september 15, 2020

The Green Gas Support Scheme

Biogas upgrading; how to get support!

Key words: RHI, Biogas, incentives, support, Green gas support scheme, Biomethane, green gas

Like in other countries the UK has an incentive to promote the production of renewable green gas, currently we know this incentive as the RHI (Renewable Heat Incentive). This is soon to take a different name under new reforms coming March 2021. The Green Gas Support Scheme (GGSS) is an incentive to increase the proportion of green gas in the National Gas grid, like the RHI. It supports the production of biomethane and biomethane injection in the grid.

RHI-WHY?

Why change the RHI again? What does the introduction of the Green Gas Support Scheme entail for the biogas industry and what can project owners expect from it?

First things first, it was announced by the Department of Business, Energy & Industrial Strategy (BEIS) in the UK, that changes are made in the deadline for projects that do not qualify for a rate guarantee. The six-month extension is to better accommodate for delays caused by COVID-19 and includes projects of 600 kWth and under. The application, however, will require projects to provide evidence that they were in development prior to the extension notice.

In the past payments made to small and medium biogas systems are divided into Tier 1 and Tier 2, while systems that produce biomethane are categorized as Tier 3.  Allegedly the Green Gas Support Scheme will also be a tariff-based procedure and therefor can be compared with the RHI currently supporting the production of biomethane. The GGSS will replace the RHI when it ends in March 2021. The rate of the tariff is differentiated to reflect the production costs of biomethane on different scales. Current data shows that over 90% of biomethane is produced under 1, for plants that have been commissioned since tiering was introduced. Industry feedback is that the current tiering structure reduces the likelihood of economies of scale and deployment of large-scale biomethane AD plants. 

The Green Gas Support Scheme dedicated to the production of biomethane

The Green Gas Support Scheme is introduced and is solely dedicated to the production of biomethane, different from its predecessor. The GGSS is expected to run for 4 years and will only support biomethane that is produced from biomass feedstocks that are processed through anaerobic digestion and injected into the national gas grid (virtual pipeline article). In the future other gasses might also het support but the it is reported that UK Government is currently working on the options for supporting low carbon production and will possibly update the industry on this later in 2020.

BEIS proposes to maintain a tiered tariff. Producers receive the highest payments for the first specific amount and the lower payments for the subsequent lower amounts of biomethane injected into the grid. It also proposes to increase the amount of Tier 1 biomethane from 40,000MWh to 60,000MWh, this means an increase of the amount of gas attracting the highest level of tariff payment.

Unlike the RHI the GGSS will be financed by a Green Gas Levy and will be added on to customers’ energy bills.

The proposed tariff amount under the scheme is:

Green gas Support Scheme 
Tier 14.9-5.5 p/kWh
Tier 23.25-3.75 p/kWh
Tier 31.5-2.75 p/kWh

DMT Support – Total Solutions Provider

DMT_Green gas support scheme

The GGSS enables the UK to decarbonising the gas grid and suggest opportunity for an increase in operational capacity over the next decade. But it also offers opportunities to invest in renewable energy. An investment that is sustainable and capable of achieving ROI in approximately seven years, offers attractive prospect to funders. And thanks to the subsidies offered by GGSS sites can generate revenue instantly and generate income for years to come.

Building a new biogas facility can be complex. Take the six stages after gas leaves the digestor, for example. Pre-treatment, compression, membrane separation, propane injection, quality control and connection to the gas grid. Accountability is typically shared between several companies. A small issue can cause delays to one of these teams and cause a delay to the whole project resulting in unexpected or additional costs and unnecessary project delays.

DMT has been in the UK market since 2012 using their membrane technology for biogas upgrading and used at the majority of UK biomethane plants. Modern membrane systems such as the Carborex®MS offer a high quality, and flexible upgrading experience, compared to other traditional, complicated, or energy-intensive technologies. Business Director Stephen McCulloch has been in the biogas industry for over a decade, combining knowledge and experience has led to the total solutions provider; minimize risk and maximize revenue. Financing, design, build, installation, commissioning, operate and service are included.  A complete package with the right partners to unburden the customer and speed up the process without increasing margin on top of margins.

Knowledge and understanding of the industry and requirements to inject biomethane into the gas grid makes DMT a reliable partner to invest in renewable energy, biogas upgrading projects.

About the author

With over a decade of experience in Biogas Upgrading, Stephen McCulloch has an excellent track record and has proven himself in the biogas industry. He excels in areas including financial viability of major projects, technology identification and biomethane fuel supply chain maturity and works with industry influencers and government bodies to create a successful infrastructure for the biomethane to grid market in the UK.

Stephen has led pioneering work on ground-breaking gas to grid projects and has been at the forefront of developing the biogas industry. His creativity makes him excel in technology identification which has led to the opening of new market segments and the enhancement of business cases. Appointed UK Business Director for DMT Environmental Technology in 2017, Stephen is currently working on a few new TSP projects for delivery in Scotland and is looking toward to expanding our portfolio with Total Solutions Provider projects across the globe

About DMT Environmental Technology

DMT is a global solutions provider focused on creating a sustainable future. We are a social and environmentally responsible engineering company specialized in biogas upgrading and gas desulfurization. With over 150 references globally, we are one of the biggest biogas upgrading suppliers in the industry.