Biomethane Roadmap in the UK

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Presentation transcript:

Biomethane Roadmap in the UK London, 16th December 2015 Dr Kiara Zennaro Head of Biogas, REA

The UK 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 £100 billion Vital UK asset All our Grid Owners are very supportive and have created an attractive regime to allow projects to go ahead at lower cost/quicker

The drivers 45% of all UK energy is used for heating, responsible for about one third of the UK’s carbon emissions Over 70% of the UK’s heating demand is met by gas Renewable energy targets – 15% of energy from renewables by 2020 and UK sub-target to meet 12% heat from renewable sources by 2020 Climate Change Act 2008: 50% GHG emission reduction on 1990 levels by 2025 and 80% by 2050 UK continental resources are running out

Renewable Heat Incentive Renewable Heat Incentive, introduced in 2011, is the primary policy which supports biomethane in the UK World-first financial incentive to promote the generation of renewable heat and biomethane Funded through general taxation Payments made quarterly over 20 year period on basis on metered biomethane injected (p/kWh) Initially funded until March 2016. On 25th November Government announced that RHI will be continued to 2020/21 - £700 million less than originally planned.

RHI Incentives

Biomethane projects per year 2010-2016 1 in 2012, 2 in 2013, total of 50 projects injecting gas by end of 2015

UK Biomethane Projects 2012-15 2015 2014 2013 2012

Proportion of projects in each feedstock category

Biomethane Market Forecast UK total gas demand now is around 700 TWh/annum Around 50% domestic heating, 25% power gen and 25% industry Biomethane injected by end 2015 is around 2 – 2.5 TWh Potential maximum biomethane by 2030 is around 20 to 30 TWh 3-4% of UK total gas demand, 7 – 10% of UK domestic gas demand. Could increase to 20% of UK gas demand if this decreases to ~150 TWh/annum

RHI Degression Tier 1 tariff April 2015: 7.5 p/kWh July 2015: 7.24 p/kWh October 2015: 6.52p/kWh January 2016: 5.87p/kWh April 2016 and July 2016: ?

Barriers Budget restraints and future tariff degression Availability of waste feedstocks The use of crops still under debate Gas grid capacity Cost of grid connections/delays Energy content (CV) of biomethane v grid (propane) Sustainably Criteria- in force from 5th October 2015 60% GHG savings compared to GHG EU fossil heat average Consignment basis – no averaging GHG criteria may be tightened up in the future

Biomethane in transport (1) Considerable potential for biomethane to be used in transport, particularly in HGVs and buses Study carried out by Ricardo-AEA for DfT (2014) showed that use of biomethane in vehicles could deliver substantial GHG savings, compared to use of petrol, diesel or natural gas Only very limited amount of biomethane (0.1 Peta Joules) is produced for supply to the transport sector Available biogas/biomethane goes into heat and/or power sector as current incentives provide better returns

Biomethane in transport (2) Transport Energy Task Force set up by the DfT with the low CVP in 2014: Recommendations made to increase support for biomethane for transport and to remove barriers to deployment of HGVs and buses REA RTFG Renewable Gases Working group, working closely with DfT to identify role that biomethane and other renewable gases could play in transport to 2020 and beyond to 2030: Potentially biomethane from AD and gasification could be around 300 PJ/yr (E4Tech) What’s needed to unlock this sector ? Adequate level of support for producers of renewable gases for transport Support for refuelling infrastructure Support to gas vehicles R&D and development of a mass market for gas vehicles

Thank you Contact details Kiara Zennaro Renewable Energy Association – REA Biogas kiara@r-e-a.net Thanks to CNG Services for providing data Contact: John Baldwin john.baldwin@cngservices.co.uk