Source: Energy & Management Powernews, 05 September 2022
The German Energy Agency (Dena) has published the first report on market monitoring bioenergy on September 1. He gives a mood picture for the entire bioenergy market.
Bioenergy secured in the past year with 256 billion kWh about 10% of the German final energy consumption. Thus a realization from the first market monitoring bio energy of the German energy agency (Dena). Under the auspices of the German Federal Ministry of Economics and Climate Protection (BMWK), the market analysis of the industry is to continuously reflect the general mood in the bioenergy market in the future. At the moment, the participants assess it as quite mixed and tending to be rather good. Due to the increasing targets for renewable energies, a large part of the players sees sustainable business concepts in biomass.
For the assessment of the business situation, participants of the entire value chain for solid, gaseous as well as liquid bioenergy were surveyed. In summary, although the demand for flexible, sustainable bioenergy is increasing, its use is becoming increasingly difficult in practice due to new documentation requirements, limited technology openness and a lack of investment security. A current example is the new gas procurement levy, which, according to current regulations, must also be paid for biomethane. However, the costs for this could not be compensated due to the capped EEG remuneration when used in CHP plants, which endangers existing projects, the industry criticizes.
Differentiated sentiment of the three industries in the survey
The business situation for solid bioenergy (for example, wood pellets) was assessed by just under half of the respondents as mediocre, 44% said that the business situation had improved or not changed compared to the previous year. The future business situation in the solid bioenergy sector is assessed as rather positive by 48 % of the respondents. The future assessment is most influenced by regulatory framework conditions.
For gaseous bioenergy (for example, biomethane), 57% of respondents saw the current business situation as mediocre. At 47%, just under half of the respondents said that the business situation had improved compared with the previous year. By contrast, the situation deteriorated for 17% and remained unchanged for 37% of respondents. The prospects in the gaseous bioenergy sector are assessed rather positively, however, 60% of the respondents find it difficult or very difficult to assess the future business situation due to the regulatory framework conditions.
The business situation for liquid bioenergy (for example bioethanol) is assessed by two thirds of the respondents (67%) as mediocre, it is described as good by only 33%. The change in the situation compared to the previous year is also inconsistent: for 50% it has improved, for 50% it has worsened. The outlook for liquid bioenergy sources at the time of the survey is rather assessed as remaining favorable to unchanged.
Making framework conditions reliable and conducive
An additional problem for all three areas is the current discussion on reducing the cultivation area of renewable raw materials to count towards the greenhouse gas reduction quota by lowering the upper limit for biofuels from food and feed to zero by 2030. This underlined the fast-moving nature of the regulations, as on January 1, 2022, the upper limit was only legally set at 4.4%.
The industry players therefore placed hope in the upcoming biomass strategy of the German government to finally obtain a clear roadmap. They are critical of the fact that far-reaching regulatory adjustments will be made without this strategy. The respondents to the market monitoring agreed that bioenergy can meet or is already meeting the sustainability requirements placed on it. In order to achieve a long-term and sustainable synchronization of ecological and economic benefits of bioenergy, the connections between regulatory requirements and the development of market segments would have to be shown and discussed more transparently.
Andreas Kuhlmann, Chairman of Dena's Management Board summarized: "In order to continue to use bioenergy as efficiently as possible in the future in areas that are difficult to electrify, we need reliable framework conditions and investment security in the long term." This included regulations that included genuine flexible and grid-serving power generation from bioenergy under economic framework conditions. "The use of heat from bioenergy plants must also be more extensive, efficient and economical than has been the case to date," Kuhlmann warned.
The Dena Market Monitoring Bioenergy 2022 is available on the Internet.
Author: Susanne Harmsen
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