In less than six months, they will start injecting biomethane into Ukraine’s gas distribution networks on an industrial scale. This step will allow making our domestic energy sector greener and less dependent on natural gas. According to Regional Gas Company, there is a significant interest in the production of biomethane in Ukraine even despite the war, with several upcoming projects in the pipeline. DSO operators working under the RGC brand are ready to connect biomethane plants to the gas distribution networks for 1 hryvnia and to offer them the latest technological solutions.

In less than six months, they will start injecting biomethane into Ukraine’s gas distribution networks on an industrial scale. This step will allow making our domestic energy sector greener and less dependent on natural gas. According to Regional Gas Company, there is a significant interest in the production of biomethane in Ukraine even despite the war, with several upcoming projects in the pipeline. DSO operators working under the RGC brand are ready to connect biomethane plants to the gas distribution networks for 1 hryvnia and to offer them the latest technological solutions.

Ihor Gotsyk, Head of Decarbonization, RGC, told about the factors that make it profitable to engage in biomethane production in Ukraine, the requirements that the company puts forward to biomethane plants, and whether the consumers will notice that their kitchens or boiler rooms are not burning the regular gas.


More profitable than the "green" tariff

RGC already has in place the first contract with the biomethane producer. How much biomethane do you plan to inject into the gas distribution networks and when will the entire operations be up and running?

We implement our first project in cooperation with Gals Agro LLC in Chernihiv region. It has a capacity of about 3 million cubic meters of biomethane per year. It is equal to the annual consumption of approximately 1,500 private households.

At the moment, DSO is working to issue the technical specifications. The next stages include the design and construction of the networks, and eventually gas-in.

Over a long period of time, Gals Agro LLC has been producing biogas and was using it to generate green electricity. The company has a proven technology and a stable supply of inputs (pulp and silage) that would make it easier to convert to the production of biomethane, which is actually already taking place. Equipment for biogas purification to biomethane is already on its way to Ukraine.

Biomethane production technology is simple and at the same time complicated; you collect the inputs, load them into methane tanks (special reservoirs) and add bacteria at a certain temperature. However, this is theory put on paper. In real life, the production of biomethane is a sophisticated technological process because even the slightest deviation of the temperature by more than 0.5 ℃ will destroy the process, kill all the bacteria and you will have to start the whole process again.

Projects of this kind will benefit Ukraine's energy independence as they reduce the demand for natural gas. They are also the potential source of foreign currency inflow into the country, because you can sell biomethane abroad. At the same time, you do not have to transport it to Europe through the pipeline. The manufacturer will receive a certificate of origin for the biomethane it will produce. In Europe, the trader will be able to sell biomethane, having documentary proof that it is produced in Ukraine. This would allow Ukraine to become a player in the European gas market. At the moment, the regulatory framework is being finalized and the biomethane origin guarantee mechanism and the register of producers will be operational in the near future.

Manufacturers are interested in building biomethane plants with a capacity exceeding 2 million cubic meters per year. In economic terms, it is more profitable to build larger plants: it will allow to shorten the payback period and reduce the cost of building 1 MW of capacity. According to the estimates of Bioenergy Association of Ukraine, the construction costs for the plant producing 10 million cubic meters of biomethane per year range from EUR12,000,000 to EUR15,000,000.

Is there interest in Ukraine in the production of biomethane taking into account the ongoing war? How many biogas plants can convert to biomethane production?

Yes, the interest is there and it is quite considerable. Since the beginning of the war, given the hostilities, we put our biomethane projects on hold. It came to us as a surprise when, after a while, owners of both new facilities and those with which we have been working before started to approach us. Although, in general, market players are in different situations in terms of financing and investments, development plans, and security.

Any biogas plant can produce biomethane. Actually, biomethane is the degree of biogas purification. At the moment, there are up to 100 biogas producers in Ukraine. They use this resource to generate electricity and heat. Production of biomethane for them is a logical and optimal completion of the biogas production cycle.

When you use biogas to generate electricity, you lose 30-40% of energy due to the efficiency coefficient of the cogeneration plant. Whereas biomethane allows you to harness almost all energy value of biogas. Depending on the technology, the losses during biogas purification do not exceed 10%, sometimes even less.

The electricity generated by biogas plants is sold at a green tariff. During the war, the Guaranteed Buyer pays the tariff only in part; moreover, the green tariff shall be valid until 2029. Consequently, the owners of the biogas plants are thinking of adding biomethane to their portfolio or building facilities that would produce biomethane only.

