Impact of co-digestion and degree of centralization on the yield and viability of biomethane production: A case study in regional Australia

Biomethane produced from biogas which is the product of anaerobic digestion of organic wastes represents a promising option for decarbonizing the energy system, as it does not require adjustments to the natural gas network as would be required for fuels such as hydrogen. This study evaluates the viability of biomethane production from agricultural wastes for injection into gas pipelines in the Griffith regional area of New South Wales, Australia. It delves into the critical consideration of the degree of centralization and co-digestion strategies, taking into account the spatial distribution of feedstocks and associated transport costs. A comparative techno-economic analysis and an assessment of the greenhouse gas (GHG) reduction benefits from the biomethane production process were conducted for two cases: (1) a single centralized plant co-digesting various feedstocks from different locations; and (2) multiple distributed plants digesting a single feedstock located in the vicinity of the plants, together with a centralized upgrading and injection facility. Results indicate that a single centralized plant co-digesting food waste, poultry bedding materials and winery wastes is the most favorable scenario in terms of the levelized cost of energy (LCOE) and net carbon emissions saved. The LCOE for the best case is A$19.7/GJ (US$12.8/GJ), surpassing the average natural gas market price in Australia for the same year. However, with the volatility of natural gas prices in recent years, it is expected that biomethane could play an important role in providing a secure and reliable source of energy. The best case in terms of LCOE also offers the greatest potential for reducing greenhouse gas emissions, achieving a net reduction of −58.9 kt CO2-e/year if the generated biomethane could replace natural gas. The performance of the distributed biogas plants is less favorable due to higher capital and operating costs (LCOE is A$36.5/GJ (US$23.8/GJ)), as well as lower net carbon emissions (a net reduction of −33.9 kt CO2-e/year) and lower biomethane yield due to the single digestion of feedstocks and the intermittent operation of the plants throughout the year. The biomethane price shows the highest sensitivity to the biomass price. Receiving a gate fee of A$40/t for collection of the biomass would reduce the biomethane price to A$11.3/GJ (US$7.4/GJ), which would make it competitive with typical Sydney natural gas prices. The cost gap between natural gas and biomethane is expected to narrow over time as biomethane production technologies progress. Additionally, the supply risk, uncertainties and volatility of natural gas will make the investment in natural gas substitutes more favorable. The findings of this paper suggest that improved utilization of co-digestion using mixed feedstocks will be a critical factor. However, in Australia, like in many other countries, the biogas industry should be supported by the government with incentives like tax exemptions, investment subsidies or carbon credits for avoiding CO2 emissions.