Biogas in South Africa: Investing in a Sustainable Energy Future

South Africa, a country renowned for its rich landscape and biodiversity, stands at the cusp of an energy revolution. With a population of over 60 million people and accelerating industrialization, the country’s energy needs have expanded rapidly. Currently, South Africa's energy sector is heavily reliant on conventional sources of energy, especially coal. More than 80% of electricity in the country is generated from coal, making it one of the largest carbon emitters globally (CSIR, 2022). By 2022, South Africa had 54 GW of wholesale/public nominal capacity, of which coal contributed more than 40 GW (CSIR, 2022). The country's fossil fuel consumption has continued to grow, increasing the demand for energy at an alarming rate.

However, the overreliance on coal and oil for power generation comes at a high cost to the environment. South Africa's burgeoning economy has driven a substantial increase in carbon dioxide emissions, making the country one of the world's largest emitters. The time has come for a shift to more sustainable alternatives. In this regard, biogas presents a promising solution that can significantly contribute to the sustainable development of South Africa’s energy sector, particularly in agriculture. This blog will delve into the untapped potential of biogas in South Africa, explore its impact, and reveal how it can help pave the way for a cleaner, greener future for the country.

Biogas is a renewable source of energy that is produced from organic waste through the process of anaerobic digestion. Biogas can be used to generate electricity, heat, and fuel; as well as provide a range of other services, such as waste management, water treatment, and fertilizer production. Biogas is a renewable and sustainable source of energy that can help to address the challenges of climate change, energy security, and job creation in South Africa. The Southern African Biogas Industry Association (SABIA),is a non-profit organization that represents the biogas industry in South Africa with a mandate to promote the development of a sustainable biogas industry in the region through advocacy, education, and collaboration with stakeholders. The Southern African Biogas Industry Association (SABIA) launched its market position paper and the paper demonstrates the potential of the South African biogas sector to create 30,000 jobs, reduce the national greenhouse emissions by 2% and attract 50 billion Rands of investments. According to a report by the International Energy Agency (IEA), biogas has the potential to contribute up to 4% of the country's total energy demand by 2030.

Figure 1: The Process of Anaerobic Digestion (NetSol Water Solutions, 2022)

The South African biogas sector is in its early stages with low uptake due to limited experience in designing, constructing, and operating biogas projects, as well as high capital expenditure costs. Increased uptake of biogas and waste-to-energy (WtE) technologies and the development of local expertise would assist the industry in maturing to a commercially sustainable level (GreenCape, 2022). The drivers that support the maturation of the South African biogas industry include economic, environmental, social, and legislative factors. The legislative factors include the Renewable Energy Independent Power Producer Procurement Program (REIPPPP) and the National Environmental Management: Waste Act (NEM: WA) regulations, which have created a supportive policy and regulatory environment for biogas development in the country (GreenCape, 2022).

However, there are numerous complexities (including high CAPEX costs, the need for multiple revenue streams, and feedstock security) and several market barriers (including the cost of digestate management and low landfill gate fees) for biogas and WtE projects in South Africa. The liquid waste to landfill ban and the general trend of a more circular economy with a focus on waste management and beneficiation, as well as decarbonisation, especially in the agriculture sector, are some of the drivers of the South African biogas industry (GreenCape, 2022). The biggest driver for biogas in South Africa is not the energy crisis itself, but rather the benefit of managing waste, creating alternative revenue streams such as fertilizer or the general value addition to products, and the need to decarbonise by many companies, especially in the agriculture sector. In addition, biogas provides the diversification of revenue from carbon credits. Therefore, the main takeaway is that biogas presents a waste management/beneficiation opportunity with added energy in agriculture rather than solely an energy opportunity (GreenCape, 2022).

Potential for Biogas in South Africa

According to a report by the South African Biogas Industry Association (SABIA), there is a potential for up to 4,000 megawatts of biogas energy in South Africa, which is equivalent to the output of two nuclear power plants.

