Friday, 26 November 2021
Author: Kevin Lim
PGNiG, a Polish state-controlled oil and gas company has signed an agreement to develop the biogas sector in the country. The agreement contains details associated with development of production, management of biogas and the creation of a regulatory environment and support mechanisms to support the industry.
“When talking about solutions supporting the process of energy transformation that is safe for the Polish economy, it is impossible to ignore biomethane,” said Paweł Majewski, president of the management board of PGNiG ARE.
He also acknowledged the role of the biogas industry in handling waste for both farms and industry:
“The development of scattered installations near sources of raw materials and the processing of waste that is burdensome for the agricultural and municipal industries – all this in a very short time may contribute not only to the acquisition of a new energy source but also to solving several important environmental challenges.”
The agreement follows on from the letter of intent signed in October 2020, to establish the partnership. Early in 2020, PGNiG signed an agreement with the Polish Power Exchange (TGE) to develop a biomethane market in Poland.
Biogas has a foothold in Poland with more than 3 TWh via more than 300 plants in 2019 according to the EBA. One of the important applications for biogas is renewable electricity generation which amounted to 38 GWh in 2019 in the country. However, biomethane development has lagged behind with no currently operating facilities.
While there is no financial support for biomethane production, the agreement is a strong step towards developing support for such measures. Furthermore, the importance of biomethane in decarbonising the transport sector in Poland is acknowledged, with biomethane fuel have a zero-excise tax.
The potential for biogas and biomethane production in the country is high, considering the large population and associated waste generated which can be used as feedstock. A recent academic study suggested the potential could be over 16 TWh annually.
This is equivalent to approximately 7.5% of the total natural gas consumption in the country in 2019 (21 300 TWh as per Eurostat).
Orlen Południe, a division of state oil refiner PKN Orlen and PGNiG signed a letter of intent in May 2021 to develop biomethane plants in Poland. It was envisaged that biomethane production capacity would be increased via the construction of new plants, including one in the Ryn municipality, as well as upgrading current biogas facilities, including two in Rawa Mazowiecka and Szepietowo municipalities respectively.
Once fully operational, these three biomethane facilities should be capable of producing approximately 12 mcm/yr of renewable natural gas, or more than 120 GWh annually. However, the timeline for completion is unclear at this stage.