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Biometan Biogaz OZE Marek Pituła

Marek Pituła on the sectoral agreement, energy security and the role of biomethane in the future of Poland

22 November 2021

 

 

On the initiative of the government plenipotentiary for renewable energy, Ireneusz Zyska, the Minister of Climate and Environment and representatives of the biogas, transport, transmission and science industries signed on October 13, 2020 "Letter of intent on establishing a partnership for the development of the biogas and biomethane sector and the conclusion of a sector agreement" . Apart from PT Ministers, the agreement was signed by representatives of 17 entities, including such key entities for the Polish economy as PKN Orlen or PGNiG.
 

After 13 months, on November 23, 2021, we will sign (i.e. the signatories of the above Letter and a number of entities that joined the Letter at a later date) "Agreement on cooperation for the development of the biogas and biomethane sector", i.e. "sector agreement".

 

During this eventful period, practically until now, seven problem groups have been carrying out work, the effects of which are reflected in the "Agreement".

 

During this year, however, events have taken place that require an even more serious look at the issue of biogas and biomethane as an indispensable element of the energy mix.

 

There is no point in listing all the arguments for the development of this renewable energy sector (energy and utilization functions, supporting Polish agriculture, stabilizing the system and dispersing energy production), however, I would like to focus on the issue of energy security, the importance of which was shown to us by just 2021.

 

According to one of the most frequently quoted definitions of energy security, by D. Yergin, the goal of energy security is to ensure an adequate and secure level of energy supply at reasonable prices, in a way that does not threaten the basic values ​​and goals of the state. However, according to Art. 3 sec. 1 point 16 of our Energy Law - energy security is the state of the economy that makes it possible to cover the current and future demand of customers for fuels and energy in a technically and economically justified manner, while maintaining environmental protection requirements. The environmental element is important here, and that's exactly what - "covering current needs in an economically justified manner". Today (November 17, 2021), the gas price of PLN 480 / MWh was recorded on the Day Ahead Market on the Polish Power Exchange (close to the historic record of October 6 - PLN 559.20).

 

On the same day, the price of DAM electricity amounted to PLN 472, which is still about 25% less than, for example, the quotation on the same October 6 this year. (645 PLN / MWh).

 

These prices are more than twice as high as a year ago, and it is no consolation that probably (at least gas prices) will fall to an acceptable level in the summer of next year. Economic losses and feelings of insecurity are serious enough to make us become aware of the harsh reality.

 

For the first time in the history of the Polish energy industry, we have a serious problem of energy resources, resulting at this stage in extraordinary prices of energy carriers, and in the near future a potential threat to the continuity of energy supplies, both electricity and gas.

 

The current price situation on the energy market has a huge impact on inflationary processes, and in some sectors of the economy, very heavily dependent on gas, it even threatens with the suspension or significant reduction of production, this applies, for example, to the production of nitrogen fertilizers.

 

The current situation shows how important the issue of our own energy sources is for our economy.

 

The dispute over the nature of these sources is of secondary importance, it is not a dispute between conventional and renewable energy sources - we just need our own energy, which is one that we can count on regardless of the situation on the world markets or the political games of our suppliers. The "difficult" relations with our eastern neighbor, the Russian Federation, from which Poland still covers more than half of its demand for natural gas, are the best proof of the dangers of basing the domestic energy sector on imports. As part of the diversification of energy sources, the investment in the gas terminal in Świnoujście should be assessed positively. However, it is worth mentioning the recent blockage of the Suez Canal (March 23, 2021 - March 29, 2021) as a result of the ship being stopped aground. In transport through this channel, crude oil and petroleum products constitute approx. 24% of goods on the route from south to north. These are only examples that prove that, as Poland, we must strive for energy self-sufficiency to the fullest extent.

On November 17, I had the pleasure to participate in the annual Orlen Gas Meeting, where we were professionally acquainted with the situation on the natural gas market, historical, current and forecast.

 

It explains to us in a very transparent manner the reasons for this situation and how fragile our energy security is when our gas extraction meets only 1/5 of our needs. In 2019, the PGNiG group mined only 3.75 billion cubic meters in Poland. natural gas, the least since 1999. Exactly the same amount of gas (3.76 billion m3 in 2020) was imported to Poland in the form of LNG, and it was imported from several directions, mainly from the USA, but also from Qatar, Norway or Nigeria . In 2020, imports from the eastern direction amounted to 9.0 billion cubic meters, i.e. the share of Russian gas in the total natural gas imports by PGNiG remained at the level of approx. 60%. The rest of the imports were covered by the western and southern directions. Total gas imports by PGNiG in 2020 amounted to approximately 14.79 billion cubic meters, which is a volume very similar to that recorded in 2019.

