What is ENGIE’s ambition when it comes to biogas?
ENGIE is positioned right along the value chain in the biomethane sector: from project development, in close collaboration with farmers, to sales to end customers. The Group’s aim is to achieve market share of 15% in France by 2023. The Group and its partners are thus set to invest €800 million by 2023 to reach 1.5 TWh per year in biomethane fed into France over this timeframe, and up to 5 TWh by 2030. Thanks to its recent acquisition of Vol- V, the Group is now the leader in biomethane in France, with nine production units and a portfolio of some 80 projects.
The Group wishes to obtain a genuine development platform in France and the Netherlands so that it can extend its international reach, particularly to countries with an attractive offer in the development of biogas projects (Brazil, Indonesia and the United States).
How is the Group working with its stakeholders, particularly the agricultural community, in the construction of this new sector?
The agricultural world is a key stakeholder for the development of biogas, since it controls the resource, and the Group wants to work closely with it to industrialize the sector and help it lower costs without jeopardizing the profitability of projects.
To this end, ENGIE has concluded during the agriculture show structuring partnerships with the National Federation of Farmers' Unions (FNSEA), the National Federation of Agricultural Equipment Use Cooperatives (FNCUMA) and the National Institute of agronomic research (INRA). These partnerships must accelerate the development of the sector while controlling the cost of public support provided by injection rates.
ENGIE is also involved in techno-centers which work will optimize the anaerobic digestion process, set up dedicated training and contribute to the dissemination of knowledge.
The Group is also developing solutions to remove barriers faced by farmers in the development of their projects. Lilibox for example, a solution developed by Crigen, overcomes injection constraints in the networks thanks to the temporary storage of biomethane in liquefied form. Other co-operations exist with start-ups to digitize the production of biomethane or to explore innovative technologies such as biological methanation.
What are the challenges in developing this sector?
Cost reduction is a major challenge for the development of green gas and concentrates most of the discussion with the State in the framework of the new multiannual energy program (PPE) which seems less ambitious than the previous one because the State wants to limit the budgetary cost, despite the positive externalities that all recognize in the sector. ENGIE wants to support the industrialization of the industry in order to lower costs and eventually achieve parity with natural gas plus carbon tax. The period 2019-2023 will be key to reach a first industrial level, provided that the sector can play on a sufficient volume effect, reason why the good target of injection to 2023 seems to be 8 or 10 TWh rather than the 6 TWh currently in the PPE project.
The Group also invests, through its regulated subsidiaries, in the adaptation of networks and storage facilities to enable the integration of green gases into an increasingly renewable energy system. We are convinced that the rapid development of green gases and cost reductions are possible provided that the French society and the State mobilize around the ambition of a decentralized and solidarity-based energy transition, closer to the resources of each territory.