Published 2Q Mackinnon Lawrence Senior Analyst. Kerry-Ann Adamson, Ph.D. Research Director

Transcription

1 EXECUTIVE SUMMARY: Renewable Biogas Methane Recovery and Utilization in Landfills and Anaerobic Digesters: Municipal Solid Waste, Agricultural, Industrial and Wastewater Market Analysis and Forecasts NOTE: This document is a free excerpt of a larger report. If you are interested in purchasing the full report, please contact Pike Research at sales@pikeresearch.com. Published 2Q 2012 Mackinnon Lawrence Senior Analyst Kerry-Ann Adamson, Ph.D. Research Director

2 Section 1 EXECUTIVE SUMMARY 1.1 Overview With broad applications across rural and urban communities worldwide, biogas is gaining traction as a versatile energy carrier with significant potential to meet growing demand within the power, heat, fuel, and chemical markets. A byproduct of anaerobic digestion (AD), a process in which microorganisms break down organic matter in an oxygen-starved environment, and historically, one of the oldest processing technologies used by mankind, biogas for commercial use is captured in modern landfills (LFGTE) and bio-digesters treating a range of organic waste streams. As a stable and well-understood process, biogas industry scale up will hinge on innovative applications and business models rather than breakthrough technologies. After nearly a decade of strong growth, current installed global production capacity is more than 800 billion cubic feet per year, representing nearly 14.5 GW of installed distributed and grid-scale renewable generation capacity. Although a relatively minor player within bioenergy, the fast-growing biogas market reached $17.3 billion in global revenue in Benefitting from accelerating interest in waste management strategies, an increased focus on greenhouse gas mitigation, and renewable fuels production, the biogas market is expected to reach $33.1 billion by In 2012, an estimated 576 landfills across the United States captured biogas from decomposing municipal solid waste (MSW) while more than 7,000 on-farm AD facilities across Germany produced an estimated 2,291 megawatts (MW) of power from manure waste and crop residues. A growing segment within the diverse biogas landscape, at least 11 billion cubic feet per year of renewable natural gas (RNG) production capacity is expected to come online worldwide by the end of While opportunities abound for high-btu RNG in gas-to-grid injection and vehicle fuel applications, low fossil natural gas prices are expected to impede market growth. 1.2 Market Assessment As a waste management tool, biogas capture is a proven strategy for reducing methane emissions, a greenhouse gas 20 times more potent than carbon dioxide (CO 2 ). By treating a variety of waste streams, biogas production and utilization can reduce the environmental and socioeconomic impact of decomposing organic matter while producing a range of valuable co-products. A number of countries are ramping up biogas targets as a strategy for addressing these diverse challenges while also meeting growing demand for renewable energy. While the capture of biogas at landfills is relatively common in advanced economies, distributed bio-digesters are still gaining traction in a wide range of commercial applications, including concentrated animal feeding operations (CAFOs), industrial food processing facilities, and biofuels production facilities. Today, biogas is used predominantly for electricity generation and in combined heat and power (CHP) plants. A range of co-products allow for multiple revenue streams and lower barriers to profitability. This Pike Research report provides a comprehensive analysis of the market dynamics and technology issues that will affect the production of medium- and high-btu biogas over the next decade. Growth forecasts through 2022 and profiles of key players across the waste, agricultural, industrial, and sewage treatment value chains are 1

3 included. Analysis focuses on major geographic regions, as well as seven key markets: United States, Canada, Brazil, Germany, China, Japan, and South Africa. 1.3 Market Forecast Germany remains the outright leader in biogas utilization, but with the domestic market becoming increasingly saturated, firms are expected to continue venturing abroad to seek low-hanging opportunities in markets with significant upside. Accordingly, biogas scale up is expected to accelerate across Europe, Asia Pacific, and key developing markets. Although biogas potential is substantial in the United States, the combination of low natural gas prices, unstable policy, and a challenging regulatory environment is expected to restrict industry growth over the next decade. While the biogas industry benefits from a range of potential drivers, growth will be greatest in those countries where a combination of increased demand for renewable energy, distributed infrastructure, stable policy, and waste management initiatives will drive increased investment. By 2022, the biogas industry is expected to reach an installed global production capacity of 1.6 trillion cubic feet per year. This represents 29.5 gigawatts (GW) of installed generation capacity and 86 billion cubic feet per year of RNG production. Chart 1.1 Biogas Market Value by Region, World Markets: $35 $30 $25 North America Europe Asia Pacific Latin America Middle East/Africa ($ Billions) $20 $15 $10 $5 $ (Source: Pike Research) 2

