Biomethane to Grid Project Overview - April 2014

Biomethane to Grid Market Update 12th April 2014

John Baldwin Managing Director CNG Services Ltd

john.baldwin@cngservices.co.uk www.cngservices.co.uk 0121 247 8160

Biomethane Market Overview

1. CNG Services Ltd 2. Biomethane Benefits 3. Project Review 4. Conclusions

CNG Services Ltd • Supports projects to inject biomethane into the gas grid

– Didcot, Poundbury, Vale Green, Doncaster, Minworth etc.

• Bio-­‐CNG as a fuel for trucks

– Own UK’s largest CNG filling staVon – Sell Bio-­‐CNG (20% biomethane)

We are gas engineers

Crewe CNG Sta=on • Filling dual fuel trucks for GIST/M&S, Brit European, Tenens hbp://www.youtube.com/watch?v=orxBtoXyjos

Largest grid supplied CNG staVon in UK – now selling biomethane via Green Gas CerVficates

Our Biomethane Projects Team • Biomethane Projects – Iain Ward, Lee Firth, Alison Cartwright, Terry Williamson, Robert McKeon, Greg Lee, Phil Winnard, Michael Foulds, Jackie Harrison

• Pipelines and Compression Projects – Ian Roughley, Bob Ingmire, Mick Beddows (LTS), Tony Pym, Mihaly Papp, Neil Morbey

• Commercial (RHI, NEA etc.)

– Peter Rayson

• Project Support – Angela Bagshaw, Chris Toase, ChrisVne Venables, Lauren Hamer

We support Biomethane Projects for a living

What I said in May 2013 Annual Biomethane to Grid and RHI for 2012-­‐2015

BtG and RHI Trend 1.000

£70,000,000

0.900

Total TW to Grid

0.700

£50,000,000

0.600

£40,000,000

0.500 0.400

£30,000,000

0.300

£20,000,000

0.200

£10,000,000

0.100 0.000 2012

2013

Year Total Therms to Grid per annum Total TW per annum RHI per annum

RHI

£60,000,000

0.800

2014

£0 2015

2012

2013

2014

2015

305,476

9,558,138

26,644,951

31,584,558

0.009

0.280

0.781

0.926

£632,335

£19,785,346

£55,155,049

£65,380,035

Annual Biomethane to Grid and RHI for 2012-­‐2015 Forecast Biomethane to Grid & RHI Awarded per Financial Year

TWh/Annum 2.50

£148,736,270

RHI/Annum £160,000,000

£140,000,000 2.00 £120,000,000

£88,005,740

£100,000,000

1.50

£80,000,000 1.00

£60,000,000

£40,000,000 0.50

£4,943,425

£20,000,000

£778,719 0.00

£0 2012

2013

2014

2015

Biomethane to grid likely to be largest RHI technology

Benefits -­‐ CO2 Impact • Forecast 1.8 TWh injected into gas grid in 2015 • 130,000 tonnes of gas • 130 x (44/16) = 360,000 tonnes of CO2 saved at the burner Vp • Marginal gas to UK is Qatar LNG • The 130,000 tonnes of biomethane displaces 130,000 tonnes of LNG – 15% higher CO2 than UKCS gas on a “Well to Tank” basis – 7-­‐9% CO2 vented in Qatar – So around 50,000 tonnes on top

• So, around 400,000 tonnes/annum benefit • Material contribuVon towards 2020 renewable energy targets

Benefits – Reduc=on in Sale of Ferraris • 130,000 tonnes of avoided LNG imports • Just over 2 LNG tankers full • Around £40 million saved • This would allow Qatar to purchase around 250 Ferraris • Or we can fund refurbishment of around 4,000 homes per year which give around 50% gas demand reducVon

Benefits – Investment and Jobs • 20 projects being built in 2014 • EsVmated capex of £150 million • EsVmated 70 -­‐ 80% UK content – – – –

Civils UVliVes InstallaVon Pipelines/Grid InjecVon Plant/Propane

• We need to quanVfy the % UK content • Jobs – well CNG Services has 18 staff compared to 3 before biomethane • Companies in this room – DECC funding has established a compeVVve supply chain

Benefits – Using the Gas Grid • UK has great gas grid – 85% of domesVc market connected to grid – 95% of industry – Power generaVon back up to wind

• To build gas grid and central heaVng etc would cost around £100 billion • It’s a vital UK asset • We can’t afford not to use it • All our Grid Owners are very supporVve and have ceated an abracVve regime to allow projects to go ahead at lower cost/quicker – See NG and SGN PresentaVons today

Benefits – Promo=ng Low Carbon U=lisa=on • Green Gas CerVficates are a great way to promote low Carbon and efficient gas uVlisaVon opVons – – – –

Sainsbury’s – CHP Duchy of Cornwall – new housing Brit European – CNG trucks Eon – new housing with district heaVng

Rainbarrow Farm at Poundbury UK’s first commercial project Membrane CO₂ removal plant Gas injected into 2 bar grid 500 kwh CHP The development is a joint venture between Duchy of Cornwall and some of its tenants • Achieving > 95% availability • • • • •

Flow of biogas -­‐ 500 m3/hr First gas to grid – October 2012

Vale Green • Membrane and cryogenic CO₂ separaVon plant • Separated CO₂ used to grow more tomatoes • 75% gas to grid with a 490kWh CHP • 7 bar gas grid

Flow of biogas -­‐ 600 m3/hr First gas to grid – August 2013

Future Biogas Doncaster • • • •

Agricultural feedstock 80% gas to grid – with 499kWh CHP Membrane CO₂ removal plant 7 bar gas grid

Flow of biogas – 900 m3/hr First gas to grid – October 2013

ReFood Widnes • Food waste feedstock • 100% gas to grid • Water-­‐wash CO₂ removal plant • 2 bar gas grid • A major CO2 win for UK plc • Is there a beber gas to grid project on Planet Earth? Probably not….

Flow of biogas – EsVmated 2,000 m3/hr First gas to grid – EsVmated Q2 2014

Severn Trent Water Minworth • Sewage feedstock • 20% gas to grid – with exisVng 7MW CHP • Water-­‐wash CO₂ removal plant • 20 bar LTS grid • Blending allowed so minimal propane

Flow of biogas – EsVmated 1,200 m3/hr First gas to grid – EsVmated Q2 2014

Other Projects in 2014 • • • • • • • • •

Crouchlands Farm Northumbrian Water Howdon Wessex Water Avonmouth Euston Estates Chibering Greener for Life Fraddon Wyke Farms Apsley farms Coupar Angus In total 21 projects being completed in 2014 and around 17 more in 2015

Biomethane to Grid Conclusions • It has taken 6 years but the regime looks good: • 20 projects to be built in 2014

• Majority of biomethane from waste feedstock • Significant benefits • • • • •

Lower CO2 Lower imports of high CO2 and expensive LNG Capex with high UK content Jobs Use of gas assets

• We have created a very good industry in a short Vme

The biomethane market is set to grow, delivering significant benefits and helping meet 2020 renewable energy targets