UK Biomethane Market Update 50 Plants Injecting Gas by End 2015 15th June 2015 John Baldwin Managing Director CNG Services Ltd john.baldwin@cngservices.co.uk www.cngservices.co.uk 07831 241217
UK Biomethane Market Update “w e have scratched the surface” 1. Biomethane Journey o 2006 – 2010 o 2011 - 2015 2. 2013 – 15 Market Statistics 3. Selected projects 4. Benefits and Market Forecast 5. Conclusions The fastest growing renewable technology?
BIOMETHANE JOURNEY REMINDER FROM UK BIOMETHANE DAY 26 JUNE 2012
Why Biomethane Injection? • In 2007 we said: • Biogas CHP often cannot use its waste heat • UK has invested around £30 billion in its gas grid and even more in appliances and central heating • To meet EU Renewable Energy targets, we need to use resources efficiently • So, take the renewable methane to where it can be used efficiently…..using the gas grid 1
2006 - 2008 • December 2006 – WRG – Wakefield – Proved that vehicles could run on biomethane but this was not practical due to vehicle fill patterns and far too much gas – needed gas grid injection • REA’s initial concept was for “equivalence” – Otherwise no point injecting biomethane – Gaynor thought it seemed a good idea! • Nov 2007 – Feb 2008 – United Utilities – Feasibility Study for Grid Injection – National Grid strongly in favour
2008 - 2010 • Renewable Heat Incentive in Energy Act: – In November 2008, REA concept of a premium for biomethane injected into grid accepted by DECC • April 2009: – Proposal to Thames Water and SGN re Didcot flared gas project • October 2010: – First biomethane injection from Thames Water’s Didcot plant • REA work with DECC on RHI tariff levels to be set to give equivalent returns to those from electricity generation • Visits to other EU countries, especially Germany and Sweden – Sweden has not much gas grid and lots of hydro so misleading – Germany has ‘expensive and slow’ regulations Didcot proved it could be done
2011 - 2012 • Not for Profit REAL Green Gas Certificate Scheme launched: – April 2011 • Poundbury BtG Project identified: – Start in June 2011 – Biomethane injection by Oct 2012 • Renewable Heat Incentive introduced: – November 2011 tariff of 6.7 p/kWh • EMIB review to bring down costs of entry and simplify processes: – Sept 2011 – May 2012 • HSE Gas Quality: – Agreed change in Oxygen limit to 1%, in place in Q2 2012 Poundbury 2012 was a key milestone
2006 – 2012 Conclusions • In 2012, we said • It has taken 6 years but we have: – Attractive RHI tariff for projects starting in 2012 – Good regime that reduces costs, saves time and supports innovation This is the growth in – ‘Not for profit’ Green Gas Certificate Germany from start Scheme that facilitates biomethane in 2006...we can follow sales this path – Competitive supply chains starting to develop So what has happened since 2012?
BIOMETHANE JOURNEY HOW HAVE WE PROGRESSED SINCE 2012? END 2015 STATS
Biomethane projects per year 2010-2015 1 in 2012, 2 in 2013, total of 50 projects injecting gas by end 2015
Proportion of Projects in Each Feedstock Category GGG Feedstock Category Number projects in Category % Sewage Sludge 5 10% Agricultural 29 58% Food Waste 11 22% Food Processing 4 8% Biodegradable 1 2% Unknown 0 0% Total Projects 50
Proportion of Projects in Each GDN area GDN Number of Projects % NG 17 34% SGN 16 32% WWU 12 24% NGN 5 10% Total Projects 50
Proportion of Projects by Biogas Flow-rate Biogas Ncmh Number of Projects % 0 - 400 3 6% 400 - 800 8 16% 800 - 1200 29 58% 1200 + 10 20% Total Projects 50
Proportion of Projects by CO2 Removal Technology Technology Number of Projects % Water Wash 13 26% Membrane 34 68% Chemical Wash 3 6% TBC 0 0% Total Projects 50
Annual Biomethane to Grid and RHI for 2012-2015 Note – RHI commitment is max based on capacity, actual lower in 2015 due to project build up Biomethane to grid is RHI technology with highest kWh
BIOMETHANE JOURNEY SELECTED PROJECTS
Poundbury UK’s first commercial project
Vale Green Tomatoes just love CO2
Saria Widnes Is this the largest food waste to biomethane plant on earth???
Severn Trent Water Minworth Inject to LTS, no propane needed……and highly energy efficient solution
Greener for Life Fraddon Most westerly food waste to biomethane plant in EU!
Wyke Farms Most sustainable cheese in the UK….
Welsh Water Five Fords Launched project May 2014, injecting gas April 2015
Geneco Avonmouth Is this the best PR ever for a biomethane project in UK?
Raynham National Grid – 19 bar Hexel One (Plastic) pipe
Euston Remote compression into 42 bar LTS
BIOMETHANE JOURNEY BENEFITS AND MARKET FORECASTS
Benefits – Using the Gas Grid • UK has great gas grid – 85% of domestic market connected to grid – 95% of industry – Power generation back up to wind • To build gas grid and central heating etc would cost around £60 - 100 billion • All our Grid Owners are very supportive and have created an attractive regime to allow projects to go ahead at lower cost/quicker
Benefits - CO2 Impact • Forecast 2 TWh injected into gas grid in 2016 • 140,000 tonnes of gas • 140 x (44/16) = 385,000 tonnes of CO2 saved at the burner tip • Marginal gas to UK is Qatar LNG • The 140,000 tonnes of biomethane displaces 140,000 tonnes of LNG – 15% higher CO2 than UKCS gas on a “Well to Tank” basis – 7% CO2 vented in Qatar – So around 50,000 tonnes on top • So, around 430,000 tonnes/annum benefit • Material contribution towards 2020 renewable energy targets • And we have only scratched the surface….
Benefits – Investment and Jobs • 50 projects by end 2015 • Capex £6 - £20 Million • Estimated total capex of around £500 Million • Increasing % of UK supply chain – estimated 70% • Job Survey needed to support continuing DECC investment
Biomethane Market Forecast • UK total gas demand now is around 750 TWh/annum • Around 50% domestic heating, 25% power gen and 25% industry • Biomethane by 2030 is around 20 TWh, though we have only scratched the surface….. • For heat in cities there are few practical/economic alternatives • Biomass (air quality), heat pumps (do not work in very cold weather), district heating (too late to dig up cities)
Biomethane to Grid Conclusions • Over 50 projects by end 2015, further 100 by end 2020 if tariffs OK • 46 projects completed in period 1 June 2014 to 31 Dec 2015 • Around 2 TWh by end 2015 • UK total gas demand 750 TWh • 140,000 tonnes of LNG not imported • Focus on reducing capital and operating costs • No Letter of Direction • Tariff fixed • Competition as established supply chains • Lower cost of finance? • To be discussed tomorrow….. UK biomethane market growing fast, delivering significant benefits and helping meet 2020 renewable energy targets
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