Biogas energy of Ukraine: present, past and future


The present of biogas energy of Ukraine, from an outsider’s view, seems rather unsightly. A decade has passed since the start of construction of the first biogas complexes, and all the achievements at the end of 2020 are only 0.015% of all electricity generated in Ukraine. The surplus thermal energy of cogeneration is practically not used, the production of a renewable analogue of natural gas - biomethane and the market for the most valuable product of biogas complexes - organic fertilizers from digestate are completely absent.

The reason lies, in my opinion, in the initial misunderstanding of the importance and capabilities of biogas energy on the part of the state authorities and the parliament, as well as in the absence of a well-thought-out strategy for the development of the domestic renewable energy industry.

Initially insufficient incentive measures, including low green tariff for electricity generated from biogas, did not generate interest from potential investors. As a result, over the past years, preference has been given to highly profitable projects for the production of electricity from landfill gas and the construction of a few biogas complexes at sugar factories.

Unlike a number of Western European countries, where initially high green tariffs and a set of additional incentive measures led to the massive construction of biogas complexes, in Ukraine the development of biogas industry was limited and was a merit of innovative agricultural holdings.

In the EU countries, the initial incentive for European investors to participate in biogas projects in the form of high green tariffs and strict environmental policies, once the return on capital costs had been achieved, was replaced by other incentive measures. Among which are premiums for the difference between a fixed price of electricity and its average market price, and exemption from certain taxes.

Over the past 5 years, in a number of European countries - Denmark, Sweden, the Netherlands, France, Italy and the UK - the priority in the field of stimulating biogas has increasingly been given to deeper processing of feedstock - biogas enrichment. The product of such processing - biomethane - began to be used as a carbon-free transport fuel and pumped into natural gas networks. In Germany, which with its 11 GW of biogas capacity (7.8% of total electricity production) is the undisputed leader in the global biogas energy, many biogas complexes have reoriented to flexible daily electricity production for sales during favorable pricing hours.

Currently, the state of biogas energy in Ukraine can be described in one word - survival. Chronic non-payments for generated electricity, on the one hand, and the need to repay bank loans, on the other, are exacerbated by the high costs of purchasing or growing the main raw material - silage corn.

As a result, the previously planned few projects were stopped. In addition, household waste landfills that are promising for biogas production have practically been exhausted. There are no clear signals from the involved government agencies.

Can we expect a positive reaction from government officials and members of the Parliament to the calls of the Bioenergy Association of Ukraine to realize bioindustry importance for decarbonization of industrial sectors that are inaccessible to other types of renewable generation? Should we hope for the adoption of the amendments to the current legislation to stimulate the production of biomethane? For effective participation of existing and potential biogas complexes in long-awaited auctions? In my opinion - not worth it. For a variety of reasons. Among the main ones are the dire state of the economy, a complete lack of understanding by most of the parliamentarians of the main purpose of green energy - to prevent an impending climatic catastrophe, the lack of a well-thought-out strategy for its development.

Could a green biomethane tariff be a lifesaver? In my opinion, it could not. Time to stimulate the production and development of the biomethane market in Ukraine is irretrievably lost. A green tariff for biomethane of 0.1239 euros per kWh will not save the situation. Since it means 496 euros per 1000 cubic meters of biomethane at its cost of 350 - 700 euros per 1000 cubic meters and at the cost of an equivalent volume of natural gas in the region of 150 euros. To start the development of the biomethane market in today's realities is to doom the biogas industry, at best, to stagnation.

A life-saving straw could be using the potential of biogas energy to efficiently produce another renewable gas - green hydrogen. The technology required for industrial production has long been known and tested on a complete analogue of biomethane - natural gas. With its help today almost 90% of 75 million tons of annually produced "gray" hydrogen is produced. The technology of steam reforming of biomethane is much more economically efficient than water electrolysis using renewable energy sources. When using steam reforming, neither a green tariff nor other incentives from the state will be required. At the same time, production costs are lower than in the case of water electrolysis, payback periods are acceptable for projects in comparison with "gray" hydrogen.

The production of "green" hydrogen from biomass in Ukraine has the potential to completely shift the country's existing heavy transport fleet and decarbonize the domestic steel industry.

Distributed production of "green" hydrogen from biomass for local use does not require long distance transportation and may become a reality in the near future.

Biohydrogen production can become a promising new vector for the development of biogas energy.