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Biogas as the cornerstone of the energy transition

Interview with Horst Seide, President of the German Biogas Association

"You won't find the word biogas in the German government's power plant strategy" - this is how Horst Seide, President of the German Biogas Association, describes the situation in his industry in the run-up to EnergyDecentral 2024, which takes place in Hanover, Germany, from 12 to 15 November. In an interview with the DLG (German Agricultural Society), Seide calls for a clear signal in favour of biogas and provides insights into the technologies that will be on show at the exhibition centre in Hanover.

EuroTier 2024 and the Inhouse Farming - Feed & Food Show will be held in parallel as an ideal complement.

DLG: Mr Seide, let's talk about the role of biogas in the energy transition. In principle, biogas plants should work well with wind power, photovoltaics and the heat transition. Whenever the wind dies down or there is no sunshine, these plants could step in and take over power generation ...

Horst Seide: ... and the resulting waste heat could be stored and fed into heating networks. Nevertheless, there are currently hardly any initiatives on the part of politicians to develop the potential of existing biogas and biomethane plants in this direction - despite the advancing climate change. In the electricity sector, where biogas has its highest share, things are not looking good at the moment. We have a large number of plants here that need follow-up funding.

What figures are we talking about here?

There are still just under 10,000 plants with a total output of around six gigawatts, which generate over 33 terawatt hours of electricity per year. That corresponds to around six percent of electricity consumption in Germany and the same amount of heat, which is mainly used in rural areas. For hundreds of plants, the remuneration period for the Germany Renewable Energy Act (EEG) will end in the next few years - and the recent tendering rounds for a follow-up remuneration have been oversubscribed three times over.

One of your demands is for more decentralised biogas plants instead of new gas-fired power plants. What role could biogas play in the German energy supply?

It would be possible to double the current output to twelve gigawatts by 2030 without any problems. By 2040, the output could even be increased to 24 gigawatts. Biogas can do everything that fossil liquefied natural gas (LNG) can do and, compared to hydrogen imports, is available not only on-demand but also regionally. Nevertheless, the word "biogas" is nowhere to be found in the German government's power station strategy.

Members of the Bundestag recently responded to the industry's demands and introduced improvements for biomass with the "Solar Package I" ...

The solar package addresses many regulatory obstacles. The pro rata deferral of unutilised volumes from the biomethane tender is undoubtedly an option that will help some existing plants in the coming years. The cancellation of the southern quota and the southern region for the upcoming biomass and biomethane tendering rounds as well as the abolition of the minimum retention time for fermentation substrates in the gas-tight system are also encouraging. However, in view of the threefold oversubscription of the biomass tender last year, this is not enough. There is still a fundamental need to revise the Renewable Energy Sources Act (EEG).

Does this mean that the dismantling will continue almost unchecked?

To put it bluntly: without a significant increase in tender volumes in the regular segment, it will not be possible to maintain the biogas plant portfolio at its current level. At least 1,800 megawatts are needed annually in the biomass tender alone to stabilise the existing plant fleet. At the same time, biogas plants must be led into a more flexible future. In order to incentivise the conversion of biogas plants, the flexibility surcharge must be adjusted to inflation and higher interest rates and increased to at least 120 euros per kilowatt.

Do you think that doubling the output of biogas plants is even feasible under these conditions?

I think it is absolutely essential. And even a doubling is not enough in my opinion against the background of the REPowerEU strategy to end Europe's dependence on fossil fuel imports. The more renewable alternatives are expanded, the more urgent the question becomes: who will provide the energy to compensate for the fluctuations in wind and solar energy? The question of storage is therefore essential.

A look at this year's EnergyDecentral shows that battery storage systems have recently experienced rapid growth ...

Electricity storage systems will play a key role in ensuring a stable grid in the future. But here too, development is lagging behind the planned expansion of photovoltaics and wind power. Irrespective of this, biogas plants also offer advantages in terms of storage, as they can keep biogas and biomethane in stock for longer and on a seasonal basis. This means that the amount of electricity generated by the plants can be distributed much better in flexible operation that is adapted to the wind and solar power supply: through additional gas storage and more engines.

Experts call this principle "overbuilding" because more engines are installed than the biogas plant could supply around the clock ...

In this way, biogas plants, which were originally designed as continuous runners to produce base load, become highly flexible systems that are only used occasionally when the sun is not shining and the wind is not blowing. This would make the construction of new natural gas power plants superfluous and other back-up systems would have to be started up less frequently. To achieve this, the plants would need more powerful combined heat and power plants, larger gas storage facilities and larger heat storage facilities that can supply municipalities with climate-friendly heat. A recurring question at the stands at EnergyDecentral is therefore how to optimise the superstructure.

By 2030, 30 percent of municipal heating networks are to be supplied with heat from renewable energy sources or unavoidable waste heat, and by 2045 this should be the case completely. What role do biogas plants in Germany, which are mostly operated by farmers, play against this backdrop?

