Possible Ways of Extending the Biogas Plants Lifespan after the Feed-In Tariff Expiration

Abstract

Energy production from biogas can play a pivotal role in many European countries, and specifically in Italy, for three main reasons: (i) fossil fuels are scarce, (ii) imports cover large shares of internal demand, and (iii) electricity and heat production from biogas is already a consolidated business. Nonetheless, in Italy, current legislation and incentive policies on electricity generation from biogas are causing a stagnation of the entire sector, which may lead to the shutting down of many in-operation plants in the years 2027–2028 and the consequent loss of 573 MWel over a total of 1400 MWel. This work aims to investigate the potential of revamping biogas power plants in prolonging operation until the end of the plants’ useful life, regardless of the implementation of a new government’s incentive schemes. Based on the time-series analysis of electricity prices in Italy and a case study representative of the vast set of in-operation power plants, our findings show that 700 plants will likely shut down between 2027 and 2028 unless the government adequately rewards electricity produced and fed into the grid via incentive schemes. In detail, our results show that the investment to revamp the plant exhibits a highly negative Net Present Value.