Things are heating up in the renewable gas industry. Soaring prices across the world have put a new focus on the strategic importance of developing indigenous gas supply.
Closer to home, the publication of the Renewable Heat Obligation (RHO) consultation has given us a firm roadmap of market development for renewable gas.
Each day, I talk to more and more farmers interested in renewable gas. The appetite in our sector to be part of the solution is immense.
When we look at renewable policy in Ireland, there’s no doubt there’s been a concerted effort to ramp up renewable electricity generation, with the Renewable Electricity Support Scheme and the impending Micro Generation Support Scheme driving this.
The push for wind, onshore and offshore, makes sense. When not powering an ever-increasing electrical load, excess electricity can be used to produce hydrogen, which in turn can be used to decarbonise our gas usage.
Currently, 30% of our primary energy needs, 40% of heating and 50% of electricity generation comes from gas generation. So decarbonising our gas network is crucial in achieving net-zero by 2050.
However, the reality is that, in the short term, hydrogen is costly and our economy and infrastructure isn’t ready to integrate it into day to day life yet.
On the contrary, we are ready for biomethane and molecules of this renewable gas are already flowing through Europe’s gas network.
Developing Ireland’s biomethane industry was the subject of a recent Gas Networks Ireland webinar. Biomethane is produced from upgrading biogas from anaerobic digestion (AD) plants to a purity of anywhere from 97% or higher.
This can then be used as a renewable substitute for natural gas, reducing emissions by a minimum of 70% in comparison and requiring no change in infrastructure.
As outlined in the Irish Farmers Journal a number of weeks ago, the RHO will stimulate the market for renewable gas by legally mandating suppliers of fuel in the heat sector to have a proportion of their fuel mix coming from renewable sources.
This would start in 2023 and increase incrementally to a minimum target of 3% by 2030. Currently, agricultural-based biomethane is among the cheapest options for renewable alternatives to fossil fuel in the heat sector.
That 2030 target equates to around 1.6 terawatt hours of renewable heat. We are assuming a typical farm-sized AD plant in Ireland will have a biomethane output of 20 gigawatt hours (GWh). Therefore, the RHO would create enough demand for up to 80 farm-scale plants by 2030.
Instead of a State-backed support scheme, developers of AD plants will be looking to the markets to find fuel retailers in the heat sector to secure long-term gas contracts (LTC).
This will be a competitive process and Irish developers could be competing with AD developers from all around Europe and further afield given our network’s vast connectivity.
This competition will naturally place a cap on the price of biomethane.
AD developers will either inject directly into the gas grid, operate a virtual gas pipeline to a grid injection point or supply an off-grid user.
Last week, Irish Creamery Milk Suppliers Association (ICMSA) president Pat McCormack commented on the Irish Farmers Journal farm leaders’ debate that Irish dairy co-operatives are afraid of increased competition for grass should an anaerobic digestion (AD) sector develop.
A typical 20GWh farm AD plant will require approximately 400ha of forage feedstock sourced within 10km and a further 16,000t of slurry sourced within 3km to 5km.
A report produced by KPMG and Devenish Nutrition into the sustainability of biomethane in Ireland, which, at the time of going to print, wasn’t published yet, aims to address these concerns and many more.
Russell Smyth of KPMG explained on the webinar that while it is technically feasible to develop a large-scale AD sector in Ireland, there is scope for unintended consequences if not done properly.
One of the concerns addressed in the report is around feedstock availability and they propose to only use feedstock produced in excess of food production in AD plants. This largely means ramping up grass production on underutilised grasslands he said.
On average, there is a grass growth gap of more than 3.5t DM/ha on beef farms when compared with dairy farms, so there is considerable scope to increase production without reducing feedstock availability for the livestock sector.
By increasing farm averages to 10t DM/ha across 760,000ha of grassland, this would produce an extra 3.1Mt of DM feedstock, which would be available for feeding AD plants.
More on this report in the coming weeks.