4 Section 8 TABLE OF CONTENTS Section Executive Summary Overview Market Assessment Market Forecast... 2 Section Market Issues Biogas Overview What is Biogas? Biogas Value Chain Biogas Feedstocks Biogas Applications Market Trends Why Biogas? Biogas as a Renewable Resource Substitute for Fossil Fuels Greenhouse Gas Abatement Environmental Benefits Valuable Co-Products Role of Biogas in Energy Markets Global Biogas Utilization AD Market Snapshot LFGTE Market Snapshot Electricity Markets Low Cost Power Flexible Resource Utility Grid On-site Generation Centralized Anaerobic Digestion (CAD) Renewable Natural Gas (RNG) Heating and Cooling Markets Transportation Fuels Biogas Market Drivers Integrated Waste Management Biogas and Waste Hierarchies Biowaste Ownership Environmental Regulations Energy Security Biogas and Natural Gas Biogas and Oil Biogas and Domestic Energy Incentives, Mandates, Grants, and Loans Financial Incentives Feed-in Tariffs Tax Credits Environmental Attributes Mandates

5 Mandates -- United States Perspective Mandates European Perspective Mandates Chinese Perspective Kyoto Protocol Clean Development Mechanism Biogas Market Barriers Cost AD Economics Landfill Gas Economics Biogas Upgrading Policy Uncertainty Permitting and Regulations Public Acceptance Section Technology Issues Technology Overview Typical System Components Technology Considerations Smart Process Monitoring Technology and Market Maturity Capture and Conversion Anaerobic Digesters Why AD? AD Systems AD Technical Considerations Pretreatment Technologies AD Utilization AD Innovations Landfill Gas Recovery Estimating LFG Potential LFG Extraction Vertical Wells Horizontal Wells LFG Collection, Flaring, and Utilization Biogas Utilization Direct Use Electricity Generation Vehicular Use Biogas Upgrading Water Scrubbing Organic Physical Scrubbing Chemical Absorption Pressure Swing Absorption (PSA) Membrane Scrubbing Cryogenic Technology Section Key Industry Players Acrona Systems ADI Systems Bekon Biogas Nord BiogenGreenfinch Biothane BTA International

6 4.8 DTE Biomass Energy DVO Clean Energy Renewable Fuels (CERF) Eisenmann Corporation EnviTec Biogas USA Inc Farmatic Harvest Power Kompogas MT-Energie Organic Waste Systems Progressive Waste Solutions Ros Roca Environment Schmack Biogas Tamar Energy UEM Valorga Waste Management WELtec BioPower GmbH Section Market Forecasts Methodology Influence of Waste Management Policies Other Market Assumptions Biogas Market Revenue Forecasts By Region By Industry Raw Biogas Production Capacity Forecasts Production by Region Production by Industry North America Europe Asia Pacific Installed Generation Capacity Forecast Renewable Natural Gas Production Capacity Forecast Country Forecasts Germany China United States Section Company Directory Section Acronym and Abbreviation List Section Table of Contents Section Table of Charts and Figures Section Scope of Study Sources and Methodology Notes

7 Section 9 TABLE OF CHARTS AND FIGURES Chart 1.1 Biogas Market Value by Region, World Markets: Chart 2.1 Typical Composition of Biogas from Landfill Gas Recovery... 4 Chart 2.2 Potential Biogas Yield by Substrate... 6 Chart 2.3 LFG Biogas Utilization by Application, United States: Chart 2.4 Share of Biogas Systems by Type, World Markets: Chart 2.5 Share of Anthropogenic Methane by Source, World Markets: Chart 2.6 Potential Reduction of Baseline Emissions by Source, United States Chart 2.7 Share of Commercial AD Deployments by Industry Segment, World Markets: Chart 2.8 Share of LFGTE Deployments by Region, World Markets: Chart 2.9 Methane-Powered Vehicles in Use by Region, World Markets: Chart 2.10 Spot Price of Natural Gas by Market, World Markets: Chart 2.11 Average Gasoline Gallon Equivalent Price by Fuel, United States: Chart 2.12 Biogas Tariffs by Country, World Markets: Chart 3.1 On-farm AD Deployments by System Design, United States: Chart 3.2 Share of Biogas Upgrading Deployments by Technology, World Markets: Chart 5.1 Biogas Market Value by Region, World Markets: Chart 5.2 Biogas Market Value CAGR by Region, World Markets: Chart 5.3 Biogas Market Value by Industry, World Markets: Chart 5.4 Raw Biogas Annual Production Capacity by Region, World Markets: Chart 5.5 Raw Biogas Annual Production Capacity by Industry, World Markets: Chart 5.6 Raw Biogas Annual Production Capacity by Industry, North America: Chart 5.7 Raw Biogas Annual Production Capacity by Industry, Europe: Chart 5.8 Raw Biogas Annual Production Capacity by Industry, Asia Pacific: Chart 5.9 Installed Biogas Generation Capacity by Industry, World Markets: Chart 5.10 RNG Annual Production Capacity by Region, World Markets: Chart 5.11 Raw Biogas Annual Production Capacity, Germany: Chart 5.12 Raw Biogas Annual Production Capacity by Industry, Germany: Chart 5.13 Raw Biogas Annual Production Capacity by Industry, China: Chart 5.14 Raw Biogas Annual Production Capacity by Industry, China: Chart 5.15 Raw Biogas Annual Production Forecast by Industry, United States: Figure 2.1 Biogas Value Chain... 5 Figure 2.2 EU Waste Management Hierarchy Figure 2.3 Snapshot of Waste Lifecycle Figure 3.1 Anaerobic Digestion Process Stages Figure 3.2 Pretreatment Options Figure 3.3 Biogas Utilization Pathways

