Germany boosts bioenergy role in power

Market: Electricity
20/08/24

Germany's government is working on new legislation to support the role of bioenergy as a provider of back-up flexibility in Germany's future renewables-based power system, thus giving a new lease of life to thousands of mainly small biogas plants soon falling out of the subsidy system.

The federal ministry of economic affairs and climate action this week said it will present a "comprehensive biomass package" which will "substantially" improve the prospects mainly of flexible, co-generating biogas plants.

The terms bioenergy and biomass are used interchangeably in Germany. The lion's share of Germany's installed bioenergy capacity is biogas-fired, which is also subsumed as "gaseous biomass".

The ministry said with the bulk of Germany's bioenergy plants built between 2004 and 2011, "many" are now nearing the end of the 20-year subsidy period, while the biomass tenders are "massively" oversubscribed. "We recognise these worries," the ministry said.

"Thousands" of small plants will be forced off line in the next years, with "hundreds" already facing this situation by the end of this year, renewables association BEE president Simone Peter said yesterday.

Under the future biomass tenders, preference will be given to plants connected to a heating grid or a building grid which provides heat for up to 16 buildings. Existing plants will also be able to take part in the new tenders, and will be incentivised to quickly switch to the new model, as this would extend their subsidy period.

Flexible power generation will be incentivised by restricting subsidies to "eligible" operating hours. Biogas plants will also see their so-called flexibility surcharge "improved".

Industry associations welcomed the ministry's plans, which climate action minister Robert Habeck had aired for the first time in an interview at the weekend.

Bioenergy industry association BBE reiterated its demands for a near-doubling of the flexibility surcharge to €120/kW from €65/kW.

Running flexibly is a financial and operational challenge for biogas plants, because they cannot simply ramp up and down as, among other things, fermentation would become out of control. Flexibility is only possible by investing in additional capacity: heat storage, biogas storage and/or generation capacity — hence the flexibility surcharge.

Over the past few years Germany's bioenergy sector has pushed for bioenergy to be included, and supported, in a future renewables-based power system. Germany's biogas industry has repeatedly stressed that given the necessary investments in flexibility, the current 6GW of biogas capacity could be doubled by 2030 and go up up to 24GW in 2045, without the need for any additional crop input, rendering superfluous most hydrogen peak power plants.

The ministry said the new legislation will create "investment security" for the bioenergy sector while also paving the way for the future of bioenergy in the planned capacity market.

By Chloe Jardine

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