacity of

the electricity generating unit

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© Landwärme GmbH

EEG 2004 in € / MWh for biomethane

Item up to 150 kW or

1.314 MWh

up to 500 kW or

1.315 - 4.380 MWh

/ a

up to 5 MW or

4.381 - 43.800

MWh / a

up to 20 MW or

43.801 - 175.200

MWh / a

Base tariff* 116,7 99 89 84

Bonus for

dedicated crops 70 70 40 0

Feed-in bonus 20 20 20 0

CHP bonus 30 30 20 20

Total 236,7 219 169 114

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© Landwärme GmbH


Item up to 150 kW or

1.314 MWh

up to 500 kW or

1.315 - 4.380 MWh

/ a

up to 5 MW or

4.381 - 43.800

MWh / a

up to 20 MW or

43.801 - 175.200

MWh / a

Base tariff* 116,7 91,8 82,5 77,9

Bonus for

dedicated crops 70 70 40 0

Feed-in bonus

for 350 Nm³/h 20 20 20 0

CHP bonus 30 30 30 30

Total 236,7 211,8 172,5 107,9

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© Landwärme GmbH


Item up to 150 kW

or

1.314 MWh

up to 500 kW or

1.315 - 4.380

MWh / a

up to 750 kW or

4.381 – 6.570

MWh / a

up to 5 MW or

4.381 - 43.800

MWh / a

up to 20 MW or

43.801 - 175.200

MWh / a

Comment

Base tariff 143 123 110 110 60 Digression of 2%p.a.

+

Einsatzstoff-

vergütungs-

klasse I 60 60 50 40 0

Either

Klasse I or II Einsatzstoff-

vergütungs-

klasse II 80 80 80 80 0

+

Feed-in bonus

for 700 Nm³ / h 30 30 30 30 0

only for

biomethane

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© Landwärme GmbH

Bonus depending on the input

EEG 2004 & 2009

Nawaro (crops)

Not Nawaro = other biomass

EEG 2012

other biomass

Einsatzstoffklasse I

Einsatzstoffklasse II

Bonus depending on the size

of the upgrading

EEG 2004

No differences

EEG 2009

2 ct / kWh bonus up to 350 Nm³ / h


EEG 2012




Price relevant attributes of biomethane according to EEG

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© Landwärme GmbH

Renewable Energies Heat Act („EEWärmeG“)

Buildings erected after January 1st, 2010, are obliged to employ

renewable energies for their heat supply

Biomethane is one way to fulfill this obligation

Baden-Württemberg has its own version of this law (EWärmeG), applying

also to existing buildings

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© Landwärme GmbH

Demand generated by EWärmeG

Current form of EWärmeG in Baden-Württemberg:

Growth of demand for biomethane of 10 - 30 GWh per year

Demand of 0,1 - 0,3 TWh biomethane by 2020

Copy of BW-EWärmeG to national level:

Growth of demand for biomethane of 70 - 200 GWh per year

Demand of 0,5 - 2 TWh biomethane by 2020

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© Landwärme GmbH

Market situation

Green gas in Germany

ca. 100.000 customers

ca. 1.500 GWh sold in 2011

Of which ca. 80 - 150 GWh was biomethane

Competing green products like „climate gas“

Market share

LichtBlick is leader with a market share over 60%

Naturstrom, EnBW and Saubergas each with few thousad customers

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Usage of biomethane for quota fullfillment

Usage Market volume Pricing

Avoidance of

penalty up to 5 TWh / a penalty at 68 € / MWh(Hs)

Replacement of

biodiesel quota

biodiesel quota from B 100

around 2 - 3 TWh / a

minimum price at

30 - 35 € / MWh(Hs)

Reduction of

biodiesel

blending

up to 5 - 8 TWh / a

difference of buying biodiesel

to intern cost of producing

diesel

ca. 40 – 55 € / MWh(Hs)

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© Landwärme GmbH

Price level for usage of biomethane

Max. Price depending

on penalty

0

10

20

30

40

50

60

70

Vermeidung von Pönalenzahlung

Ersatz von B100-Tickets

Reduktion der Biodieselbeimischung

Pre

is B

iom

eth

an

ticket in

€/

MW

h(H

s)

Market price

Avoidance of

penalty

Replacement of

biodiesel quota

Reduction of

biodiesel blending

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© Landwärme GmbH

MÖK MÖK

Structure

trader Quota

MÖK MÖK Gas

station

Sale of

quota

Quota fullfillment

Sale of

biomethane

4,5 ct / kWh

2,5 ct / kWh

Biomethane

producer

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© Landwärme GmbH

Netherlands

Biomethane injection is supported by the stimulering duurzame energie

(SDE+) scheme, the most important measure promoting renewable

energy in the Netherlands. The SDE + scheme, replacing the former SDE

scheme, provides a feed-in subsidy covering the difference between

production costs and income such as energy price.

The subsidy tariffs are adjusted annually according to the market price

development of fossil natural gas every year to ensure the plant operator

receives the same feed-in tariff for 12 years.

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© Landwärme GmbH

UK

Biomethane combustion, except from landfill gas gets 7.1 p / kWh

HI payments are made to the owner of the heat installation over a 20 year

period and tariff levels have been calculated to bridge the financial gap

between the cost of conventional and renewable heat systems. The

scheme is administered by Ofgem.

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© Landwärme GmbH

Sweden

Biogas and biomethane producers also benefit from measures such as

requirement of retailers to sell at least one renewable motor fuel or 5

years exemption from vehicle tax for environmental cars (meaning

vehicles emitting below 120 g/km CO2).

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© Landwärme GmbH

Italy

Förderung von Biomethan:

1. Das eingespeiste Biomethan unter den Bedingungen von Art. 20

soll wie folgt gefördert werden:

a) durch Stromproduktionvergütung wenn Biomethan genutzt wird

wenn dieses Strom in KWK-Anlagen benutzt wird

b) durch die Quotenerfüllung laut Dekret von Januar und März 2006

solange Biomethan dafür eingesetzt wird und dieses Biomethan

dann für den Transport genutzt wird

c) Einspeisevergütung wenn das Biomethan ins Gasnetz eingespeist

wird

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© Landwärme GmbH

France

The principle for purchase obligation of biomethane when injected into the

natural gas grid was adopted by the French Parliament on the 12th of July

2010 as part of the Grenelle 2 law.

15 Jahre

http://www.injectionbiomethane.fr/

Tarif liegt zwischen 4,5 und 9,5 ct/kWh, nach der Größe der Anlage.

Bonus für bestimmte zwischen 2 und 3 ct/kWh.

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http://www.injectionbiomethane.fr/

challenges and opportunities of biomethane

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