Trade-offs in biomethane production by substrate mixture optimization under German market conditions

Background

New regulations and market conditions in Germany affect the profitability of biomethane upgrading as a repowering option for existing biogas plants following on-site CHP utilization. These conditions present trade-off challenges between higher sustainability requirements, maintaining production capacity and new revenue opportunities. Optimization methods, such as linear programming (LP), are essential for determining the ideal substrate mixture and profitable solutions amidst multiple market conditions, plant-specific process constraints, and substrate properties.

Methods

We updated a substrate mixture optimization model within an assessment framework for the repowering of existing biogas plants (BGPs), which focuses on the operator’s perspective. By integrating multiple German biomethane markets for various BGPs, we assessed changes in the substrate mixture, GHG emissions, contribution margins, and constraint parameters to derive conclusions for operators and future framework design.

Results

Integrating market revenues and constraints can increase contribution margins by 12–55%. Additional gains can be achieved by considering multiple markets simultaneously but limited to a few BGPs. The plant-specific LP solution space and used benchmark market are decisive. The former limits the potential of high substrate-specific contribution margins, which has a significantly higher impact than the relation between plant-specific characteristics and process constraints. The advanced fuel market is currently the lead market for biomethane, incentivizing GHG-emission extensive substrates, decreasing gas production and GHG emissions but increasing levelized cost of energy (LCOE) and partially CO₂ abatement costs.

Conclusions

The key to improve profitability and to supply an increasing biomethane demand while fulfilling new requirements is a large LP solution space. Increasing market options, substrate availability, and digestion system capacity achieve this on the operator’s side. Policy makers could reduce normative requirements such as the maize cap or double counting of advanced fuels and favor high but uniform GHG requirements. Operators can prepare robustly for the future substrate mixture by adding digester volume and pre-treatment tech, ensuring long-term and diverse substrate availability, and contracts with flexible components. Although current market conditions can improve specific GHG emissions, they do not necessarily increase manure usage when other options, such as straw, are viable. Other regulatory support systems will be required to do so.