Orlen Południe is building its first own biogas plant in Głąbowo, with a biomethane plan

Orlen Południe, a company of the Orlen group, announced in February 2021 that it had bought in Głąbowo in the Ryn municipality two plots (1.36 ha and 0.23 ha) together with an unfinished agricultural biogas plant. The company intends to complete the investment as a biomethane plant producing about 7 million m³ of biomethane per year, which will be injected into the gas grid. It is – as stated – the first biogas plant that Orlen Południe will build on its own.

Project parameters

The project looks as follows:

• location – Głąbowo, Ryn municipality;
• initial capacity – no more than 1 MWe, with a plan to expand to about 3 MWe;
• product – biomethane, about 7 million m³ per year, to the gas grid;
• contractor – the company Proeko from Witaszyce;
• deadlines – construction work was planned to start in the first quarter of 2021 and to be completed by the end of 2022.

Earlier, in December 2020, Orlen Południe took over the biogas plant in Konopnica, whose conversion to a biomethane plant it plans for 2022. Głąbowo adds to this portfolio a project built from scratch – although on the basis of an existing, unfinished investment.

What taking over an unfinished investment means

Unfinished biogas plants are a common feature of the market. Many projects stalled because of a lack of financing, changes in law or problems with permits. For an investor with strong capital backing, such a facility can be attractive, because it already has part of the infrastructure and documentation. At the same time, it requires a thorough check of the technical condition, permits and compliance with current requirements.

Significance for the biomethane market

The purchase shows that Orlen is testing several paths of entering the market: taking over operating biogas plants, completing unfinished projects and building new installations on state farms. For the biomethane market in Poland this is important, because without production volumes it is hard to work out standards, tariffs and connection procedures.

Głąbowo was to produce about 7 million m³ of biomethane per year (no volume was given for Konopnica), which is a small amount on the scale of national gas consumption (about 20 billion m³ per year) – hence the need to build a network of many installations of similar scale.

What next

The further fate of the project depends on obtaining a grid connection, compliance with the rules on biomethane quality, and the availability of substrates. For the industry it will also be important how quickly it will be possible to move from declarations to the first volumes in the grid.

Scale in the context of Orlen's strategy

The projects in Konopnica, Głąbowo and further locations make up a plan to build a network of distributed installations. Such a structure allows projects to be standardised and negotiations with technology suppliers to be shared, but requires organising substrate logistics across many areas. In practice, the key will be to build contracts with farms for supplies of slurry, manure and plant residues and to ensure digestate offtake.

Project risks

The most important risks concern the timing of the gas grid connection, the ability to obtain all permits, and the costs of biogas upgrading at the small scale of the installation. With a capacity of 1–3 MWe, the project is one of the smaller ones on a European scale, so its profitability depends largely on the price that can be obtained for biomethane.