Q&A: French state auction for biomethane RGGOs

Market: Electricity, Natural gas
06/11/24

France's first auction for state-owned biomethane renewable gas guarantees of origin (RGGOs) is due to take place on 4 December. It will be run by European Energy Exchange (EEX), which also manages the French biogas registry. Argus spoke to Aude Filippi, director of business development gas and sustainability markets at EEX, about biomethane RGGOs in France and the new auctions. Edited highlights follow:

How are RGGOs currently traded in France?

All RGGOs for biomethane injected into the French gas grid are currently exchanged via the over-the-counter (OTC) market, and the transfer of ownership is done via the French biogas registry. The RGGOs are tradeable for 12 months and usable for 18 months, and are issued in monthly intervals.

The market has been growing quite significantly. Between January and September 2024, 8.5TWh of RGGOs were issued and 7.2TWh cancelled, while in 2023 there were 9.6TWh issued. Almost all of the issued RGGOs are cancelled, with very few expiring after 18 months.

Why are the biomethane RGGO auctions being launched now?

The French state owns all the RGGOs from biomethane produced from subsidised plants where the contract was signed after 9 November 2020, and now the French state wants to sell them.

Even though the contracts were signed in 2020, it takes time to put biomethane into production, so very few of the RGGOs have expired so far. But the volume being produced is growing so it is important that we now have the auctions.

What size volumes are you expecting to be in the new biomethane GOO auctions?

We expect over 80,000MWh in the first upcoming auction, with volumes likely to increase in the following sessions.

What buyers are you expecting to participate in the auctions?

Essentially it will be the members of the French biogas registry that we have connected today. And some members connected to the French power GOO auctions at EEX might participate, so we expect that it will be a similar target group, but for gas.

Will buyers be able to export the biomethane GOOs for use in other countries?

Today we are not yet connected to a hub for the international trade of RGGOs. At the moment, we are working with the hubs to get connected.

Why do the auctions have a mechanism for certain buyers to reserve volumes in the auction?

The idea is that the operator of a production device will have the ability to buy the RGGOs produced from this particular device from the French state. They are then committing for one year at least to buy these RGGOs at the auction price plus a 30pc premium.

By Emma Tribe

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