Czech consultancy EGÚ Brno: Investment in biogas is likely to rise, helped by subsidies

Investment in biogas is likely to rise significantly next year. This will be made possible mainly by €2.4 billion (about CZK 58.5 billion) in European support for biogas plants, recently approved by the European Commission. The consultancy EGÚ Brno said this in its analysis. According to last year’s data from the Czech Biogas Association, there were 574 biogas plants in Czechia, with total installed capacity of 367 megawatts (MW).

According to the company, the subsidies could support projects such as combined heat and power generation, the provision of balancing services, conversion to biomethane and its injection into the distribution grid, or the use of biogas in transport.

„We recommend that biogas plant operators consider investing in combined heat and power generation, for example. While using biogas solely to generate electricity profitably requires biogas costs to remain below 50 euros per megawatt-hour (MWh), cogeneration increases revenue through the sale of heat. In addition, support for biogas plants with cogeneration units of up to 500 kWe, available from 2024, raises the threshold for viable costs to 80 to 100 euros/MWh, at least doubling the profitability of this solution,“ said Petr Čambala, managing consultant at EGÚ Brno.

According to Čambala, the profitability of using cogeneration units to sell so-called balancing services will also increase significantly. These help ensure an adequate supply of electricity on the grid. Čambala added that demand for new providers is expected to rise in the coming years as coal-fired power plants are decommissioned.

Another technology that will receive support through a so-called green bonus from the new year is the conversion of biogas into biomethane. It will now be possible to generate revenue from the sale of guarantees of origin for sustainable biomethane injected into the distribution grid. According to EGÚ Brno, converting biogas into low-emission biomethane could replace up to 20 percent of domestic fossil natural gas supplies by 2030. However, insufficient production capacity could be a problem.

„For biogas plants without support or whose support is ending, we recommend exploring the possibility of connecting to the natural gas distribution grid and investing in biomethane separation technology. If that is not feasible, they can focus on providing balancing services, which only requires a connection to the electricity grid,“ Čambala added.

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