A recent study by Innovation Center Denmark in Silicon Valley reveals major potential for Danish biogas companies in California.
The Californian biogas sector is at a tipping point triggered by strong political support and one of the largest input potential available in the United States.
“This will accelerate the development of biogas facilities and with it open the opportunity of major export potential for the world leading Danish biogas sector” says Ali Mushtaq, from the Clean Energy Advisory at Innovation Center Denmark.
Potential to power three million American homes
California is considered the state with the largest potential for biogas development. As one of the world’s top ten economies, California has a large volume of municipal and agricultural waste from a 37 million population, major industrial sectors, and an enormous dairy- and agro sector.
According to CalRecycle, the governing body for recycling and waste management in California, more than 20 million tons of organic waste is annually diverted to landfills – equivalent to the weight of 70,000 of the world’s biggest airliner Airbus 380 - with a potential of being used for biogas production.
The total biogas potential for California is 7,000 megawatts of power, which is enough to supply approximately three million American homes with power, according to Bioenergy Association of California and UC Davis.
The tipping point to growth
California is leading the fight against climate change and has ambitious goals within environmental protection. This has caused policy makers to acknowledge the great potential in biogas production and its multiple applications along with positive environmental impact. A number of regulatory initiatives have been introduced to provide the industry with improved overall framework conditions and funding opportunities to significantly accelerate the development of new biogas facilities.
“Many more governmental agencies are getting aware of the opportunities within biogas and new policies have therefore been introduced. This is a clear indicator of the industry being at a tipping point”, says Julia Levin from Bioenergy Association of California
Among the most important bills that have been passed is a new feed-in tariff requiring utilities to purchase 250 MW of bioenergy at preferential prices, a requirement to divert 75% of organic waste from landfills, and a cap-and-trade program providing producers with another source of revenue. These are all expected to be game changers by industry experts.
Huge opportunity for Danish export
In the wake of the recent political support to extend the regulatory system in support of biogas, it is expected that new biogas projects will become significantly more attractive in terms of financial bankability, causing the local feedstock suppliers, developers, investors, etc. to look for companies to collaborate with. Currently, the industry is underdeveloped and has e.g. only 14 running plants in agriculture, indicating that Danish companies will have great opportunities with the state-of-the-art solutions and technology they possess.
“We see a huge potential for Danish companies to enter the Californian market. The local players are looking for many of the strongholds we have in the Danish industry. E.g. technology, know-how, R&D, capital, etc.”, says Jesper Arndt Andersen, External Advisor for the Ministry of Foreign Affairs
“The political support to lower methane emissions is causing new regulations. These are major drivers for the biogas industry, and we expect a rapid development going forward”, continues Jacques Franco from University of California Davis
To support the market entry of Danish biogas investors, the Clean Energy & Technology Advisory at Innovation Center Denmark has established a team of highly experienced advisors with technical biogas expertise and knowledge of local conditions. The team offers full spectrum services from providing market insights to on-the-ground business execution and public liaising as well as assisting with the establishment of subsidiaries in California.
For further info, contact Ali Mushtaq on the information below.
Ali Mushtaq, Cleantech Advisor
Innovation Center Denmark
Director, Clean Energy & Technology Advisory
T: +1 312 852 2224