Lessons from Germany

Germany’s impressive performance in biogas development has been as much about implementation as innovation. This, according to industry experts, is something the UK process industries would do well to learn from.

Almost two-thirds of the world’s operational biogas plants – currently numbering more than 10,000 – are located in Germany.  According to a recent report by research and consulting firm GlobalData, supportive government policies will see Germany continue to dominate global biogas energy generation for the foreseeable future.

The report forecasts biogas power generation to increase from 18,244 Gigawatt hours (GWh) in 2012 to 28,265 GWh in 2025. This represents a compound annual growth rate (CAGR) of 3.4%. By comparison, the US, the second most productive biogas power producer, is expected to increase generation from a 2012 figure of 9,072 GWh to 20,936 GWh in 2025, at a CAGR of 6.6%.

“In comparison to Germany, the biogas market in the UK is in its infancy, but it’s also a growth market,” said Anke Adams of process plant design group, CAD Schroer. There are currently 97 biogas plants in the UK outside of the water sector.

A predicted 40-50 more will be built this year, with larger increases in the coming years. The likely split between extremely large-scale plants for the big food producers and small to mid-scale units for farmers and local authorities is estimated to be in the region of 60/40.

The UK government is looking to support smaller units to get away from energy crops, focusing instead on turning food waste to energy. However, organisations such as the Anaerobic Digestion and Biogas Association (ADBA), believes initiatives such as the Renewable Heat Incentive (RHI) do not go far enough. It points to the low uptake of RHI for biomethane-to-grid projects and heat use from biogas combustion.

Ian Burgess of SEVA Energie, a German company supplying, among other products, engines which turn gas into heat and energy, agrees with ADBA that far more needs to be done. Originally from the UK, Burgess lives and works in Germany, and is tasked with introducing his company’s solutions to a wider UK market.

According to Burgess, a typical 500kW biogas plant can produce 3.5 million kWh a year, providing heat and energy for local amenities. It can pay for itself within about seven to eight years, with a 15-17% return on the investment. 

But Burgess believes there are two main factors holding back biogas plant projects in the UK. “First of all, it takes too long for planning applications to go through in Britain,” he said. “This process is much quicker in Germany. In the UK, most people don’t know what biogas is – what will happen to the land? Will it smell? Will it be loud?

There’s a huge educational process required, and people need to see first-hand that all these factors are easily mitigated. It doesn’t smell; it’s not loud; it’s good for the environment, and creates green energy.” 

Burgess added that there are more rules and regulations governing biogas plants in the UK than in Germany, and these keep changing, causing uncertainty in the market. 

“If you need to install scrubbers and noise reduction technology, and pasteurise all incoming bio waste, that adds to the cost,” he said. “If the feed-in tariffs don’t stay at an adequate level with a secure guarantee - especially if you need to buy in energy crops, and you have a large loan to pay off - then there may not be a pay-back.”

For a 500KW plant, the feed-in tariff in Germany is around 22 cents, and only 13.6p (about 16 cents) in the UK, which is guaranteed for 20 years indexed annually to inflation. 

However, the UK government has set out plans for this tariff, which would see it fall by 5% each year from 2014/15 for new installations if deployment reaches 75-100% of expected levels. In Germany, government regulations remain constant.  Feed-in tariffs change every four years and are guaranteed for 20 years.  This, Burgess said, de-risks capital investments.

“The government is talking about stimulating the economy by building houses on the greenbelt.  Yet solid support for biogas plants could have a much stronger, longer term economic impact,” said CAD Schroer product line manager, Mark Simpson.

“We’d like to see the number of biogas plants built in the UK double year-on-year.  Not only can the right, forward-thinking approach create sustainable energy for communities throughout the UK, help our environment, promote energy security, and divert waste from landfill sites; it also creates skilled jobs in renewables, as it has in Germany.”

If bioenergy is to provide the estimated 30% share of the UK’s 2020 renewable energy targets, then the UK should be looking to best practice overseas.  Global installed capacity is expected to increase by 2,700 MWel from 2012 until 2016 with the number of plants increasing by another 3,800. If UK process industries can work with government to increase biogas capacity, it could secure a far larger share of the market.