 

 

The fact is that a lot is being done regarding gas safety - after 2022, the northern direction will appear in the import structure of PGNiG, related to the import of natural gas from Norway via the Baltic Pipe. In the coming years, the import of LNG is also expected to grow more clearly in connection with the expansion of the terminal in Świnoujście and the supply of liquefied natural gas from American producers.

 

Diversification of supply sources is of course necessary, but there is always an economic risk, and not only a political one. We will not send gas carriers (LNG ships) to our ports if the selling prices, e.g. in the Far East markets, will be still significantly higher.

 

In the production of electricity, we rely primarily on our own coal resources, which does not necessarily mean low electricity prices. In this case, however, we are at least certain that production will be maintained, regardless of the problems that await us caused by the necessity to shut down most of the old 200 MW units, which have already exhausted their technical resources (assumed for 25 years, increased to 37 years as a result of modernization).

 

The deteriorating situation in gas is also favored by the progressive conversion of electricity sources from coal to gas.

 

The numbers are shocking, a 1 MW power unit fired with natural gas consumes 1.6 Billion cubic meters of gas annually, which is slightly more than 10% of all imported gas.

 

In the case of the essential part of the Polish energy sector, replacing coal with gas is unrealistic - the conversion of, for example, the largest Polish power plant, Bełchatów (with a capacity of 5298 MW), would require as much as 8.5 billion m3 of gas, which is more than our entire LNG import and our own extraction.

 

In this situation, neglected so far biogas and biomethane can be a very important source of gas - biogas for heating purposes and energy production in cogeneration, biomethane for transport (both liquefied and compressed) and industrial processes.

 

Assuming that we only use 50% of the estimated biomass resources, we will be able to produce about 4 billion m3 of biomethane, which is more gas than our entire domestic production.

 

Taking into account the inevitable increase in gas demand, I can imagine that biogas and biomethane will account for as much as 10 to 20% of domestic demand, the rest will be satisfied from domestic sources and the safest possible import directions.

 

The production of 4 billion m3 of biogas (in terms of natural gas) requires the construction of about 1,000 large installations (in terms of electricity - with a capacity of approx. 2 MW). It is not an impossible task, let us remember about the famous "biogas plant in every commune" (we have only rural communes in 1523). Most of them should produce biogas - both for cogeneration and heating purposes.

 

The construction of such a number of biogas plants is PLN 22 to 36 billion (depending on the proportion between biogas plants and biomethane plants), the same as the construction of a 1,000 MW nuclear power plant, i.e. the expenditure is half as much. At the same time, 80 to 90% of construction and equipment costs can be made in Poland, providing a strong stimulus for Polish enterprises, including those that will gradually lose their share in the coal mining sector.

 

This does not mean that I am opposed to nuclear energy, on the contrary, it is necessary for us as e.g. power system stabilizer. It is also necessary to increase the RES capacity from wind and solar energy. However, I believe that as long as we can, we should operate coal-fired power plants, including those powered by lignite, until the stocks in the existing mining fields are exhausted.

 

This is not in contradiction to reducing emissions and the pursuit of climate neutrality. We have a lot to do in this area (thermal modernization, reduction of transmission losses, gradual transition to low and zero-emission transport), but we certainly will not do it if the economic system breaks down due to high energy prices or lack of it, as we have seen , is not a script.

 

 

Prioritizing the energy of biogas and biomethane does not require the depreciation of other energy sources, nor does it require extraordinary steps. It will be enough to use more common sense, not to waste time idly discussing 1 or 2 MJ energy in biomethane one way or the other, not discriminating against biogas (bows to the "green biogas card") and allowing "hybridization" understood as the interchangeable production of electricity and heat in peak demand and, for example, BioLNG in the remaining period (after all, it is the best known energy storage.

 

I hope that during the implementation of the sector agreement, we will achieve the above-mentioned and perhaps even more ambitious results. However, this requires a clear signal that biogas and biomethane are no longer "unwanted RES children".

 

The author of the article: Marek Pituła - President of the Polish Biomethane Association