November 2, 2012
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№ 10 (October 2012)

Green Light for Biopower. Russia Keen to Develop Its Biogas Potential

   Despite rhetoric to the contrary, some in authority in Russia are starting to wonder if the nation's optimism in an economy fueld by gas export revenue really can sustain itself for the long term.

By Lada Ponomareva

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   Even in spring of this year, in April, Russia's Ministry of Economic Development (MED) expected that the volume of export of Russian gas will amount to 212 billion cubic meters in 2012 and by 2015 this number could reach 253 billion. However, demand for gas, a key income producer for Russia, is declining. MED forecasts that at the end of the current year the export volume will be 193 billion cubic meters, and it will hardly reach 209 billion by 2015.

   According to Andrei Klepatch, Deputy Head of the MED, Russia appeared to be unprepared for the rampant development of the shale gas and CNG (compressed natural gas) industries worldwide and particularly in the United States and Europe. Export and consumption of Russian gas is decreasing, which forces Russia and its major gas monopolist Gazprom to revise its priorities and development strategy.

   The increasing popularity of alternative energy sources has a lot to do with this situation. Europe is showing an increasing interest in renewable and environmentally-friendly sources of energy, which makes other countries look in the same direction.

Potential is Available

   In October last year, Russian Gazprom, European gas transportation company Gasunie, machine-building company Evrotechnika and BioGazEnergoStroy Corporation signed a memorandum on mutual understanding with respect to “green gas”. According to this document, the companies, being interested in development of biogas, will consider possibilities for setting up a joint venture on the territory of Russia and the use of advantages of this fuel in EU countries. President of Gasunie Paul van Gelder noted that
“ ‘Green gas’ is becoming a real ecologically clean component of the energy balance in many countries. This is an efficient way of utilizing the renewable biomass using the existing developed gas infrastructure and huge biogas production potential available in Russia.”

   On its part, Gazprom also admitted the necessity of developing the biopower area. “Generation and utilization of the energy produced from renewable sources is becoming a more significant sector of the power industry. ‘Green gas’ plays an important role here. Russia has a great potential for its production. In the long term it can be up to 35 billion cubic meters a year,” supposed Alexander Medvedev, President of the Company.

   It is planned to set up a joint venture in the second quarter of this year and the working group of the companies must develop a plan and select a site for the future production plant before the end of 2012. As was noted by Sergey Chernin, Chairman of the Board of BioGazEnergoStroi, the construction is supposed to commence early in 2013, and the joint venture will start to deliver biogas to the market at the end of 2013 – early in 2014. Five to ten biogas stations can be built in Russia under this project, with the total capacity of approximately 50 million cubic meters (which is equivalent to 25-27 MW of electric power).

What is Biogas?

   Biogas (also referred to as “green gas”) is gas produced from organic raw materials and complying with the physical and technical requirements specific to natural gas.

   Biogas contains 55-70 percent methane, 30-45 percent carbon dioxide and also а small amount of hydrogen, hydrogen sulfide, ammonia, nitrogen, aromatic and halogen-aromatic hydrocarbons (see the diagram). It is considered that “green gas” is capable of producing more energy than other forms of alternative sources. Thus, the energy value of biogas corresponds to 60-70 percent of the energy value of conventional natural gas (approximately 7,000 kilocalories per cubic meter). 1 cubic meter of biogas can be equated to 0.7 kg of black oil fuel or 1.5 kg of firewood.

   Biogas technology started to develop actively only in the current century. The first biogas station project in Russia was realized in Kaluga Region in 2009. The diagram “biogas chemical composition” shows the process of the biogas generation.

Have You Ordered “Green Technologies”?

   Development of the industry of renewable sources of energy (as well as biogas) is a very promising area of activity. The country has great opportunities for utilization of the waste of agriculture, wood processing, food industry and town sewage treatment plants – all this can make a basis for production of biogas which is characterized by a number of advantages both for the producer and for the consumer.

Availability of raw stock for the plant.
Territorial flexibility: biogas plants can be located in any region and require no additional gas pipeline and grid infrastructure construction.
Technological flexibility: possibility of simultaneous production of  several types of energy resources (gas, motor fuel, heat, electric power).

High capital expenditure per unit of power and relatively narrow project profitability range.
Necessity of the guaranteed sale of the generated electric power – in absence  of possible sale by retail tariffs through the power grid, the list of biogas projects will be limited to those facilities which have nonstop operation and stable level  of energy consumption.

   The annual amount of organic waste in Russia is approximately 624.5 million tons, of which it is possible to produce about 31 billion cubic meters of biogas. This amount of fuel, in its turn, can produce 68,695 GW of energy and 85,869 GW of heat. Compared to natural gas, biogas production volume is rather low so far: thus, Gazprom plans to produce 528 billion cubic meters of biogas by the end of 2012. However, if we compare these two sources of energy by price, “green gas” appears to be significantly cheaper than conventional gas: in Europe, it is possible to buy 1,000 cubic meters of biogas for 200 euros, while natural gas will cost 300-500 euros per 1,000 cubic meters.

   Still, for the time being, even in spite of the significantly lower price of biogas, the Russian gas monopolist stays without rivals, though with time the company can get even more interested in the “new” source of energy. According to Andreas Toiber, Director of the strategic development department of BioGazEnergoStroy Corporation, there is a law in Europe according to which the supplier must have at least 10 percent of “green gas” in its deliveries, and if Gazprom wants to further expand its presence in the Eurozone, it must certainly pay attention to the development of “green” technologies.

   In the last month – August – several news articles regarding the construction of biogas stations were published. Thus, AltEnergo will build about 200 gas engine generator plants using biogas in Belgorod Region, and BioGazEnergoStroy Corporation is planning to build the largest biogas power station in Russia with the capacity of 4.4 MW in Mordovia by the end of 2014. Sergey Chernin noted that the Corporation plans to realize other projects as well – possibly 30 stations in more than 10 regions of Russia.

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