1. Iain Ward BSc. C. Eng. MIGEM CNG Services Ltd www.cngservices.co.uk 29 th Sept 2011 RESCO Biomethane for Grid Injection supply chain workshop ‘The energy view’

2. Summary CNG Services Ltd Making biogas Biogas clean up and upgrading Biomethane to grid plant BtG Projects Biomethane Utilisation Efficiency CO2 Value Summary

3. CNG Services Ltd Supporting development of the BtG and CBM markets in the UK: Cleaning bio-gas and injecting biomethane into the gas grid (BtG) Creator of the UU Davyhulme BtG and CBM Project Developing the Didcot project for Thames Water, SGN and Centrica Supporting a further 15 potential BtG Projects in the UK for Water Companies and AD developers Supporting introduction of compressed biomethane (CBM) fuelled vehicles in the UK VW Caddy Ecofuel MB Sprinter NGT and Econic NGT Iveco Daily and Eurocargo MB and Volvo dual fuel tractors We are independent from all makers of CHP plant, vehicles, clean-up, compression etc. Our aim is to support biogas producers in exploiting the biomethane to grid and compressed biomethane for vehicle opportunities

4. What is Biomethane? Bio-gas from an anaerobic digester contains typically 65% methane, 35% CO2 –Lager shandy Natural gas contains around 90% methane, with ethane, propane, butane, CO2 and nitrogen making up the rest –Blended whisky - made from dinosaur poo in a prehistoric AD, contaminated over the millenia Biomethane is bio-gas without the CO2, containing around 98% methane –Malt whisky, the elixir of life, we all want to drink it So, we can make biomethane from organic material in an AD (waste food etc) or from wood in a gasification plant – better than landfill

5. Anaerobic Digester and Uses for Biogas Drawing courtesy of the German Renewable Energy Agency http://www.unendlich-viel-energie.de/en/bioenergie/biogas.html

6. Gasification and Methanation Schematic courtesy of the International Gas Union - British Gas used to do this from coal (plant closed in 1985 when it was clear that UK had a lot of gas)

7. UK Biomethane Potential UK gas – sold at 20 p/therm for power generation…..by 2025, UK gas production from North Sea and from organic matter will be similar UK gas production Netherlands

8. Biomethane to Grid (BtG) Widespread consensus that gas grid injection is attractive because of absence of uses for waste heat where renewable methane is made. Take the gas to the customers along existing pipelines and have high efficiency utilisation….

9. Making Biomethane Lots of ways of cleaning up raw biogas to make Biomethane with the technology shown as a ‘black box’ This shows biomethane going into the gas grid, with addition of propane (to increase the calorific value) and odorant (to give a smell) Gas Grid From Anaerobic Digester

10. Water Wash 99% of biomethane to grid, 1% methane vented Can recover heat from larger plants (from cooling water) 12 m high – can have planning issues Removes H2S and siloxanes Likely to be lowest cost option Didcot 2010 (Chesterfield Biogas)

11. Chemical Absorption 99.5% of biomethane to grid, <0.5% methane vented Needs significant heat to regenerate the chemicals (15 – 20% of biogas) Ideal if waste heat already available

12. Pressure Swing Adsorption 92% of biomethane to grid, 8% of methane goes with the CO2 This gas can be flared or burnt in CHP or boiler (but needs to be brought back to 33% methane) No methane vented Small footprint Likely for UU Davyhulme 2011

13. Few membrane plants Contamination of the membranes is an issue May be a good technology – similar to PSA in that gives a waste CO2/CH$ stream that should be used to generate electricity or make heat Membrane Separation

14. BtG Plant BtG Plant – Biomethane to Grid plant comprises the following: Propane storage and injection Odorant storage and injection Gas quality monitoring Gas CV measurement Gas flow measurement Pressure control Telemetry The BtG plant is located after the Clean-up and Upgrading Plant and before the gas grid

15. Propane Enrichment Plant Gas Thermal Energy Regs set a Flow Weighted Average CV for gas networks, max 1 MJ difference between grid inputs Typically around 39.5 MJ/m3 Pure CH4 has a CV of around 36 MJ/m3 Accepted that propane addition is the technically best resolution Accuracy of dosing paramount to meet CV and WI limits Incurs substantial Opex; “methane value loss”, energy deducted from RHI entitlement Control system required to manage On-site storage, contracts for supply

