The biomethane reference price is here: PLN 538/MWh from biogas and PLN 545/MWh from agricultural biogas

The Minister of Climate and Environment set, by a regulation of 13 November 2023, the reference price of biomethane (Journal of Laws (Dz.U.) 2023, item 2477): PLN 538 per MWh for biomethane from biogas and PLN 545 per MWh for biomethane from agricultural biogas. The regulation enters into force on 22 November 2023 and puts into practical operation the support system introduced by the amendment to the Act on Renewable Energy Sources. For producers this means that the profitability of a biomethane project can be calculated with a concrete price.

What is changing

Under the Act on Renewable Energy Sources, a producer of biomethane injected into the gas grid, in an installation of up to 1 MW (counted as equivalent electrical capacity), may sell the gas to a designated entity and benefit from the right to coverage of the negative balance. The fixed purchase price of biomethane is equal to the reference price in force on the day of application (Article 83n), and in subsequent years it is indexed by the average annual consumer price index. The minister of climate sets the reference price in a regulation separately for biogas and agricultural biogas (Article 83o).

The procedure provides for submitting to the President of the Energy Regulatory Office (URE) a declaration of intent to sell biomethane at the fixed purchase price (via an online auction platform, but without an auction), a reservation fee of PLN 12 for each kilowatt of capacity or a bank guarantee, the issuing of a certificate within 45 days, and the start of production within 48 months. Support lasts 20 years from the first sale, no later than 30 June 2048.

Significance for the industry in Poland

The price of PLN 545/MWh for biomethane from agricultural biogas means a higher level than for biomethane from biogas from other sources, which favours agricultural projects. Relative to wholesale natural gas prices in 2022–2023 it is a moderate value, but the system gives something very valuable: revenue stability for two decades. For owners of existing agricultural biogas plants of up to 1 MW it is a real alternative to continued operation in cogeneration.

For larger installations, in turn, support is not available, so they must rely on the market or other mechanisms. Designers should also take into account the costs of upgrading, grid connection and certification.

What to pay attention to

Before an application is submitted, connection conditions to the gas grid must be obtained and it must be assessed whether the biomethane parameters meet the operator's requirements. The 48-month period for starting production is sufficient, but only with an efficient construction and connection process.

Comparison with other pathways

For installations of up to 1 MW, the alternative is to continue operating in cogeneration with auction support or to sell biomethane on the free market. The choice depends on the cost of upgrading, the distance to the gas grid and the gas price. The reference price provides a point of reference, but the decision requires an individual calculation.

What next

URE will prepare document templates and launch a platform for applications. The Council of Ministers may set the maximum capacity covered by the system in a given year. The first applications will show whether the price level is sufficient to launch investments.