Biogas from kerbside waste collections to be mixed into natural gas network next year

Saturday, 8 April 2023

Biogas is in the pipeline.

Gas distributor First Gas has agreed to turn the biogas produced from organic waste collected from Auckland homes into a product that it can mix with natural gas and pipe to customers.

Its agreement with biogas producer Ecogas means that waste collected by Auckland Council, and other food waste processed by Ecogas, should be providing enough non-fossil-fuel gas to supply the equivalent of up to 7200 homes from March next year.

The deal comes as government officials prepare a new national energy strategy, and as pressure mounts on the gas industry to demonstrate a credible path towards sustainability.

Ecogas opened a facility at Reporoa near Taupō in October that can digest organic waste into a roughly ‘60:40’ mix of methane and carbon dioxide.

First Gas future fuels manager James Irvine said First Gas had now committed to invest in the equipment needed to filter out the methane from the carbon dioxide and other impurities, so it could be injected into its network.

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GasNZ is advocating for a rule requiring at least 5% of gas to come from sustainable sources, potentially including biogas and so-called “green hydrogen”, by 2030.

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The “biomethane” will be mixed with natural gas – which is also mostly methane – and piped to customers through First Gas’ network, avoiding the release of about 11,000 tonnes of CO2 per year.

The carbon dioxide that is stripped from the biogas will be piped to a horticultural firm which will use it to promote growth in its greenhouses, Irvine said.

First Gas’ deal with Ecogas stood up commercially, but the network company had been “quite accommodating” because the project was a first, he said.

Energy Minister Megan Woods did not endorse a ban on new gas connections last year, but the question of how to transition people away from natural gas is expected to come up again.

No other gas businesses in New Zealand or Australia were currently mixing biomethane into their gas networks, though First Gas would probably not be the first when it began to do so next year, he said.

Ecogas general manager Alzbeta Bouskova said the project was a great example of a “low-carbon circular economy in action”.

Its facility processes some commercial food waste using a biological process known as anaerobic digestion, but feedstock volumes should be greatly increased by the kerbside collections, based on Auckland Council’s forecasts.

First Gas strategy manager Ben Gerritsen, who chairs industry body GasNZ, believed biogas projects had the potential to generate 20 petajoules of energy each year across the country.

That would not be enough to replace the natural gas used by industrial businesses and electricity generators, which are by far the biggest consumers of gas.

But it could be enough to replace all the natural gas used by households and the lion’s share of the gas used by commercial customers such as cafes and restaurants, he said.

The Government last year chose not to act on a recommendation from the Climate Change Commission that it ban new connections to the gas network from 2025 in order to encourage people to switch to electricity.

Energy Minister Megan Woods said at the time that was because it was still exploring whether the piped-gas network could be used to carry “renewable” gas such as biomethane and green hydrogen.

The restaurant trade and hot-water heating are two energy markets in which customers appear particularly loathe to give up gas.

But Gerritsen expected debate over a ban on new connections would come up again as officials worked on the Government’s new energy strategy, which is due to be released next year.

Don Elers, general manager of electricity and gas network company Powerco, said the gas industry was involved in a race against time.

“It's not up to any independent party other than the gas industry itself to show a viable pathway forward here,” he said.

GasNZ is advocating for the Government to mandate a certain proportion of gas should be supplied from renewable sources by 2030.

“We think that as a minimum that would be 5% of supply, but with more supportive government policies we could achieve a higher proportion of renewable gas,” Gerritsen said.

A mandate could include sanctions for the industry – either on gas retailers or distributors – if they fell short, he said.

“It would be good for it to have teeth.”

Such a mandate would send a signal that the Government was committed to decarbonising gas and would encourage investment in biomethane and green hydrogen, he said.

Greg Wallace, chief executive of Master Plumbers, Gasfitters and Drain Layers, opposed a ban on new gas connections but said gas network suppliers had to invest much more in renewable gas projects.

More than 65% of consumers were choosing gas hot-water systems when they built new homes or renovated “so there is an absolute desire to have gas as a choice for hot water”, but the industry also had to meet the country’s climate change ambitions, he said.

“I'm happy to have a more ambitious target. But I want bipartisan government support to say ‘if we can meet this, we are not going to close you down’.”

Gerritsen suggested a tougher target might be dependent on more government support.

“2030 is not that far away by the time you design and build these projects,” he said.

Correction: An earlier version of this story referred to an estimate of the potential of biogas being 20 gigajoules, rather than 20 petajoules. (Amended 9.38am, April 11, 2023)