16. BtG Plant – Ownership Options DN funds the plant, owns it, receives a return and takes appropriate liabilities Customer funds, DN owns and maintains, no return to DN, DN takes liabilities for plant performance 350 m3/hr plant = 1 million th/annum = approx £5k per day gas value Customer funds and owns, having to meet DN’s specification This is the National Grid NTS Model Customer has GT Licence, they fund, own, operate BtG plant and pipeline with the DN network a connected system No consensus on which of these, may be that each DN will adopt a different approach related to their appetite for investment and risk

17. Network Entry Agreement Needs to address capacity (NTS NEA has no relevance to capacity which is covered in UNC) May need to address liabilities if the DNO provides some services such as odorant addition or gas quality monitoring ie from Options 1 and 2 NTS NEA has concept of Daily Flow Notifications were NTS informed continuously of flow forecasts For biomethane likely to be unmanned sites Key is that the DNO network is not impacted if biomethane flows stop The biomethane system flows must be monitored by computer with no need for manual intervention Links to Biomethane Sales - the gas purchaser also requires forecasts to allow them to stay in balance Materiality point as flows very low

18. Didcot Project CNG Services as designer and project manager

19. Gas Analysis Odorant Safety shut off valve Pressure control New plant to remove impurities in BioGas Dedicated plant to apply safety controls at gas network entry Dedicated plant to apply safety controls at gas network entry Initial separation Fertiliser Cake Clean Water Anaerobic Digesters BioGas is currently wasted From Summer 2010 gas is saved for treatment and beneficial use Clean Biomethane to consumers via existing network Sludge Up to 7 daysUp to 18 days

20. Efficiency - Converting Sunlight Falling On A Hectare Of Land Into Vehicle Fuel Biomethane always wins……..graph courtesy of German Energy Agency (dena) “Biogas Partnership,” initiative http://www.biogaspartner.de/Biogas Partnershiphttp://www.biogaspartner.de/

21. Carbon Trust Shows Best Use is Transportation CBM is environmentally very attractive but the worst in terms of economics for the biogas producer

22. CBM Vehicles Vehicle use makes sense for depot based vehicles

23. Electricity Feed In Tariff Biogas that generates electricity can an electricity Feed In Tariff (FIT) FIT worth 9 p/kwh on top of the normal electricity price UK makes a lot of biogas at present, water companies, it all goes to make electricity, limited use for waste heat....in long term, post 2020, this will not be a good idea as the UK electricity grid is being de- carbonised (wind, nuclear, CCS)

24. Renewable Heat Incentive (RHI) Worth approx £1.96/therm in 2011, indexed Earned on the net energy exported to grid, heat raised by non-renewable sources is deducted Paid to the Biomethane producer Economically comparable to CHP with advantage in favour unless CHP has very high efficiency Particularly good if Biogas plant already exists e.g. Water Co. Gas Transporters keen to facilitate, Ofgem may allow incentive return to stimulate further Injection into gas grid strongly supported by UK gas grid owners

25. Green Gas Certificates Enables injection of Biomethane in one place and by displacement usage at another, regardless of relative locations. Supports all BtG projects and also gas a transport fuel. Scheme arranged by REA and now active At the present time, more value from making electricity or injecting gas into the gas grid. UK CBM is highest taxed CBM in EU – in most places it is duty free – UK CBM tax is more than double the tax on Fossil CNG in Germany...

26. Biomethane Conclusions Biogas should only generate electricity when all the heat can be used UK has advanced gas grid and the full support of UK gas distribution network owners and energy suppliers UK gas production is declining and we need to find new gas resources to supply domestic customers and improve security of supply Biomethane injection into gas grid is widespread in Europe, no material technical issues (it is just processing gas on a small scale) We have commercial vehicles made by OEMs such as VW, MB and Iveco – new dual fuel diesel-CBM tractors very good Put all this together and we can create a thriving domestic BtG and CBM industry that is able to make a very material contribution towards the UK’s 2020 targets There are no material technical issues or barriers, the BtG premium has been set at an appropriate level so that we can get on with it. We also need promotion of CBM as a vehicle fuel for depot based commercial vehicles (and lower CBM fuel duty please)