market conditions and demand and supply balance in the respective
member states but with an increasing level of European market
integration, at least at the regional level, the relevant market to be
considered in regulatory decision-making should no longer be the
national market but rather the larger EU region, if not the whole of the
EU. This development should have consequences in the way national
regulatory authorities makes decisions regarding the suitable regulatory
approach towards LNG import terminal investments. This requires a
common vision on the regulation of LNG investments in the medium
to long-term, with a sufficient level of harmonization between
neighbouring countries.
Conclusions
From the analysis on the different regulatory regimes implemented
across different types of gas infrastructure and across the EU the
following conclusions may be drawn with respect to the posed
research questions.
Firstly, differences in regulation across different types of gas
infrastructure can be explained by their different generic economic
characteristics. Here I refer to the infrastructure investment costs
and the relative share of these investment costs in total costs of
providing the infrastructure service (i.e. the degree of natural
monopoly), and the need for coordination with other (existing)
infrastructure. The first aspect is most clearly demonstrated in the
case of gas storage where the level of market contestability is
different for small gas storage facilities with relatively high
deliverability and large (seasonal) gas storage facilities with
relatively low deliverability. The second aspect is illustrated by the
difference in the case of pipeline investment within a meshed
pipeline network and the case of a single pipeline investment
within a radial pipeline network.
Development of the MILENA
gasification technology for the
production of Bio-SNG.
Methane produced from biomass is referred to as Bio-
Methane, Green Gas or Bio-Substitute Natural Gas (Bio-
SNG). Bio-SNG has the same properties as fossil natural
gas, so it can directly replace fossil fuel consumption. The
production of Bio-Methane via digestion (biogas) has
been developed and is implemented (mainly) in small-scale
installations. The limited amount of suitable digestible
feed stock (e.g. manure and food residues) demands for
development of new technologies which can convert a wider
range of biomass, like wood residue, into Bio-Methane.
Gasification is such a route that can convert a wide range of
(ligno-cellulosic) biomass into methane.
The Energy research Centre of the Netherlands (ECN) has developed a
new biomass gasification process (MILENA) that can convert biomass
Secondly, differences in regulation across EU countries can be
explained by location-specific factors and by other public goals
than the public goal of an affordable (i.e. cost-efficient) gas system.
Relevant location-specific factors include the level of competition
on the gas wholesale market, and the (real or potential) level of
competition on the relevant (geographical) market for the parti-
cular service provided by the gas infrastructure. The latter aspect
refers to for example the physical opportunities for market entry in
the case of gas storage and LNG terminal investment, which vary
across EU member states. Also security of supply
considerations play a part in explaining differences in regulatory
decision regarding on infrastructure investments, which is for
example shown in the case of LNG import terminals where the
LNG import dependence of a region is included as a criteria in
regulatory decision-making.
The lessons learned from this research also have particular
practical use. Companies with plans to develop for example gas
storage or LNG import terminal projects may use the above lessons
to argue for particular regulatory treatment of their investment. In
the argumentation for a particular regulatory regime it is impor-
tant that companies address the whole range of relevant factors as
identified in this article; both the economic characteristics that are
generic for the type of infrastructure, as well as the location-specfic
factors relevant for the considered investment project. In addition,
the acquired insights may assist companies in their decision where
to locate their investment project. Based on the insights from this
research companies can improve their assessment on the likely
regulatory regime that their project would be subjected to and its
consequential impact on its business case across possible countries.
Any questions or comments are welcome.
Contact: dejoode@ecn.nl
Christiaan van der Meijden
Project leader at ECN
into methane. The overall process from biomass (e.g. wood) to
Bio-SNG is shown in the figure below:
3 H2 + CO CH 4 + H 2O
fuel gasifier tar
removal
further gas
cleaning
CH 4
synthesis
gas
upgrading
Bio-Methane
Figure 1: Simplified process scheme for the production of Bio-Methane
Biomass (fuel) is converted at a typical gasification temperature of
850C into a combustible gas. The gas contains CO, CO2, H2, H2O,
CH4, C2H4, C6H6, tars and several pollutants. After removal of tars and
pollutants the gas is converted into Bio-SNG / Bio-Methane.
The Milena biomass gasification technology is characterized by a
10
medium calorific value producer gas (12 18 MJ/Nm3 dry gas), not ECN and HVC are preparing a 12 MWth demonstration plant based on
diluted with nitrogen. The theoretical efficiency from wood to SNG of the ECN Milena technology. This demonstration plant will be located
a complete plant is up to 70%. This overall efficiency is high because of in Alkmaar. Demolition wood will be used as fuel. In the first stage the
a relatively low gasification temperature (typical 850C), low input of
fluidization gas and a complete fuel conversion in the MILENA reactor.
A drawback is the high amount of tar that is produced in the gasifier.
The producer gas is treated with the ECN-Olga technology to remove
tar. The tar is recycled to the combustion section of the gasifier, where
it acts as a fuel.