I think that the plants generating electricity from biogas will continue to run, though to a lesser extent, and they will balance profitability at the expense of biomethane production; whereas the new facilities will be intended purely for the production of biomethane.

If a biomethane producer is located in the region of geographical presence of DSOs operating under the RGC brand, and the nearest areas have a gas supply, then such biomethane producer can produce biomethane and inject it into the gas distribution network.


Experience and advanced technologies

Imagine a producer who wants to connect to the gas distribution network. Where shall it go and what shall it do?

A producer or a potential investor can email at and get advice on how to connect a plant that already operates or the construction of which is at the planning stage.

We work with investors who tentatively consider 3-5 settlements as potential biomethane consumers. We give them a full picture of where the consumption will be so that they could plan the capacity of the plant accordingly.

We develop connection projects on a case-by-case basis because each of them is unique in terms of the networks, consumption and technical solutions.

Then, we sign the contract for design and construction and support the clients until the gas-in stage.

This service is provided according to the one-stop-shop approach, i.e. the client receives high-quality services through a single point of contact. The client does not need to look for someone else who would build networks or issue technical documentation.

What advice would you give to potential investors: shall they locate production facilities closer to the consumer or to the raw material base?

It is in the potential investors’ interests to find the right balance and locate a place that is close both to the large consumption and the raw materials base. A distance of 20 km is insignificant in terms of the raw materials logistics whereas it is quite important in terms of the construction of the networks.

If you consider different platforms, then it would be most appropriate to immediately consult with the DSO operator or RGC who would offer you a number of connection options.

Otherwise, you could build a facility that would not live up to your expectations in terms of consumption. In that case, you would have to lay new networks or make interconnections which are wildly expensive.

What extras does RGC offer in addition to network connection for 1 hryvnia? Access to technologies, additional opportunities?

RGC owns technical expertise that allows it to offer the world's best solutions in terms of connection and operation of biomethane plants.

We have direct relationships with the best equipment manufacturers who have been working in the biomethane market for more than 15 years. They include Pietro Fiorentini, Emerson, Mesura, etc. In total, we have 156 direct contracts in our portfolio.

It allows us to make use of the developments that took European countries about 10-15 years to deliver. The development of the biomethane market in line with the advanced standards will be a serious competitive advantage for Ukraine.

Ultimately, it will be the DSO that will be responsible for the gas supply safety and stability. Consequently, we focus on the best global manufacturers who have already proven the quality and reliability of their equipment.

We also use the produce of Ukrainian origin, i.e. RGC Production. This equipment will also be used when connecting biomethane plants to gas distribution networks.

How long does it take to implement a turnkey solution, i.e. from signing the contract to injecting biomethane into the networks?

At the moment, we implement our first pilot projects, so we are not yet in a position to state that, tentatively, a project with a capacity of 100 cubic meters of biomethane per hour will take 1-3 months to implement, and the one with the capacity of 500 cubic meters per hour will take more time.

It does not take much time to build a network. It is the supply of equipment and technologies for biomethane plants themselves that are the biggest constraints. In peacetime, deliveries took 6 - 9 months, now it might take longer. Having said that, the equipment is already on its way to Ukraine for the projects that have the contracts in place.

In general, the procedure looks like this: following initial consultation and evaluation of the possibility to connect, we can produce an estimate with a detailed breakdown; usually, it takes about 1-2 months. Then, we begin to design the connection and build and complete the necessary equipment. We are committed to working as quickly as possible and without any delays.

Do DSOs charge a tariff for receiving biomethane into their networks?

There is no stand-alone tariff for the injection of biomethane. The only thing that the biomethane producers shall finance is the construction of external and internal gas networks. DSOs provide access to capacity, offer technical conditions, and will continue to receive biomethane. RGC as a production and technology company will service the facilities. We will also provide post-sales maintenance.

Tariff for injection is an issue at debate, though. It is a common practice that DSO operators do not charge biomethane producers as these are the consumers who pay for the capacity as a part of the distribution tariff. There may be some incentives for DSO operators to service new connections, though. Practices differ and solutions can be found.

About the requirements for equipment and quality of biomethane

What equipment and licenses do you need to produce biomethane?

The biogas producer needs to install gas treating equipment to purify the biogas to the quality level when it becomes biomethane (this is the so-called biogas upgrade) and put it into operation. This is, essentially, a system of filters that separates biogas from CO2 and other elements, or reduce their concentration, so that biomethane quality meets the regulatory requirements.

- At the end of the purification system, you install:

- a chromatograph to control the quality;

- devices for remote data transmission;

- a gas metering unit to measure the volumes of biomethane;

- a shut-off valve so that the DSO operator could disconnect the producer in case of quality inconsistencies or emergencies.

