Expanding biogas markets

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Expanding biogas markets

  1. 1. NNFCC Expanding Biogas Markets The potential for anaerobic digestion in the UK Lucy Hopwood Head of Biomass & Biogas November 2011The UK’s National Centre for Biorenewable Energy, Fuels and Materials
  2. 2. NNFCC UK Renewable Energy Targets • Renewable Energy Strategy (RES) – UK RED delivery plan – 15% renewable energy by 2020  10% transport fuels  14% heat  32% electricityThe UK’s National Centre for Biorenewable Energy, Fuels and Materials
  3. 3. NNFCC UK Progress to Date UK Energy Production vs. 2020 Targets Transport = 10% by 2020 2006 2010 Heat = 14% by 2020 2020 Electricity = 32% by 2020 0 5 10 15 20 25 30 35 Energy contribution (%)The UK’s National Centre for Biorenewable Energy, Fuels and Materials
  4. 4. NNFCC Biogas Contribution - presentThe UK’s National Centre for Biorenewable Energy, Fuels and Materials
  5. 5. NNFCC Anaerobic Digestion: Key Facts  The UK has 214 anaerobic digestion plants, as of 30th September 2011  Processing capacity of >5 million tonnes per annum  Installed capacity of >170MWe  Two biomethane injection plantsThe UK’s National Centre for Biorenewable Energy, Fuels and Materials
  6. 6. NNFCC Biogas Map = 24 Farm-Fed plants + c.54 plants with planning consent Last updated 04 November 2011 Plus 146 existing sewage treatment facilities = 44 Waste-Fed plants + c.64 plants with planning consent Last updated 04 November 2011 www.biogas-info.co.ukThe UK’s National Centre for Biorenewable Energy, Fuels and Materials
  7. 7. NNFCC Biogas Contribution - futureThe UK’s National Centre for Biorenewable Energy, Fuels and Materials
  8. 8. NNFCC Resource Availability Food Waste ≈ 16 Mt/y ! Purpose Grown Crops… ≈ 8.3 Mt/y household ≈ 6.3 Mt/y commercial & industrial “…Government policy is to deliver an increase in energy from waste through AD.” ≈ 1.3 Mt/y food service & retail “We recognise that at farm-scale, some Agricultural Waste ≈ 90 Mt/y energy crops may be required…and that such crops can be grown as part of the ≈ 13 million cattle normal agricultural rotation. Furthermore, ≈ 33 million sheep there is land available which is not suitable ≈ 4 million pigs for the production of food crops but which ≈ 166 million chickens may, therefore, be used to supply energy- crop only AD plants.” Sewage Sludge ≈ 1.73 Mt/yr “It is not our policy…to encourage energy crops-based AD, particularly where these are grown to the exclusion of food producing crops.”The UK’s National Centre for Biorenewable Energy, Fuels and Materials
  9. 9. NNFCC Build Rates for AD – UK Source: ARUP, 2011The UK’s National Centre for Biorenewable Energy, Fuels and Materials
  10. 10. NNFCC AD Potential – UK to 2030 “…AD could deliver between 3–5 TWh of =5.6TWh electricity by 2020” AD Strategy & Action Plan, 2011 =3.0TWh =1.8TWh Source: ARUP, 2011The UK’s National Centre for Biorenewable Energy, Fuels and Materials
  11. 11. NNFCC Current Government Support - Policies & IncentivesThe UK’s National Centre for Biorenewable Energy, Fuels and Materials
  12. 12. NNFCC Coalition Agreement Treasury, May 2010: • “We will introduce measures to promote a huge increase in energy from waste through anaerobic digestion”The UK’s National Centre for Biorenewable Energy, Fuels and Materials
  13. 13. NNFCC Renewables Obligation The Renewables Obligation (RO) for large-scale (generally >5MW) renewable electricity projects. ROCs issued to accredited generators for renewable electricity.  Introduced in April 2002  Banded from April 2009  Double ROCs for Anaerobic Digestion • ROC value c. £44 – 50 per MWh  Banding Review due 2013, consultation open now. – Proposing 2 ROCs in 2013 – 14 – Degression of 0.1 ROC per year thereafter  EMR post-2017, details yet to be publishedThe UK’s National Centre for Biorenewable Energy, Fuels and Materials
  14. 14. NNFCC Feed-In-Tariff Feed-in Tariffs (FITs) provide a guaranteed price for a fixed period to small-scale (< 5MW) electricity producers; – Generation Tariff – the generator is paid for every kWh of electricity generated. – Export tariff – for electricity exported onto the National Electricity Grid. [Generators can opt in or on an annual basis, deciding whether to claim this or the market value for the electricity.] 06th April 2010: 09th June 2011: End-2011: April 2015: FITs Launched Fast-track review Comprehensive review Second full review complete consultation scheduled 07th Feb 2011: 30th Sept 2011: April 2012: Fast-track review Revised rates apply First review rates announced implementedThe UK’s National Centre for Biorenewable Energy, Fuels and Materials