Biomass is considered a CO2 neutral fuel, as the amount of CO2

released on burning biomass equals the uptake of CO2 from the
atmosphere during growth of the biomass. Fuels like hydrogen,
methane, FT diesel and methanol produced from biomass have the
potential to become a CO2 negative fuel, because part of the biomass
carbon is separated as CO2 in a concentrated stream during the
production process. If this pure CO2 stream is sequestrated, these fuels
can become even CO2 negative. This might be an attractive option for
reducing the level of greenhouse gasses in the atmosphere. Figure 2

CO2 from CO2 from

combustion of
Methane
+800 kton/y combustion of
Bio-Methane
-550 kton/y 400 kton/y CO2
Figure 3: pilot-scale MILENA gasifier (left) and installation of the OLGA
CO 2 in
atmosphere
CO 2 in
atmosphere
pilot-scale gas cleaning (right) at ECN.
CO2 emissions from
800 800
CO2 to grow transport, etc.
2000 250
biomass

Users Users
Biomass
gas will be fired in a gas engine or boiler. After a successful operational
Bio-Methane
Production plant
800
Bio-Methane
Biomass Biomass
test program the methanation unit will be added to the process for the
500 MW Bio-SNG
0.4 bcm/year
0.4 bcm/year
Natural Gas Grid 0.4 bcm/year Natural Gas Grid
final conversion of the gas into Bio-SNG. The produced gas will be
injected in the gas grid. The foreseen Bio-SNG production is around 5
Natural Gas
Reserve
Natural Gas
Reserve
CO
Sequestration
million m3 per year. This demonstration plant is seen as a development
2

step towards large scale production of Bio-SNG. Further scale-up is

required to make a significant contribution in replacing natural gas by
Figure 2: CO2 balance for Natural gas and Bio-Methane produced from woody biomass
Bio-SNG. Supporting research regarding catalytic upgrading of the
gas and improving the process is being done as part of the EDGaR
program.
shows the CO2 balance for Natural gas and Bio-methane produced by Commercial scale Bio-SNG units are expected to produce between
gasification of woody biomass. As can be seen from the figure the CO2 0.025 and 0.5 bcm/year of Bio-SNG. The estimated amount of biomass
emissions from 0.4 billion cubic meters (bcm) of natural gas (assuming available for energy production vary strongly, but the data shows that
100% CH4) per year are 800 kton/year if conventional Natural Gas of the potential is there to replace a major part of fossil natural gas by
fossil origin is used. These figures exclude emissions from transport / Bio-SNG.
compression of natural gas. If conventional natural gas is replaced by
Bio-Methane produced by gasification of woody biomass, the CO2 More information about the development of the MILENA gasifier
emissions would drop to 250 kton/year. If the pure CO2 stream that for the production of Bio-SNG can be found in the Ph.D. thesis of
becomes available during the production process is not vented into Christiaan van der Meijden:
the atmosphere but sequestrated in an empty gas field, the net CO2 www.ecn.nl/docs/library/report/2010/b10016.pdf
emissions become negative (-550 kton/year).
Any questions or comments are welcome.
ECN produced the first Bio-Methane in 2004. The lab-scale results Contact: vandermeijden@ecn.nl
were promising and led to the realization of an 800 kWth pilot plant
in 2008. An extensive test program was done in the lab-scale and
pilot-scale MILENA installations. Different fuels, such as clean wood,
demolition wood, sewage sludge and lignite were tested. A duration test
using demolition test was done in 2010 in the 800 kWth MILENA pilot
plant in cooperation with HVC. Figure 3 shows the MILENA pilot
plant gasifier and the installation of the OLGA gas cleaning pilot plant.
HVC, energy and waste company, is a modern public service waste
company. HVC converts waste streams which cannot be recycled
into usable forms of energy. HVC has a large waste wood boiler in
operation. HVC has decided to join ECN with the development,
demonstration and implementation of the MILENA Bio-SNG
technology.

11