Renewable Gas: What Policy and law will we need

Lecture at Renewable Energy Innovation Hub26 February 2019

Dr James Prest

ANU College of Law & ANU Energy Change Institute

Australian National University

Overview

1. Power to Gas - Balancing RE

2. Comparison of approaches - Germany/DK

3. Certificates of origin

4. Issues with biogas injection

5. Graphic - Australian biogas sector by comparison with DK and DE

• NAWARO BioEnergie Park Güstrow GmbH near ROSTOCK in Northern Germany

• Biogas Plant • Biogas Upgrading Plant

for grid injection • Envitech power to gas plant in

Germany

• https://www.envitec-biogas.com/

• https://www.nawaro.ag/de/index.html

• Built in 2006

• 15 Hectares in area

• 40 digesters on site (40 x 500kW)

• 20MW electricity production per hour

• Biogas injection in Denmark https://en.energinet.dk/

• ‘Biogas Tilført Nettet’ - biogas input/ injected/ supplied to the grid – 332,137 KWH/h on 18 Feb

• Yesterday : Biomethane 321,830 kWh/h at 25 February 2019 4:07

Power to Gas: Integration of Gas and Electricity networks

Source: Fraunhofer ISE Research Institute https://www.ise.fraunhofer.de/en/business-areas/hydrogen-technologies/hydrogen-production-by-water-electrolysis/power-to-gas.html

• Source: German Biogas Association via GIZ and SUTP

Anaerobic digestion CHP

100 kWh

35 kWh

10 kWhlosses

biogas

waste heat

40 kWh

digester heating

η = 35%

15 kWh

electricity

biogas to electricity: low energy efficiency

The efficiency of producing electricity from biogas is low

One rationale for power to grid

• Storage

• The gas grid is the largest existing energy storage facility in many countries.

• We can use it for seasonal storage of variable electricity production (eg wind, solar)

• This is done via power-to-gas process.

> gas grid is a key element in transition from the existing energy to renewable energy future

Biogas policy questions

• Biogas to electricity – closing off the RET in 2020 to new projects

• How can we encourage biogas projects to inject to the gas grid ?

• How to encourage in the ACT as a leader or must we wait for a nationally consistent approach to renewable gas ?

Photo: Weltec Biogas

Biogas must be upgraded to biomethane

Evolution of biomethane production in Europe

• biomethane production 752 GWh in 2011 to 17,264 GWh in 2016 (+16,512 GWh)

• In 2016 alone, biomethane production in Europe increased by 4,971 GWh (+40%):

• 2016 Germany (+900 GWh), France (+133 GWh) and Sweden (+78 GWh).

• [Total biogas (not just biomethane) plants in Europe - 17,662 installations]

Source: European Biogas Association 2017

Can we incentivise the production of renewable heat through a Renewable Heat Law as in the UK ?

Industrial Consortium

anaerobic

digester

methanation

upgrading

electrolyzer

CO2/CH4

CO2 CH4

H2

Process flow diagram

Types of incentiveType of Scheme Concept Detail

Certificate of origin scheme Matching willing buyers of green gas with producers.

Voluntarism Could be extended with

mandatory obligation for gas retailers (similar to the RET)

Feed in tariff for green gas injected into network

Payment to producer based on MJ of gas injected to network

Renewable heat incentive Payment to producer based on kWh of heat

Tax on Greenhouse Gas emissions including METHANE

Incentivises capture of methane from dairy and landfill for

combustion to CO2

Indirect approach to incentivise RNG

Renewable Energy Storage incentive to encourage

Power to Gas

Certificates of origin

• Matching buyers who want genuine ‘green gas’ with suppliers of green gas

• Buyers are assured that the ‘green gas’ they buy is genuine, the environmental benefits are real, and the gas has not been sold to someone else.

• Creation of a certificate for each unit of biogas created

• Needs a Registry

• Certificate trading company assists buyers by ensuring that all certificates are from producers with independently audited biogas certification, and to navigate the proliferation of these certification schemes in Europe.

certificate trading company

Source: South Pole

Renewable Heat Incentive UK

• The Domestic Renewable Heat Incentive (Domestic RHI) is a government financial incentive to promote the use of renewable heat.

• Switching to heating systems that use eligible energy sources can help the UK reduce its carbon emissions and meet its renewable energy targets.

• People who join the scheme and stick to its rules receive quarterly payments for seven years for the amount of clean, green renewable heat it’s estimated their system produces.

• Four classifications – Domestic v Non domestic– On gas grid v off gas grid

Renewable Heat incentive Germany

• Heating - Renewables share of final energy consumption in heating x 3 between 2000- 2015, Was 4.4% now above 13.2%.

• Renewable Energies Heat Act.

• builders of new buildings are required to generate a % of heating requirements from renewable sources, to undertake compensatory measures such as installing additional insulation, or to use combined heat and power systems or district heating.

Source: BMWI.de (2017) Renewable Energy Sources In Figures 2017

Renewable Heat law UK

• Renewable Heat Incentive Scheme Regulations 2018 (UK) (started in 2011)

• Authority must make, to participants who are owners of accredited RHI installations, payments for generating heat that is—– (a)used in a building for any of the following purposes—– (i)heating a space;– (ii)heating water;– (iii)carrying out a process; or

• (b)used otherwise than in a building for either of the following purposes carried out on a commercial basis—– (i)cleaning;– (ii)drying.

• the following are excluded heat uses—

• (a)drying digestate, where the heat is generated by an accredited RHI installation with a tariff start date…14 December 2016

• (b)where paragraph (6) applies—• (i)drying woodfuel, except where the heat is generated by an installation to which paragraph (7)

or (8) applies;

• (ii)drying, cleaning, or processing waste;• (iii)heating water in a swimming pool, other than

one which is used for a municipal or commercial purpose.

Eligible sources

• Solar thermal for hot water and hydronic heating

• Ground source heat pumps (capacity 45kWh or less,

with coefficient of performance at least 2.9)

• Air source heat pumps (ditto)

• Shared loop ground systems

• CHP systems based on solid biomass, biogas, deep geothermal energy.

RH using solar collectors

• Eligible installations generating heat using solar collectors

• 8. This regulation applies if the plant complies with all of the following requirements—

• (a)it generates heat using a solar collector;

• (b)it has an installation capacity of less than 200kWth;

• (c)in the case of a plant with an installation capacity of 45kWth or less, the plant meets the requirements in regulation 18.

Must be properly administered

• Maladministration in Northern Ireland led to a Royal Commission (with 111 days of hearings)

• Opportunities for fraud

• Audit of facilities needed: eg, Jan 2017 OFGEM said of the

63 installations they had looked at, subsidy payments had been suspended at 33, for a number of reasons: BBC

• 2018 study by Navigant Consulting, Inc.

• replacing 16 percent of the traditional natural gas supply with renewable gas can achieve greenhouse gas (GHG) reductions equivalent to converting 100 percent of buildings to electric-only energy by 2030.

• By using a mix of both in-and out-of-state resources, the renewable natural gas strategy is three times more cost effective in reducing GHGs than an electrification pathway.

Conclusion

• Renewable natural gas will continue to have a role to play in many facets of our economy.

• We cannot feasibly go to 100% electrification and ditch the gas grid altogether

• Industrial uses and peak gas demand ensure this is not feasible.

• We need to make sure that gas complements clean energy resources, not competing with them.