Basically, we have to distinguish between two options here: On the one hand, heat generated from biogas using combined heat and power (CHP) directly at the biogas plant. In 2023, over 14 terawatt hours of heat were provided in this way in Germany. This means that CHP plays a key role in the municipal heating transition.

More than half of the biogas plants in Germany are currently dedicated to this task ...

So if there are no more biogas-fuelled plants connected to a heating network in the future, then the targets for the heating transition in rural areas will fall. The second option we are talking about is the upgrading of biogas to biomethane. In 2023, around 4.9 terawatt hours of heat were generated from biomethane using combined heat and power plants or combustion plants connected to the natural gas grid.

Biomethane can be fed directly into the grid. This makes it interesting for consumers with a gas heating system ...

Yes, but we are talking about a growth market at a very low level. Biomethane currently has a share of just one per cent in the German natural gas grid and therefore does not play a major role in the heat supply. Most of it is converted into district and local heating and electricity in combined heat and power plants. In total, the amount of heat provided from biogas and biomethane in 2023 covered the needs of 1.8 million households.

Wherever wind and solar power cannot be used directly, green hydrogen comes into play as a storable energy carrier. What potential do you see here?

There are now a number of processes that are suitable for producing hydrogen from biogas. For the most part, these are still in the development phase or are being operated on a pilot scale. One alternative to the production of hydrogen using electrolysis is, for example, the production of hydrogen from biogas using steam reforming. Another possibility is power-to-gas (PtG) concepts for biogas plants in the vicinity of wind power and photovoltaic plants in order to convert surplus electricity into storable, gaseous energy sources. I expect EnergyDecentral to provide new and exciting approaches, particularly in the area of sector coupling.

What could such a power-to-gas approach look like?

In concrete terms, such a concept could involve wind turbines supplying the electricity for an electrolyser that breaks down water into oxygen and hydrogen. The biogas plant in turn supplies the raw biogas, the CO2 content of which reacts with the hydrogen in a reactor to form biomethane.

You have already mentioned it: Two years ago, the European Commission presented "REPowerEU", a strategy to reorganise the European energy system. The aim is to reduce dependence on fossil fuels from Russia and accelerate the transition to climate-neutral energy ...

An integral part of the strategy is an action plan to increase EU biomethane production to 35 billion cubic metres per year by 2030.

Innovation and financial support to increase biogas production will play a key role.We need around 5,000 new biogas plants to achieve the ambitious EU target.

Do you think the EU's target is realistic?

Yes, within the EU we can see that neighbouring countries such as France are in the process of massively expanding the biogas and biomethane sector. Germany also managed to build around 6,000 biogas plants in less than ten years after 2006.

That sounds like a clear prospect for the future of bioenergy ...

But what we are currently doing is definitely not enough. After all, the 30 or so biogas plants that were shut down in Germany in 2022 were offset by just over 100 newly built biogas plants. Too many legal obstacles and slow approval procedures are hindering the necessary expansion of biogas utilisation in Germany.

Is there a risk that Germany will also be left behind technologically?

Provided that development in Germany continues as before and subsidies remain as restrictive as they are now: Yes. The predominantly medium-sized companies in the sector are among the leading drivers of innovation in Europe. The majority of them exhibit at the trade fair centre in Hanover. However, there is a risk that this expertise, which has been built up over 20 years, will increasingly be transferred abroad, as, in contrast to Germany, biogas continues to be favoured there.

How can biogas plants continue to be operated economically when the EEG subsidy expires? What advice do you have for farmers who are now looking for solutions?

Unfortunately, there is no standardised answer to this question. Because biogas plants are so different, everyone should first analyse their biogas plant and then develop a business model in a second step. In the long term, many old plants could certainly be converted to biomethane production.

Another issue facing farmers is the topic of carbon management. What opportunities does biogas offer for negative emissions?

Biogas is ideally suited for this, as energy generation from biomass combined with the capture and storage of carbon dioxide can permanently remove biogenic carbon from the atmosphere - and negative emissions are created. Farmers can remove carbon dioxide from the atmosphere at the lowest cost and with different concepts. At many plants with newer technology, there is already a pure CO2 waste gas stream that can be captured with relatively little energy input. This topic is likely to become even more important at EnergyDecentral.

So does emissions trading offer biogas plant operators another business model?

Of course, this requires investment in existing plants. The funding promised by the Federal Ministry of Economics as part of the new carbon management strategy can help to finance the acquisition and integration of the necessary technologies. When this market becomes established, the revenue from energy production will take a back seat, as the proceeds from certificate trading will be many times higher. At the same time, capturing CO2 via biogas plants is significantly cheaper than other carbon capture and storage methods. What is needed now is a political framework that makes all this possible.