Lion Hirth: We need to tackle and reform the subsidies for biogas plants

In a piece by ZDF looking at the role of biogas plants in the energy transition, Professor of Energy Policy Lion Hirth notes that the current subsidy structures incentivise these plants to run constantly, even when energy needs could be met by renewables. This, Hirth says, makes little sense. 

Germany’s current goal is to produce 80 percent of its electricity through solar and wind turbines by 2030, but a backup option must be secured in case of dark periods, where no sun or wind is present. The federal government plans to invest €16 billion over 20 years into hydrogen-capable gas power plants that will initially run on natural gas and, later, green hydrogen. With this new strategy, funding is set to be significantly reduced for biogas plants in the country, posing an uncertain future for plant operators.

Hirth notes that the majority of the biogas plants in Germany run all year round, even in periods of high sunshine and wind, which can be unnecessary. He argues that this is due to the way subsidies for operators are designed, where operators receive a fixed payment for every kilowatt hour of electricity generated. While this encourages farmers to keep their plants running constantly and helps them stay afloat, it can be inefficient when taking into account the broader energy system. Hirth states that this policy needs to be reformed.   

Watch the video and read the article via ZDF (in German). 

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