UK energy: strong outlook for biogas

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22 July 2011, Gas, Electricity

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The Guardian reports that there has been a "deluge of new planning applications" for gas plants following recent UK electricity market reforms and a decline in North Sea oil and gas drilling in the wake of tax hikes. These developments are good news for biogas, which can be used as a substitute for natural gas.

Biogas comprises 60% methane and 40% carbon dioxide and is produced from anaerobic digestion. Biogas burns more cleanly than fossil fuels, and is said to be carbon neutral, as the CO2 released in its combustion was previously taken from the atmosphere when the organic matter first grew. The industry was bolstered earlier this year by a rise in feed-in tariffs. A 2009 report published by National Grid suggested that biogas could eventually provide as much as 50% of the UK's residential gas demand.

Ecotricity certainly recognizes the potential, which is why it supplied the first biogas in 2010 (albeit using green gas imported from Holland) on a "green gas tariff." It proposes to build green gas mills in the UK in the near future, and this is an opportunity that all utilities should be exploring. While biogas can be used for heating purposes, with the creation of combined heat and power plants it could also be utilized to satisfy electricity demand in the country.

Any such developments would be eligible for two Renewables Obligation Certificates, and possibly the UK government's Renewable Heat Incentive. In the Department for Environment, Food, and Rural Affairs' recent Anaerobic Digestion Strategy Action Plan, it claimed that electricity generation through anaerobic digestion has the potential to reach 3-5TWh by 2020 in the UK alone, compared to the current figure of 1.08TWh of installed capacity.

Anaerobic digestion creates resalable fertilizer, diverts waste from landfills (for which the UK has only 10 years of capacity left), and saves methane emissions (which are 21 times worse than CO2). Furthermore, National Grid has estimated that the marginal cost of renewable gas is comparable to that of wind power. Datamonitor believes the drivers for biogas are very strong, and all utilities should seriously consider taking a leaf out of Ecotricity's book.

Source: Datamonitor

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