Investors ready for Irish biomethane facilities as demand for green energy soars

There is strong sectoral interest in the development of a biomethane industry in Ireland, according to several speakers at a Gas Networks Ireland event in Dublin. The RFI (Request for Information) gathering was attended by over 200 people from across Ireland and these included producers, suppliers, policymakers, funders, legal practitioners, and consultants. There was sizeable attendance from companies and producers in the north of Ireland, where 85 anaerobic digester plants are already operating.

Gas Networks Ireland is currently running an RFI to determine where current and future biomethane producers are planning to build biomethane plants to bring this renewable gas onto the network. This is open until December 19^th next and submissions can be made at www.gasnetworks.ie/rfi

Biomethane is fully compatible with the national gas network and existing appliances, technologies and vehicles. It seamlessly replaces natural gas to reduce emissions in heating, industry, transport and power generation, while also supporting the decarbonisation of the agri-food sector. Structurally identical to natural gas, biomethane is a carbon neutral renewable gas that can be made from farm and food waste through a process known as anaerobic digestion.

Russell Smyth, Head of Sustainable Futures at KPMG said that while historically the policy focus has been on decarbonising the electricity system, with wind and solar dominating, the greater focus on thermal and agricultural decarbonisation has brought biomethane back in vogue.  With the war in Ukraine, huge increases in gas prices and concerns around security of supply, biomethane is increasingly recognised as a uniquely positioned and flexible renewable technology: 

“This momentum has translated into a significant increase in capital targeting the sector, with the number of UK and Irish funds with biomethane appetite increasing from 5 to nearly 40 in the space of 12 months. Ireland’s key challenge is whether it is able to provide the right policy and investment environment to attract this wall of capital, valued at up to €53trn.

“Like any emerging sector, there are challenges to overcome.   While the first Irish policy support is in the pipeline, it is essential that it provides a framework which delivers long-term price certainty for the biomethane producers and ensures that the planning and permitting process is aligned to the specific needs of the sector.”

Cathal Fitzgerald, Head of Food and Agricultural Investments at the Ireland Strategic Investment Fund (ISIF) said that the ISIF – which is part of the National Treasury Management Agency (NTMA) – could be an enabler in terms of how that private capital is accessed in terms of investment in the sector.

He said that ISIF can invest and intervene in parts of the economy where capital flows are not currently going, and that part of the State agency’s remit is to bring in capital by being seed investors or funding the provision of cornerstone capital.

While Food and Agriculture is one of the four investment divisions of ISIF, this area (biogas) spans across the divisions of Climate and Indigenous Business too. €9bn is the total fund size of the ISIF and at least €1bn will be put behind climate initiatives, including new sources of green energy. Fitzgerald said that ISIF would collaborate with industry and investors, and that they would be happy to work with the co-op sector as a platform to aggregate this.

The Irish Government’s target is that green biogas should provide 10% of the country’s gas needs by 2030. Given this target has been identified as requiring 5.7TWh of biomethane production, there is a need to scale up quickly to prepare and deliver this renewable gas.

Minister for Environment, Climate and Communications, Eamon Ryan said: “Delivery of 5.7 TWh of indigenously produced biomethane will be aided by the introduction of the Renewable Heat Obligation — designed to support and encourage indigenously produced biomethane. I will be working closely in partnership with the Minister for Agriculture, Food and the Marine to realise the potential of this sector. This is a great opportunity for Irish farm families to diversify and increase their incomes. Farms across the country can now produce clean, green food and clean, green energy, two premium products with high potential returns.”

Gas Network’s Ireland Biomethane Programme Manager Padraig Fleming said he was delighted with the strong turnout at the RFI event in the Clayton Hotel in Ballsbridge, last Tuesday, November 28^th : “It is clear the increased focus by Minister Ryan in recent weeks in increasing the targeted volume of biomethane by 2030, the approval of the rollout of the Renewable Heat Obligation and of Gas Networks Ireland as the green gas certifying body lays down a marker for all of us in the industry to accelerate this renewable sector and play our part in addressing climate change”.

“This really sends out a strong signal that the hunger and appetite is there for biomethane production in Ireland. It’s a very flexible gas that contributes to the circular economy, as farm and food waste can be treated to produce renewable gas, and the by-products include a digestate that can be re-used as fertilizer and carbon dioxide, which other industries utilise.

“With EU identifying Ireland as having the highest potential per capita to produce biomethane, it will also play a major role in Ireland and the EU’s commitment to becoming an energy-efficient, low carbon economy. 

“An indigenous biomethane industry would not only support the decarbonisation of the agricultural sector, but it would also provide significant opportunities for rural communities and facilitate sustainable circular economies.”

The event also heard from three representatives from Denmark, where – in the space of 10 years since the first large scale biomethane plant was built there – biogas now contributes to 34% of gas used on the national grid there. Henrik V Laursen, CEO of Bigadan – who own and operate large scale co-digestion biogas plants – said that Denmark has succeeded by going from “farm-scale to largescale:”

“In 2014, we had our first green field plant and this year we are building a plant that will be able to produce up to 800GWH annually.  Sources of waste would include potato and beet pulp, agricultural waste, straw, fish waste, manure and deep litter, slaughterhouse waste, household and ‘big kitchen’ waste.

“Biogas is also used by the transport sector in Denmark, and we can provide CO2 ‘on tap’ for Danish industry for production processes. Denmark’s success in this area came about from all the players getting together and seeing what would work best; then scale and subsidises have really driven that”.

Rasmus H. S. Jensen of Energinet, the Danish Transmission System Operator (TSO) said the political target is to have 100% green gas on the network there by 2030. He said that the development is driven by reduction in demand for gas to heating and power - and partly by increasing levels of biomethane production - which means the share of biomethane increases quickly. The development of the sector is “partly driven by political ambitions,” according to Jansen: 

“The importance of security of supply and a green energy supply was very important for Denmark, and we always focus on the socio-economic perspective, when Energinet takes investment decisions in gas infrastructure. We currently have 54 biomethane facilities with around eight under construction, with over 65 in the pipeline. With similar size, population, and a large agricultural sector like Denmark, I do see a potential for Ireland in achieving a strong development in biomethane

“Given that gas as a fossil fuel is now almost more expensive than production of biomethane, there really is a good opportunity for the industry to prosper here and – like Denmark – it will really help in reducing carbon emissions and building a strong security of supply.”

Gas Networks Ireland is requesting information from biomethane producers before 19 December on www.gasnetworks.ie/rfi