Monday, 30 August 2021
Thames Water, the privately owned UK waste water and waste treatment utility company has entered into an agreement with gas-related companies SGN Commercial Services and CNG Services for biogas operations at its sewage works.
The agreement will cover almost all aspects of biogas installations, including design, construction as well as operation and maintenance. The value of the contract is estimated at 70 million GBP.
Traditionally, Thames Water has adopted Anaerobic Digestion (AD) to produce biogas from waste water, with their annual generation amounting to approximately 800 GWh of gas from 25 waste water sites. The biogas has predominantly use in Combined Heat and Power (CHP) generation, which burns the biogas directly to produce heat and electricity.
However, Thames Water is now looking to shift from supplying biogas for CHP to upgrading their biogas to biomethane, and injecting the renewable natural gas into the national grid.
The SGN/CNG pairing will bring technical expertise to the collaboration, with SGN having worked on several biomethane plant installations in the UK, including the biomethane injection and blending hub at Portsdown Hill in Hampshire.
The first project of the trio will be the Thames Water Deephams sewage treatment plant in London. Implementation already started, and is expected to be completed by March 2022.
According to the European Biogas Association, approximately 20 TWh biogas was produced in 2019, with electricity generation from biogas amounting to 8 TWh. By contrast, total biomethane production in the UK that year was approximately 5 TWh. Given the sizeable biogas portfolio of Thames Water (800 GWh/year), this could firmly tip the balance in favour of biomethane production and grid injection.
The change in Thames Water strategy has purportedly been spurred on by CHP facilities reaching end of life (thus a reduction in CHP biogas demand), as well as the reduction in support offered to generators via Renewable Obligation Certificates (ROCs).
The UK Office of Gas and Electricity Markets (ofgem) statistics suggest sewage gas in the UK, generated between April 2019 and March 2020 accounted for approximately 630 GWh of electricity, and amounted to more than 710 000 ROCs.
Deciding between biogas for CHP and injecting biomethane depends on many factors including biogas/natural gas prices, bio-natural gas upgrading costs, green gas injection support and green certificates (such as ROCs and Renewable Gas Guarantees of Origin - RGGOs) value.
Aside from the natural gas price, compensation for injected biomethane typically comes in the form of the Non-domestic Renewable Heat Incentive (NDRHI) scheme, soon to be replaced by the Green Gas Support Scheme, in what amounts to essentially a feed-in tariff. In addition, injected biomethane is eligible to receive RGGOs, which can be used for disclosure purposes and have a value dictated by the market.
Greenfact offers specific content on RGGOs and biomethane certificates, as well as monitoring the UK ROCs market. Contact us if you would like access, or more information.