8 Table 2.1 Summary of Renewable Portfolio Standards, United States: Table 2.2 Typical LFG Project Costs Table 3.1 Characteristics of LFG Extraction Strategies Table 3.2 LFG Collection Efficiencies Table 3.3 Biogas Utilization Efficiency in Conversion Technologies Table 3.4 Typical Upgraded Biogas Composition (RNG)

9 Section 10 SCOPE OF STUDY Pike Research has prepared this report to provide participants at all levels of the biogas market, including investors, researchers, and industry players, with a study analyzing the global market outlook through The objective of the report is to identify and evaluate the major opportunities and challenges facing the industry, as well as the potential revenue that could be generated by new trends, economic developments, policies, and regulations. This report also provides a review of key market players and established technologies, as well as market contenders and emerging technologies, including both thermal and biological WTE conversion pathways. The report s purpose is not to provide an exhaustive technical assessment of the technologies and markets covered, but rather a strategic examination from an overall tactical business perspective. Pike Research strives to identify and examine new market segments to aid readers in the development of their business models. All major global regions, as well as landfill and AD applications are included. SOURCES AND METHODOLOGY Pike Research s industry analysts utilize a variety of research sources in preparing Research Reports. The key component of Pike Research s analysis is primary research gained from phone and in-person interviews with industry leaders including executives, engineers, and marketing professionals. Analysts are diligent in ensuring that they speak with representatives from every part of the value chain, including but not limited to technology companies, utilities and other service providers, industry associations, government agencies, and the investment community. Additional analysis includes secondary research conducted by Pike Research s analysts and the firm s staff of research assistants. Where applicable, all secondary research sources are appropriately cited within this report. These primary and secondary research sources, combined with the analyst s industry expertise, are synthesized into the qualitative and quantitative analysis presented in Pike Research s reports. Great care is taken in making sure that all analysis is well-supported by facts, but where the facts are unknown and assumptions must be made, analysts document their assumptions and are prepared to explain their methodology, both within the body of a report and in direct conversations with clients. Pike Research is an independent market research firm whose goal is to present an objective, unbiased view of market opportunities within its coverage areas. The firm is not beholden to any special interests and is thus able to offer clear, actionable advice to help clients succeed in the industry, unfettered by technology hype, political agendas, or emotional factors that are inherent in cleantech markets. 85

10 NOTES CAGR refers to compound average annual growth rate, using the formula: CAGR = (End Year Value Start Year Value) (1/steps) 1. CAGRs presented in the tables are for the entire timeframe in the title. Where data for fewer years are given, the CAGR is for the range presented. Where relevant, CAGRs for shorter timeframes may be given as well. Figures are based on the best estimates available at the time of calculation. Annual revenues, shipments, and sales are based on end-of-year figures unless otherwise noted. All values are expressed in year 2012 U.S. dollars unless otherwise noted. Percentages may not add up to 100 due to rounding. 86

11 Published 2Q Pike Research LLC 1320 Pearl Street, Suite 300 Boulder, CO USA Tel: This publication is provided by Pike Research LLC ( Pike ). This publication may be used only as expressly permitted by license from Pike and may not otherwise be reproduced, recorded, photocopied, distributed, displayed, modified, extracted, accessed or used without the express written permission of Pike. Notwithstanding the foregoing, Pike makes no claim to any Government data and other data obtained from public sources found in this publication (whether or not the owners of such data are noted in this publication). If you do not have a license from Pike covering this publication, please refrain from accessing or using this publication. Please contact Pike to obtain a license to this publication. 87