Orlen Południe buys an agricultural biogas plant in Konopnica and plans to switch to biomethane

Orlen Południe, a company of the PKN Orlen group, has bought – as announced on 14 December 2020 – an agricultural biogas plant in Konopnica in the Rawa Mazowiecka municipality, with a capacity of 1.99 MWe. The installation, which has been operating since January 2012, is to be converted into a biomethane plant producing about 7 million m³ of biomethane per year. This is the first transaction in the pilot programme of biogas plant acquisitions, which is to launch a new line of business for the group.

What Orlen bought

The acquisition concerns Bioenergy Project, the owner of the biogas plant. The installation processes mainly pomace from apple pressing and smaller quantities of other feedstocks, for example blackcurrant. It produces electricity and heat for the local market. Orlen also acquired Biozec, a company that sells and distributes heat from the biogas plant. The price was not disclosed.

Plan to switch to biomethane

Orlen Południe intends to convert the installation into a biomethane plant whose output would go to the distribution network. The target volume is about 7 million m³ of biomethane per year, and the expansion is scheduled for 2022. Switching from electricity and heat production to biomethane requires adding a biogas upgrading unit and a gas grid connection, and meeting quality requirements.

This is a path that currently involves regulatory uncertainty. In December 2020 Poland had no dedicated support scheme for biomethane, and the rules on grid injection were only being worked out in talks between the government and the industry after the letter of intent was signed in October.

Context: Orlen in biogas

In July 2020, Orlen Południe signed a letter of intent concerning the construction of up to 20 biogas plants on farms supervised by the National Support Centre for Agriculture (KOWR). The purchase of the Konopnica biogas plant completes this picture: the company is building its own projects and buying operating installations that can be adapted for biomethane production. This approach may shorten the time to first volumes, because the installation is already operating and has permits.

Significance for the market

The entry of a large fuel company into the biogas sector strengthens the market but also changes the balance of power. For owners of small biogas plants it means potential buyers, and for technology producers – demand for upgrading installations. For farmers – the possibility of supplying substrates to larger entities.

What next

The key questions concern the timetable for the conversion, obtaining permits for grid injection, and the compliance of the solutions with future biomethane regulations. These factors determine whether the announcement of December 2020 will be delivered in 2022.

An unusual substrate

Konopnica stands out for its feedstock: the main substrate is apple pomace from fruit processing, a seasonal production waste. Such a substrate has a high sugar content and ferments easily, but it is available unevenly throughout the year, which requires storage or mixing with other feedstocks. The switch to biomethane will increase the importance of supply stability, because upgrading installations work most efficiently with a continuous gas flow.