  15. 15. NNFCC Feed-in-Tariff (FIT) Original Tariff – from RPI Adjusted Tariff – New Tariff – from CapacityAnaerobic Digestion April 2010 from April 2011 September 2011 <250 kWe 14.0 p/kWh 11.5 p/kWh 12.1 p/kWh 250 – 500 kWe 13.0 p/kWh >500 kWe 9.0 p/kWh 9.4 p/kWh 9.4 p/kWh For Comparison: PV (<50* – 100kW) 31.4 32.9 19.0 (12.9 *) PV (<100* – 5MW) 29.3 30.7 15.0 – 8.5 * Wind (100 – 500kW) 18.8 19.7 19.7 * Proposed banding differs – aggregated here for comparison only.The UK’s National Centre for Biorenewable Energy, Fuels and Materials
  16. 16. NNFCC Impact of Feed-In-Tariff (2010 – 2011) Source: Ofgem – Feed in Tariff Newsletter, September 2011The UK’s National Centre for Biorenewable Energy, Fuels and Materials
  17. 17. NNFCC Renewable Heat Incentive • The Renewable Heat Incentive is intended to provide financial support to encourage a switch from fossil fuel heating to renewable sources. • England, Wales and Scotland • Two-phase approach:  2011: non-domestic sector e.g. from large-scale industrial heating to SMEs and community heating projects.  2012: domestic sector and perhaps additional technologies (bioliquids, air-source heat pumps, etc)The UK’s National Centre for Biorenewable Energy, Fuels and Materials
  18. 18. NNFCC RHI Structure • Tariff levels are intended to provide a rate of return of 12% on the additional capital cost of renewables over conventional heat systems. • Opened for applications Monday 28th November 2011 (delayed since 30th September) • Payment period is guaranteed for 20 years from installation. • Payments will be made quarterly. • A review of tariffs is scheduled every four years, from 2014; – Interim adjustments will take into account inflation –RPI linked annually – Degression will applyThe UK’s National Centre for Biorenewable Energy, Fuels and Materials
  19. 19. NNFCC RHI Tariffs Technology Size (kWth) Tariff (p/kWh) Biogas combustion Biogas combustion < 200 6.8 (excl. landfill) Biomethane Biomethane injection All scales 6.8 For Comparison: Small Biomass Tier 1: 7.6 < 200 Tier 2: 1.9 Solid Biomass; Municipal Solid Medium Biomass Tier 1: 4.7 Waste (incl. CHP) 200 – 1,000 Tier 2: 1.9 Large Biomass ≥ 1,000 1.0 (2.6) Solar thermal Solar thermal < 200 8.5 Small ground source Ground-source heat pumps; < 100 4.3 water-source heat pumps; deep Large ground source ≥ 100 3.0 geothermalThe UK’s National Centre for Biorenewable Energy, Fuels and Materials
  20. 20. NNFCC AD Strategy & Action Plan CREATION DELIVERYThe UK’s National Centre for Biorenewable Energy, Fuels and Materials
  21. 21. NNFCC  Small-scale technology  Availability of finance  Waste segregation  Perceived technology issues  Biogas upgrading  Cost of energy crops  Biomethane for Transport  Security of incentives Technical Economic KEY ACTIONS Social Regulatory  Food waste collections  Planning  Markets for digestate  Permitting  Skills & training  Health & Safety  Food vs. Fuel conflict  Gas Quality StandardsThe UK’s National Centre for Biorenewable Energy, Fuels and Materials
  22. 22. NNFCC Official AD Information Portal www.biogas-info.co.ukThe UK’s National Centre for Biorenewable Energy, Fuels and Materials
  23. 23. NNFCC Conclusion • The UK has come a long way in just a few years, • But, barriers to development remain in place. • To see a “huge increase” in AD we need;  Long-term security - Policy - Incentives - Feedstock supply  Confidence  Investment  Strategy & planning  Regulatory frameworkThe UK’s National Centre for Biorenewable Energy, Fuels and Materials
  24. 24. NNFCC The NNFCC provides high quality, industry leading consultancy for more information contact us Email - enquiries@nnfcc.co.uk Twitter - @NNFCC +44 (0) 1904 435182• Future Market Analysis • Technology evaluation & associated• Feedstock Logistics Planning due diligence• Sustainability Strategy • Project feasibility assessment Development • Policy and regulatory supportThe UK’s National Centre for Biorenewable Energy, Fuels and Materials

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