Trade-offs in the substrate mix optimization of biogas plants considering biomethane market conditions

Abstract

Background: New regulations and market conditions affect the profitability of biomethane upgrading as a repowering option for existing biogas plants following on-site CHP utilization. These conditions present challenges like higher sustainability requirements and opportunities in new markets and higher revenues. Finding the optimal substrate mix and profitable solutions across multiple market conditions, plant-specific process constraints, and substrate properties requires optimization methods like linear programming (LP). Methods: We developed a substrate mix optimization model within an assessment framework for repowering existing biogas plants (BGPs). By modeling different variations of the German biomethane markets and conducting a sensitivity analysis for various BGPs, we assessed changes in the substrate mix, GHG emissions, contribution margins, and constraint parameters to derive conclusions for operators and future framework design. Results: Integrating market revenues and constraints into the substrate mix optimization can increase contribution margins by 12–55%. The gains increase by considering multiple markets simultaneously but are limited to a few BGPs. The plant-specific LP solution space and setting of the benchmark are decisive. The former limits the potential of high substrate-specific contribution margins, which has a significantly higher impact than the relation between plant-specific characteristics and process constraints. The advanced fuel market is the lead market for biomethane, incentivizing low yield and GHG emission substrates, decreasing gas production and GHG emissions but increasing LCOE and partially CO2 abatement costs. Conclusions: The key to improving profitability is a large LP solution space to supply an increasing biomethane demand while fulfilling new requirements. Increasing market options, substrate availability, and digestion system capacity achieve this. Another way is by reducing normative requirements such as a maize cap or double counting of advanced fuels and favoring high but uniform GHG requirements and low GHG emission substrates. Operators can prepare robustly for the future substrate mix by adding digester volume and pre-treatment tech, ensuring long-term and diverse substrate availability, and sales contracts with flexible components. Although current market conditions improve GHG emissions, they do not necessarily increase manure usage when other options, such as straw, are viable. Other regulatory support systems will be required to do so.