Business model scaling can be used to activate and grow the biogas-to-grid market in Australia to decarbonise hard-to-abate industries: An application of entrepreneurial management

Abstract

Increasing the availability of low carbon intensity biogas through grid injection would help decarbonise the gas network in Eastern Australia and New South Wales specifically. There is a research gap of the reasons for the absence of biogas-to-grid (BtG) in this market, and there are no published scientific reports of grid connections of biogas in this jurisdiction. The objective of the study was to activate the potential market for biogas-to-grid. The methods used were (i) the principles of entrepreneurial management, including business model scaling, and (ii) a financial modeling analysis to confirm business model profitability. The results describe barriers contributing to uncertainty (and low business confidence) and, therefore, lack of investment in biogas-to-grid. The financial analysis covering three scenarios revealed the policy gaps to be addressed to grow this market. The total cost for delivering biogas-to-grid was in the range of $AUD 5.5–37.3 per GJ (best to the worst case) compared with conventional pipeline gas (CPG) prices of $AUD 4–10 per GJ. This study proposes a platform (a program of works) connecting biogas producers with prospective customers using an existing conventional pipeline gas network, abundant on the East coast of Australia, to address the policy gap. Low adoption of injection of biogas is due to the relatively low cost of the widely available conventional pipeline gas, the relatively high cost for renewable gas for network injection, the energy service industry's focus on electrification of business processes, a lack of support (or incentives) for the BtG sector, and absence of a political will.