The European Commission has authorised under EU state aid rules a support of SEK222 million (approximately € 24 million) that the Swedish Energy Agency intends to grant to the Gothenburg Biofuels Gasification (GoBiGas) research and development (R&D) project. Göteborg Energi AB, a Swedish energy company, will manage the project, which will be carried out by its subsidiary, GoBiGas AB.
Gothenburg Biomass Gasification Project, GoBiGas, is the name of Göteborg Energi's large investments in biogas production by gasification of biofuels and waste from forestry. The project is run in partnership with E.ON.
The objective of the project is to develop a pre-commercial demonstration plant for the gasification of forest residue. The Commission has concluded that the project is compatible with the EU Framework for State aid for research, development and innovation. In particular, the aid aims at tackling a market failure and generates positive effects for the EU, notably increased research activities, environmental protection and security of energy supply.
On 23 June 2010, Sweden notified the GoBiGas project, based on an existing support scheme approved by the Commission in 2008.The project will be carried out during a period of ten years and its costs are estimated at a total of SEK978 million (€105 million). The public aid amounts to SEK222 million (€24 million) and will be provided to GoBiGas AB, in which Göteborg Energi AB is the principal shareholder.
Gasification of forest biomass
The R&D activities to be undertaken within the project concern the development of a pre-commercial demonstration plant for indirect thermal gasification of low-quality forest raw material (branches, roots and tops) into biomethane (Bio-SNG). The biomass is converted to a flammable gas in the gasification plant. This so-called synthesis gas is purified and then upgraded in a methanation plant to biogas with a quality comparable to natural gas to enable the two types of gases to be mixed in the gas network, until the natural gas is phased out. Since biogas is produced from renewable sources this does not contribute to increasing emissions of carbon dioxide as fossil fuels do.
The Commission assessed the project under the EU framework for R&D&I, that allows aid that is well designed, palliates a market failure and results in benefits that outweigh potential distortions of competition brought about by the aid. It found that the research project could not attract sufficient financing from the financial market.
Moreover, the project will generate important external effects in the EU in terms of knowledge spill-overs, environmental protection and security of energy supply. It is expected to bring valuable information regarding the up-scaling and viability of the new technologies involved for the production of second generation biofuels. Further, it can produce useful input for the European standardisation work on e.g. gas quality.
In addition, the distortion of competition stemming from the public support is limited, in particular due to the high level of dissemination of the research results. Finally, the limited market shares of the beneficiary and its mother company, the presence of strong European competitors and the expected growth of the market ensure that sufficient competitive pressure will remain on the methane market.
The Commission therefore concluded that the benefits of the project clearly outweigh potential distortions of competition brought about by the aid.
100 MWgas capacity by 2016
The announcement of funding will now permit the gasification plant to be built in two stages, the first stage (about 20 MWgas) to be built during 2010-2012 and to be operational in late 2012. The second stage (about 80 MWgas) is scheduled to be built in the years 2013-2015 and put into service 2016.
Stage 1 will be built in the Rya harbour, on the same site as the existing Rya hot water plant, just off the Älvsborgs bridge. The plan for the location of Stage 2 is on a nearby plot of land with jetty access. The location has been chosen so that the plant will be close to a hub for Gothenburg in electricity, gas and district heating, and also allowing a long-term and flexible fuel reception because it has the potential for both ship and rail transport. Cooling water to the process can be taken from adjacent Göta River.
The goal of the project is to convert 65 percent of the biomass into biogas, and that the overall energy efficiency will be over 90 percent. Göteborg Energi expects to deliver in 2020 biogas equivalent of 1 TWh, representing about 30 percent of current deliveries in Gothenburg or fuel to 75 000 cars.