To get connected to the networks, a biomethane producer must finance the construction of the gas networks. This configuration of equipment and systems is similar to that in Europe. It makes the entire design and construction process easier and faster because foreign equipment manufacturers do not have to adapt their solutions for Ukraine.

Usually, no individual biomethane production permit is required, i.e. it is a part of the biogas production process.

Ukraine is about to adopt the standard for connection. We believe it is correct to adopt the state standard for the production of biomethane plants. It is crucial from the point of view of approximation of Ukraine and EU laws and regulations; secondly, in the future, all the biomethane plants that are to be built will have a clear legal framework and regulatory guidelines.

From the point of view of the consumers, is biomethane different from natural gas? Will residential or industrial consumers be able to tell the difference, for example, in terms of the heat of combustion?

Biomethane is no different from natural gas. They are similar in terms of chemical formula and quality. The only difference is that biomethane is not extracted from the deposit, but produced from agricultural, processing, or food industry wastes.

There may be some variations in terms of the heat of combustion, color, or smell. Once the biomethane is mixed with natural gas in the networks, consumers will not be able to tell the difference.

What specifications shall biomethane comply with so that it could be injected into the DSOs networks? Did the legislators decide on the oxygen content?

The oxygen content in biogas shall not exceed 1%. This is the concentration that gas distribution networks are designed for. At the moment, the regulator is about to adopt similar requirements. This is more than enough to make the biomethane market operate.

In general, biomethane quality requirements are set forth in the technical specifications for connecting to gas distribution networks published on the websites of the DSOs operating under the RGC brand. Publicly available information sets the transparent connection requirements for manufacturers and investors and allows them to design biomethane plants and equipment in accordance with the legal requirements.

Will DSO operators control biomethane quality?

Yes, indeed. DSO operators will monitor biomethane physical and chemical properties online using a chromatograph and remote data transmission devices. If the biomethane is of substandard quality, its supply will be cut automatically.

Biomethane samples will also be periodically collected for independent control in a special laboratory.

What volumes of biomethane are DSOs ready to accept?

Services of providing connection to gas distribution networks are available in all regions of the geographical presence of DSOs operating under RGC brand. The volumes of biomethane that DSOs are ready to receive are limited solely by the technical capacity of the networks.

If the network is capable to receive, for example, 1,000 cubic meters of biomethane per hour and there is a sufficient number of consumers nearby, then there is no limit. Biomethane will replace natural gas.

One should bear in mind that the consumption of natural gas in the summer and winter differs by 8-10 times. This may force the DSO to set limits on the volume of biomethane to be injected into the network. This is a bottleneck because biomethane plants work on a regular schedule and they have no capability to turn down the consumption in the summer, i.e. they either work or they don't work. Actually, in the summer, the biomethane plants should simply stop and not produce biomethane at all, or do so with significant restrictions.

However, if they have the opportunity to generate electricity, then, it would make it possible to balance production. For example, they could generate more electricity and limit the production of biomethane in the summer, and do the opposite in the winter.

We are trying to evaluate the connection in such a way that the plant could work on a regular schedule and inject biomethane into the networks. In the summer and winter, there may be different operating modes of the plant and different volumes of biomethane production given the production of electricity. We evaluate and estimate these factors at the design stage.

Why should you cap the production of the biomethane plant, instead of taking less gas from the main gas pipeline?

From a technical point of view, the system is designed to maintain a constant gas pressure and volume coming from the main networks. Part of the gas can be replaced, though it is both complicated and risky to convert to biomethane completely.

You should balance the natural gas and biomethane in the pipeline. During the evaluation, we allow for some free capacity margin, so that to ensure the gas supply to consumers in case of an emergency.

Will every producer be able to connect to gas distribution networks or can the connection be denied for some reason?

There are no restrictions for connection. We seek to provide the ultimate transparent, easy-to-understand and non-discriminatory access to the gas distribution networks because this is right for the development of the market as a whole.

Even if the networks in some areas could not accept the entire volume of biomethane to be produced by the plant, we would find a solution. For example, we will make interconnections and do a redesign to meet the consumers’ demand.

We advise the owners of biomethane plants to look at the potential increases in their capacity. Usually, the companies start small, though plan to increase the production capacity. It is important for us to understand this, so as not to double the work.

If we lay a gas pipeline, which, for example, receives 100 cubic meters of biomethane per hour, whereas the plant eventually "grows" to 500 or 1,000 cubic meters, then you need completely different network diameters, pressure, other metrological equipment, chromatographs, regulators, etc.