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Central and eastern Europe's path to decarbonization is set to
get a boost from biomethane, with regional production capacity
poised to surge as the current decade progresses, according to a
senior executive at German energy company Uniper.
Biomethane could replace conventional natural gas in the
electricity generation, industrial, fuel, and heating sectors, in
addition to providing a cleaner source of fuel for power stations
than coal, which currently dominates electricity production in
countries such as Poland.
Biomethane is a source of methane produced either by "upgrading"
biogas or through the gasification of solid biomass.
Poland, Hungary, and Romania have a combined biomethane
production capacity potential of up to 100 TWh, Peter Arp, Uniper
vice president, origination CEE, said during an Atlantic Council
conference on central and eastern Europe 10 June. Of that, 50% is
located in Poland, less than 20% in Romania, and the rest in
Hungary, he told Net-Zero Business Daily in a phone interview 15
June.
In contrast, Germany (see graphic below; for reference 11 TWh
equals about 1 billion cubic meters), Europe's largest biomethane
market at the moment, currently has around 10 TWh of capacity, he
said in the interview.
Germany's share of European biomethane production is about 40%,
according to IHS Markit's plant tracker for the sector.
More than 92% of European capacity is connected to the gas grid,
facilitating a variety of potential heating, power, and industrial
uses.
Poland, Hungary, Romania, Ukraine
Poland and Hungary offer positive conditions for market access,
while Romania has "huge first mover potential," Arp told the
conference.
Ukraine adds another 80 TWh of potential, but the risk profile
is higher, he added.
The production costs throughout the region will be below those
in Germany, Arp said in the interview.
Poland "has space, so, everybody who has space has an advantage
for biomethane," he said. "This would be a chance for investments,
and biomethane will help us also to get the gas more green."
The substantial agricultural base in Poland provides ample
potential feedstock, Arp said. Construction on much of the first of
the region's plants could begin in around 18 months' time,
according to Uniper estimates, and can be expected to be up and
running two or three years after that.
Uniper is currently purchasing liquefied biogas in Germany under
long-term contracts, but "would love to buy it" from Poland or the
US, said Arp.
Germany has a very large biogas market at the moment, he said,
but upgrades to biomethane plants are missing.
The problem with biogas is that while it can be used by power
plants, it cannot be injected into the existing pipeline
infrastructure, said Arp. That is why Uniper is looking into
biomethane, he said.
Uniper finds customers and other stakeholders asking for green
alternatives regularly, Arp said in the interview.
Uniper operates power generation, energy trading, natural gas
storage, and supply businesses. The Dusseldorf-headquartered
company has 34 GW of generation capacity. Its biggest shareholder
is Finnish energy company Fortum. Uniper operates one power plant
in the central and eastern European countries where Arp sees
biomethane growth—the 428-MW Gonyu gas-fired facility in
northwest Hungary.
Ambitions
Poland will have almost a new power system by 2040, Minister for
Climate and the Environment Michal Kurtyka told a session at the
Atlantic Council conference.
The revamp will come from mostly zero-emission sources, with a
heavy investment in renewable energy sources, Kurtyka said.
Poland does not make the top 10 countries for European
biomethane capacity at the moment, but the Polish government has
big plans for the sector.
In March, the government released its Polish Energy Policy 2020
battleplan. The government envisages that by 2030 some 10% of gas
transported in networks will be biomethane and hydrogen, according
to international law firm Dentons.
The government estimates that the share of renewable energy will
reach an overall 23% of gross domestic consumption by 2030 and at
least 28.5% by 2040. In addition, a 14% share of renewable power in
transportation by 2030 would be achieved through the use of
biocomponents and biofuels, development of advanced biofuels,
electromobility policies, and biomethane.
Earlier in 2020, the Polish Power Exchange and state-controlled
energy company PGNiG signed an agreement to develop a biomethane
market.
Hard-to-abate sectors
Biomethane will allow countries to reduce emissions in some
hard-to-abate sectors, such as heavy industry and freight
transport, according to the International Energy Agency (IEA). It
also helps to make some existing gas infrastructure more compatible
with a low-emissions future, thereby improving the
cost-effectiveness and security of energy transitions in many parts
of the world, the multilateral agency added.
Under the IEA's Stated Policies Scenario (STEPS) in the
report—that is, enactment of each country's currently stated
energy and climate policies—by 2040, European biomethane use
would reach 12 million mt of oil equivalent (mtoe) in 2040,
accounting for 2.5% of the gas used by natural gas grids.
The potential for biomethane production today globally is over
700 million mtoe, which is higher than biogas because of the
inclusion of woody biomass as a feedstock for thermal gasification,
the IEA said in the report.
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