Will the next government reduce public aid for biomethane production, to the great dismay of the gas industry? And for good reason, the latter has defended tooth and nail the revaluation of the feed-in tariffs from which the producers of this “green” gas benefit. This is at least one of the avenues that the Energy Regulatory Commission (CRE) strongly recommends in a report published on Wednesday.
Methanizers: the State ready to strengthen controls to stop abuses
Methanizers, these large cylindrical tanks topped with a dome and which grow in the countryside, make it possible to produce biogas through the fermentation of organic waste and, in particular, agricultural waste. Treated and purified, this biogas becomes biomethane and is then injected into the historic natural gas network, which emits much more CO2.
Most methanizers show high profitability
To support its growth in a logic of decarbonization, the State has for several years put in place a system guaranteeing its producers, mainly farmers, a buy-back price within the framework of contracts lasting 15 years. For the year 2024 alone, the cost of this public support by tariff decree should amount to around one billion euros. A considerable sum in a context of budgetary crisis.
However, in its new report, relating to a vast audit of the technical and economic data of some 700 methane digesters spread across the territory, the energy regulator points to the high profitability of the vast majority of these installations.
“The median profitability level is high (13.9%) and three-quarters of facilities have an internal rate of return (IRR) above 10%, although we see a strong disparity between facilities. This is a point that alerts us, because we consider that an IRR of 10% already constitutes a satisfactory level », explains Anne-Sophie Dessillons, director of market development and energy transition at CRE.
A posteriori, a revaluation deemed unnecessary
For the record, in June 2023 the sector obtained a revaluation of the biomethane buy-in tariff of 12% in order to preserve the economic balance of these production sites, faced with an increase in their investment costs linked to inflation and to an increase in their operating costs due to the surge in the price of electricity, necessary for the operation of the methane digesters. This revaluation applied to new installations, but also to methane digesters already in service.
“Opex costs [de fonctionnement, ndlr] and Capex [d’investissements]did record a jump in 2023, but they quickly returned to normal. From 2024, investment costs have returned to the pre-crisis downward trend. As for operating costs, these were notably driven by the rise in electricity prices, which are also returning to a reasonable level, even if they remain at a higher level than before the crisis »explains Anne-Sophie Dessillons. “ With hindsight today and according to our calculations, we believe that, for the vast majority of installations, the revaluation of biomethane purchase prices was not necessary. », she concludes.
Lower feed-in tariff and much more targeted subsidies
Based on this observation, the CRE recommends downwardly adjusting the sector’s support tariff framework. and especially for new installations. How big should this reduction be? “ We cannot comment at the moment, there is still a lot of work to be done to define what a fair level of feed-in tariff could be. Because, beyond the TRI, we must also take into account the additional income received by biomethane producers, such as guarantees of origin, but also integrate all the positive externalities of this activity », replies the director of market development, while anaerobic digestion is at the crossroads of agricultural issues and waste treatment.
The task is all the more difficult as the sector reveals a great disparity. Indeed, if for an overwhelming majority of methanizers, profitability is very high, 25% of them, on the other hand, display an IRR of less than 10%. “Some even display negative IRRs”underlines Anne-Sophie Dessillons.
As a first step, the CRE therefore recommends better targeting the investment subsidies from which more than 80% of methane digesters benefit, in addition to the feed-in tariff. “A significant proportion of installations already obtain, without taking subsidies into account, an IRR greater than 10%”points out the regulator in its report. “An effective measure would consist of targeting these subsidies on the quarter of installations which display unsatisfactory profitability”, believes Anne-Sophie Dessillons. Another avenue mentioned in the report would even consist of eliminating these subsidies.
Dropout in biomethane production
So many measures that should make those in the gas industry cringe. Which are betting heavily on the production of biomethane to become greener and establish themselves in the energy mix of tomorrow, alongside electrons expected to take a much more important place than today as buildings and buildings become electrified. mobility.
While the new biomethane injection capacities connected to the network are experiencing a serious halt (after exponential growth until 2021, a plateau in 2022), GRDF, the manager of the gas distribution network, ensured that the new buy-back price guaranteed by the State, put in place in 2023, made it possible to revive the sector. However, patience was required. given that a methanizer project takes on average 3 to 4 years to see the light of day.
Biogas production: the trajectory is not good, warns the State
An argument that does not seem to convince the General Secretariat for Ecological Planning (SGPE). In a publication last July, the body attached to Matignon already judged the target of 44 terawatt hours of biomethane injected into the network by 2030 “very ambitious”. “We are not on the expected trajectory to achieve the 2030 objective”noted Frédérik Jobert, deputy secretary general for ecological planning. Contacted by the editorial staff, neither GRDF nor the France Gaz professional association wished to react to the regulator’s new recommendations.
