The new fashion in the electricity sector has the acronym GdO: Guarantees of Origins. A few months ago, Magnus told you the meaning of these certificates: verifying that the energy consumed by large industrial companies comes entirely from renewable sources. But if all the energy generated is mixed in the electricity grid, how can we certify that we are fulfilling our environmental duties? Well, by paying. The average price of GdOs in Spain is escalating year by year, developing one of the most significant markets for the energy transition plan established by the EU.
And for gas? If in the electric sector it is possible to certify that we are good caretakers of the environment, how can we say the same for gas consumption?
Nowadays, there are no GdOs for the gas market at European level and neither worldwire. According to the newspaper La Expansión, last year for the first time natural gas was sold with a certificate attesting to the conditions under which it was produced, giving the fuel an “ethical” label. The gas sold with the certificate has to comply with environmental impact standards affecting methane leaks, which contributes to global warming, well contamination and wastewater disposal. The first agreement to use the new standard is a New Jersey Resources contract to purchase gas from a Houston company that is one of the largest shale producers in the United States. New Jersey Resources explained that it bought the “responsible gas” with a premium over the market price, exactly how it works with the GdO for electricity. The exact premium over price was not disclosed, but the company said there would be no significant difference over cost to customers, about 90 cents a month added to the average bill.
However, this project represents a direct physical connection between the Soutwestern wells and the infrastructure employed by New Jersey Resources. In fact, today this is the type of process that has to be implemented if an industry wants to consume and certify its 100% green energy: consumer and producer have to be directly connected.
One of the most obvious solutions would be the direct involvement of an industry in the “generation of its consumption”: this is the case of biogas plants. According to the IDAE, biogas is the only renewable energy that can be used for any of the major energy applications: electric, thermal or as fuel. Through the anaerobic digestion process, it can be channelled for direct use in a boiler adapted for its combustion, to be injected after purification to biomethane in the existing natural gas infrastructures, both transport and distribution. Biogas has a content between 50-70% methane and 50-30% carbon dioxide, in addition, its properties are very similar to natural gas, with a calorific value ranging from 6000 to 9500 ccal/m3.
Figure 1: Biomass to biogas conversion process
With respect to the process, anaerobic digestion is generally classified according to the type of digester, working temperature and number of stages. The fully mixed digester is the simplest digester in design, and the most widely used in agro-industrial biogas plants in Europe. These are usually vertical cylindrical digesters, built in concrete, with a capacity not exceeding 2,500 m3 to more easily maintain the homogeneity of the biomass, as well as temperature. Within the digester, there are four anaerobic digestion phases: hydrolysis, acidogenesis, acetogenesis and methanogenesis.
The cost associated with the digester depends on the volume and the material used for its manufacturing. By way of reference, it usually represents between 10-15% of the investment costs of the biogas plant.
Another important aspect of the process is the treatment of the digestate, and it is directly related to the economic viability of biogas plants:
- Physical conditioning: solid-liquid separation. The cost corresponding to this phase involves an investment of between €20,000 and €250,000, depending on the technology implemented (screw press or centrifuge).
- Recovery of nutrients: the remaining material can also be used in agriculture, and will have a lower concentration of nutrients, preserving organic matter. The corresponding investment is 75,000-100,000 €.
According to a study given by the Universitat Politecnica de Catalunya and the Spanish supplier Naturgy, the investment cost for a biogas plant is very dependent on the specific production of the raw material. For livestock droppings, the costs according to the electrical power are indicated by the black line in the following graph, while for energy crops the cost is lower (discontinuous line).
Figure 2: Investment price in a biogas power plant
Currently, in Europe, there are 367 plants that already inject renewable gas into the pipeline network, but only one of them, Valdemingómez, is located in Spain.
In the specific case of Spain, the result of having only one renewable gas injection plant in the network is due to the inefficiency and high cost of this type of service. The plant, in total, receives 3,200 tons per day of urban waste from Madrid and recovers only about 70,000 tons per year. This is because not everything that goes in is finally usable. The integrated management system costs about 400 million euros per year: about 70 million go to treatment, another 110 to collection and only cleaning takes 200 million. In addition, the 45% of the containers are badly deposited, so many end up in the landfill.
As for industrial plants not connected to the grid, in Spain, with very generous regulations on incentives for wind and photovoltaic energy, biogas was discriminated, where public incentives for electricity production were 35% lower than in other European countries. This, together with the difficulties of developing profitable energy crops due to the scarce rainfall in the country, led to the scarce development of the sector, with only 50 anaerobic digestion plants, compared to more than 10,000 in Germany. The lack of another benchmark, on the other hand, meant that these few plants were built according to the German model, designed for the use of energy crops rather than waste. In addition, the regulations of the Spanish model that cancelled the authorization of new installations in primary regime of electrical production (Royal Decree 1/2012), and reducing by more than 25% the limited existing incentives for plants in operation, stopped the development and implementation of this technology.
According to an official document of the IDAE, in fact, the investment cost for the construction of biogas plants is excessively high, as well as the time of return of the investment (more than 5 years). In addition, there is resistance to the granting of loans by financial institutions.
In addition to an economic problem, the lack of a standardized procedure for the design of systems and prediction of the amount of biogas produced also brings uncertainty and mistrust in this technology, along with the difficulties of obtaining authorizations for the construction of new plants.
The same Spanish Association of Biogas (Aebig) denounces the “almost absolute oblivion” of this technology by the Government, which has left behind the biogas sector in its PNIEC, with an increase in installed power from 223 MW in 2015 to just about 235 MW in 2030.
According to Gaz Naturel GRDF, the distributor that operates the most extensive network in Europe with 50 biomethane production plants connected to the gas network, estimates that in Europe between 12% and 14% of the gas generated will be renewable by 2030.
A question arises: how does Spain intend to contribute to this energy transition objective? As indicated in this article, our intuition leads us to think that for now it will leave the leading role to its European colleagues.
Cristina Vitale | Energy Consultant