There has been talk a feed-in tariff for biogas (and wind) will finally be introduced in Finland. Biogas plants convert biological waste into energy and producer power, heat and/or fuel. The earning logic of a typical biogas plant is based on port fees, power & heat production and end-products like composting material. In Finland, the feed-in tariff for biogas plants has been on the environmental agenda since 2007.
According to the (as yet unconfirmed) rumours, the planned target price for the biogas feed-in tariff is 83.5 euros per MWh for power production (which equals the planned feed-in tariff for wind power in Finland) and around 30-40 euros per MWh for heating. In this system, a biogas producer is assured a certain long term (15-20 years) guaranteed price. We do not yet know if there are plans to introduce feed-in tariffs for other biogas-based fuels, for example those used to run motor vehicles.
For combined heat and power plants (which are quite popular in Finland), this amounts to a feed-in tariff of around 110 – 120 euros per MWh. Is this enough to promote biogas investment in Finland? Considering the Finnish national goal for the share of renewable energy is very high, 38 per cent by 2020, and that recent high renewable energy utilization in our country is largely based on by-products from the pulp & paper industry, we need an attractive model. At these levels, the payback time for a typical biogas plant investment in Finland will be 8 – 10 years. Not very aggressive, but the full picture also depends on the length of the guaranteed price period.