5th edition of the biomethane observatory

In Europe, the dynamic of the biomethane sector follows a three-speed pattern, with countries developing at different levels of maturity. France is one of the countries where the fast-growing sector is entering the industrialization stage. In this new edition, Sia Partners presents a comprehensive overview of the biomethane sector in France and provides some insights into the impact of the Covid-19 crisis.

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A comprehensive review of the biomethane sector in France

Biomethane in Europe: a strong dynamic but a moderate number of projects in service

At the end of 2018, Sia Partners registered that 621 biogas plants were operating in the European countries reviewed, representing a total of 22 TWh of biomethane per year. These figures illustrate how dynamic the sector is in Europe, with a 9% growth in terms of units installed and 6% growth in terms of installed capacity. The share of units injecting into the grid reflects the government supporting policies regarding biomethane (mainly feed-in tariffs, biofuel quotas coupled with a system of guarantees of origin) as well as the level of development of the gas grid.

European situation at the end of 2018:  heterogeneous levels of maturity and dynamism

Three categories of countries have been identified from the analysis of 11 countries:

  • Countries at mature industrialization stage: Germany, Sweden

  • Countries experiencing strong growth and where industrialization is starting or is ongoing: France, UK, Denmark, and The Netherlands

  • Countries with few installed units and expected future growth: Italy, Belgium, Austria, Finland and Norway

Further information is available in the 2019 European Benchmark.

After a few years of a great dynamic in the biomethane sector, France is one of the countries where the sector is showing the first sign of stabilization.

France: A dynamic production sector moving into the industrialization stage

The number of units installed has risen dramatically since the introduction of feed-in tariffs in 2011. This upward trend continues in 2019 with 47 new injection sites, representing a 62% increase compared to 2018. The French industry is now the most dynamic one in Europe.

At the end of March 2020, 139 units were in service representing a total injection capacity of 2.5 TWh/year.

 

While the number of units in service is expanding steadily in France, the number of projects that have reserved injection capacity has surged over the past few years: at the end of the first quarter of 2020, 1,134 projects had been declared for a total injection capacity of over 25 TWh/year.

France: A growing demand, yet relatively fragile

In France, on the demand side, the number of vehicles running on Compressed Natural Gas (CNG) and the number of filling stations distributing bio-CNG have been steadily increasing, but it is now heating uses that represent the major part of the Biomethane Guarantees of Origin market, which are mainly valued in green gas offers for the residential-tertiary sector.

France: The new Programmation Pluriannuelle de l’Énergie (PPE), published on 23 April 2020, has set targets that fall short of the industry's ambitions. However, the allocated budget for the sector has been revised upwards

As expected, the new PPE, published on April 23, 2020, has scaled down the ambitions of development for the biomethane sector. The French public authorities have set a target of 6 TWh in 2023 (compared with 8 TWh in the previous PPE) and a range of 14 to 22 TWh injected in 2028. Feed-in tariffs will evolve towards a tendering system with a target purchase price of 75 €/MWh in 2023 and 60 €/MWh in 2028. Additional information on the practical details of these calls for tenders and the evolution of purchase feed-in tariffs are expected in the coming months.

France: The coronavirus crisis will affect the sector, but the impact of this crisis is as yet difficult to measure

In the present health crisis context, while the operations in the 139 biogas units injecting into the grids have been maintained, delays may be expected in the implementation of projects currently in study or construction. These delays will most likely result in a slowdown in the growth of the fast-growing sector in 2020.

Specific measures are currently being discussed to mitigate the impact of the coronavirus crisis on the sector's development. The French Minister, Elisabeth Borne, mentioned the following options in a press release on April 2nd: additional delays granted for the commissioning of the units and a temporary suspension of the biogas purchase contract for production plants facing operational issues.

 
 

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