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Government Subsidies Make Biogas an Attractive Renewable Energy Option

09/10/2014 15:05 BST | Updated 09/12/2014 10:59 GMT

The UK's Transmission System Operator, responsible for distributing and generating electricity, recently announced that biogas, a renewable energy, could be responsible for 10% of the nation's gas output by the year 2020. If targets are met, the National Grid hopes to have 45 new biogas power stations connected to the grid within the next two years.

Biogas is typically produced from the breakdown of organic matter in the absence of oxygen, through a procedure called anaerobic digestion, whereby biodegradable materials, such as manure, sewage and plant material are broken down. This is done in tanks, so that the gas produced can be harvested. Whilst yield is not as high as fossil fuels, it is certainly an important process that should be invested in as its negative impacts on the environment are minimal.

As the world looks to break its dependence on fossil fuels, the UK government has begun subsidising the cost of biogas power plants, paying plant operators over three times the value of the fuel in a push to cut the amount of energy generated by fossil fuels in the UK. They are paid on average £1 for every cubic metre, typically worth only 30p. Seeing as biogas is harvested from waste, companies in the waste management business can make a good living off the government subsidies, provided they can afford the equipment necessary to build a plant in the first place. The subsidy system is set to change, though, with the government due to unveil new plans in the autumn. What this will entail is, thus far, a matter of speculation, but it is assumed that plants producing more biogas will be paid more for their supply.

The government subsidisation has catalysed a relentless growth in the number of biogas plants, with 45 projected to be connected to the National Grid by the end of 2016. The target then is to connect a further 35 before the end of the decade, totalling 80 biogas plants in the UK by 2020 if quotas are met. Whilst the plants themselves are a large financial outlay, it is estimated that money generated by producing biogas will pay for the cost of the plant within three years, and if the government's new plans do end up increasing financial incentives, this time frame could be even less.

Additionally, the overall price tag that comes with building biogas plants has decreased, since the process can now be done utilising lower cost plastic pipes and containers rather than steel, slashing the outlay by up to three quarters in some cases.

As well as powering the National Grid, biogas powered public transport vehicles have been invented and put into use in Sweden, Germany, and Switzerland. They are not in common usage, with an estimated 12,000 biogas powered vehicles across Europe, but increased production of biogas here in the UK means that this could become a viable option, especially as it is carbon neutral, whilst the oil derivatives used to power the majority of engine-powered vehicles are detrimental to the environment.

It's fair to say that for many years biogas has languished behind other more popular forms of renewable energy, however, following high levels of government subsidisation the sector has been given a massive boost. Only time will tell us how well it will do against other forms of renewable energy, however, the fact that biogas is produced via organic waste, which would otherwise be disposed of, not to mention the fact that the government is heavily investing in its success, means that the future for the biogas industry looks bright.

Simon Thomas, is the Managing Director of Asset International, a manufacturing firm based in South Wales that produces large diameter plastic pipes which are used in water management and biogas projects across the UK and internationally.

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