Four new biomethane plants were built in Czechia last year, but development is lagging

Four new biomethane production facilities were built in the Czech Republic last year, bringing the total number in the country to seven. Some of the plants that have been built are not operating, due to low gas prices and an ineffective operating support scheme. This is according to data from the Chamber of Renewable Energy Sources (OZE), obtained by the Czech News Agency (ČTK) today. The Czech Republic has long lagged behind Europe in developing biomethane production.

Total installed capacity at biomethane production facilities rose last year to almost ten million cubic metres per year. Actual production, however, is significantly lower. The year before last, it amounted to 1.2 million cubic metres, most of which was supplied to the natural gas distribution network.

Some facilities are currently shut down, according to the chamber, because operating them generates greater losses than leaving them idle. „Unfortunately, this can happen with fuel-based renewable energy sources, unlike non-fuel-based ones. It comes down to the balance between investment and operating costs. For non-fuel-based renewables, investment costs are key and operating costs are low, whereas operating costs are more important to the economics of fuel-based renewables,“ the chamber explained.

The Czech Republic is therefore lagging in biomethane production, ranking near the bottom of the European league table. The first plant in the country was built in 2019, and more only began to come on stream in the past two years. The chamber attributes this to operating support conditions that are difficult to meet. „Not a single plant is registered for operating support because the conditions are impossible to meet, and the system for trading guarantees of origin is designed in a way that makes profitable operation impossible,“ the chamber said.

At the end of last year, the state did announce operating support for biomethane, but the so-called green bonus is based on natural gas prices in the first half of 2023, when they were roughly twice as high as they are now. „In addition, traders are refusing to buy biomethane at a fixed annual price and are pushing producers towards spot prices. This creates considerable business uncertainty, however, and it is not a risk that can be taken,“ explained Adam Moravec of the CZ Biom association. He said the rules should change next year, but another uncertainty is that the European Commission’s approval of the support scheme is due to expire soon.

The chamber says biomethane has significantly greater potential in the Czech Republic in the longer term. „Domestic biomethane production could eventually replace tens of percent of natural gas consumption. By 2030, we could manage to replace every tenth cubic metre of natural gas with biomethane. Interest in biomethane continues to grow thanks to ESG criteria and the taxonomy,” Moravec said. However, he said no boom in development should be expected this year.

The Czech Republic is doing considerably better in biogas production. According to statistics from the European Biogas Association, there are more than 600 biogas plants in the country. The year before last, they produced almost eight terawatt-hours (TWh) of biogas. Production thus increased by about a tenth year on year, while the number of plants doubled over the past ten years.