Large Scale Biomethane Injection into the Grid: Is Current Legal Framework an Enabler or an Obstacle?
36 Pages Posted: 25 Mar 2015
Date Written: November 22, 2013
In this paper we analyse biomethane injection into the grid from the perspective of a degree of fit between the level of technology and the formal institutions (laws and regulations) supporting it. We conclude that there are situations in which biomethane produced cannot be injected into the grid due to capacity constraints and/or monopolization of the available capacity by other biomethane producers. We also illustrate a number of technical solutions for accommodating biomethane in the natural gas grid and analyse how these solutions are reflected in the legal framework. On the basis of this analysis we conclude that the degree of fit between the current legal framework (aimed at uni-lateral flows from upstream production to downstream consumption) and the current biomethane developments (translating into downstream production and sometimes upstream consumption) is not sufficient for the efficient functioning of the energy market (i.e. corresponding to the criteria of balanced cost-benefit distribution, market access and level-playing field). In this paper we propose a number of measures for reactive changes to the legal framework which could help increase the future degree of fit between the two.
Keywords: biomethane, biogas, green gas, legal framework, grid injection, network, regulation
JEL Classification: Q40, Q42, Q48, Q20, Q28, Q50, Q58
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