Biogas as Vehicle Fuel - Economic Feasibility in Austria
According to the Green Paper: “Towards a European strategy for the security of energy supply” by the European Commission COM (2000)769, twenty per cent of the final energy consumption in the transportation sector should come from alternative fuels by the year 2020, half of it from methane (i.e. cleaned biogas or natural gas) The draft of the Austrian Biomass Action Plan defines an even more ambitious target: Biogas should contribute ten per cent to the entire transportation fuel mix in Austria by 2020.
International best practice examples in Sweden and Switzerland have shown that biogas used as vehicle fuel could be economically feasible. Especially in Sweden, biogas has already been used as fuel for more than 10 years.
Due to this situation, the main objectives of this fundamental study were to examine the economic feasibility of the production and distribution of biogas used as vehicle fuel in Austria and to identify those types of local distribution systems that are already economically feasible under the present economic conditions.
In this study, a practical bottom-up approach was used. First, international best practice examples have been studied. In particular, different options for distribution- and refueling-systems have been analyzed in detail.
In a second phase, the possibility for implementation of these proven solutions in Austria has been assessed from a business point of view. The tax and legal system in Austria, as well as possible different local conditions have been considered to identify and analyze the circumstances under which biomethane projects are economically feasible in Austria.
In a third phase, a reality check has been carried out. This reality check can be seen as a showcase for illustrating the economic feasibility of innovative distribution concepts, like dedicated biogas pipelines, under the current general conditions in Austria.
Some of the most important results of this study are:
- Especially when using existing infrastructure, the use of biogas as vehicle fuel can be economically very attractive. Even double-digit project returns are achievable.
- For short transportation distances, specific costs of dedicated biogas pipelines are significantly lower than costs for transportation through the natural gas grid. These specific costs of dedicated pipelines increase with transportation distance.
- In contrast, tariffs for using the natural gas grid are charged independently from transportation distance. For public filling stations, a special flat rate is used. For all other filling stations, transportation costs are dependant on pressure level and province in which the costumer is located. Specific costs vary in a range between 0.36 cents / kWh (Vienna) and 1.34 kWh (Tyrol) on pressure level 3.
- As mayor barrier for transporting of biomethane via the natural gas network, the hourly balancing period was identified. In contrast to the Austrian situation, this barrier was abolished in Germany by stating a more flexible balancing period for biomethane feed-in.
- Transportation of biogas through trailer systems is also possible. Several suppliers of these trailer systems, mainly from Italy and South America, have been identified. Used only for natural gas up to now, these systems could be used for transportation of biogas without any modification. Typical specific transportation costs of approx. 1 cents / kWh have been calculated. This is significantly higher than the tariffs for using the gas distribution network in most areas (provinces) in Austria. Due to their high specific transportation costs, these trailer systems are economically attractive only in specific circumstances or areas.
- The attractiveness of the different refueling systems (fast fill, slow fill) depends on the individual situation. In contrast to international best practice examples, home refueling systems are uneconomical in Austria.
- By coupling fuel, electricity and heat production (tri-generation using the membrane process), energy efficiency as well as economics can be improved. In the smart grid context, this could be even further optimized by integrating the shifting of electrical loads.
The results of this study should give a first orientation to potential project initiators for assessing the economic feasibility of investment projects under their specific local circumstances.
DI Robert Hinterberger
NEW ENERGY Capital Invest GmbH
Project or cooperation partner
- Swedish Gas Centre
Ing. Friedrich Bauer GmbH