The agricultural sector produces large amounts of organic waste, such as animal manure and crop residues, which can be used to produce biogas through anaerobic digestion. This presents a unique opportunity for the agricultural sector to not only manage waste but also generate alternative sources of revenue. One of the by-products of biogas production is organic fertilizers, which are in high demand in the agricultural sector due to their ability to improve soil health and increase crop yield. Therefore, the agriculture sector is at the centre of biogas projects in South Africa, with the livestock industry being the biggest opportunity for biogas production due to the large quantities of animal waste that it generates. According to a study by the United Nations Industrial Development Organization (UNIDO), the potential of biogas in the agricultural sector in South Africa is estimated to be 2,500 megawatts of electricity (Kemausour, Adaramula & Marken, 2018). The study also found that there is potential for the development of around 8,000 biogas plants in the livestock industry alone, which could generate significant amounts of electricity and organic fertilizer, while also helping to manage waste and reduce greenhouse gas emissions (UNIDO, 2018).

The agricultural sector is not the only source of organic waste that can be used to produce biogas. The waste sector in South Africa also produces significant amounts of organic waste, such as food waste and sewage sludge, that can be used for this purpose. The Council for Scientific and Industrial Research (CSIR) estimates that the potential of biogas in the waste sector in South Africa is about 1,500 megawatts of electricity. The use of biogas in the waste sector would not only provide a source of renewable energy but also help to reduce the amount of waste sent to landfills, which is a major environmental issue in South Africa. The development of biogas projects in both the agricultural and waste sectors has the potential to contribute significantly to South Africa's energy mix while also addressing environmental challenges.

Table 1: SABIA Market Position of Biogas (World Biogas Association, 2021; GreenCape, 2022)

 

Opportunities for Biogas in South Africa

There are various opportunities for biogas in South Africa, including:

1. Agricultural Sector: Biogas can provide energy for farms, reduce greenhouse gas emissions from animal waste, and produce crop fertilizer. Using biogas in the agricultural sector can also provide rural communities with access to clean and affordable energy. Biogas projects in the agricultural sector have shown promising results in terms of increased productivity and cost savings. For example, Cape Dairy Farm and Uilenkraal in the Western Cape generate electricity from cow manure and other organic waste. This results in significant savings on electricity costs, reduced waste disposal fees, and improved soil fertility through the use of biogas effluent as fertilizer.
2. Waste Sector: Biogas can be used to provide energy for waste treatment facilities, reduce the amount of waste sent to landfills, and produce fertilizer from sewage sludge. The use of biogas in the waste sector can also contribute to the circular economy by turning waste into a resource. According to a study by the Council for Scientific and Industrial Research (CSIR), biogas could potentially provide up to 1,500 MW of electricity in the waste sector in South Africa.
3. Energy Sector: Biogas can be used to provide renewable energy to the national grid and reduce reliance on fossil fuels. The use of biogas in the energy sector can also contribute to the diversification of the energy mix in South Africa. For instance, a biogas plant in Athlone Cape Town, the first of its kind in the city, generates up to 4 MW of electricity from organic waste with a goal of achieving zero waste to landfill, ensuring that all usable waste brought into the plant is developed into environmentally sensitive, high-quality products.
4. Job Creation: Biogas presents a significant opportunity for job creation in South Africa, particularly in the agricultural and waste sectors. According to a report by the International Renewable Energy Agency (IRENA), the biogas sector can create up to 1.5 million jobs globally by 2030. In South Africa, a biogas project in Bronkhorstspruit, which uses waste from a chicken abattoir to produce biogas, has created several jobs and helped to reduce the abattoir's waste disposal costs.
5. Off-Grid Operations: Biogas also presents an opportunity for farmers to operate off-grid while running their farming operations and perhaps even sell the excess back to the grid. In South Africa, the Uilenkraal dairy farm in the Western Cape operates off-grid through a biogas plant that converts cow manure into energy for the farm's operations. The biogas plant has significantly reduced the farm's reliance on grid electricity, resulting in cost savings.

National Biogas Market Overview

At present, the biogas market in South Africa is relatively new, with around 30 biogas projects established and operational in the commercial and industrial sectors throughout the country. These projects are situated across various regions, with the Western Cape having the highest concentration of projects, followed by Gauteng, Free State, and KwaZulu-Natal.

Out of 28 feedstock sample projects, 5 are related to energy crops, which are typically grown for the specific purpose of producing biogas. Livestock-related projects make up the largest category, with 8 projects utilizing animal waste as the primary feedstock. Another 4 projects are based on abattoir waste, while 4 more are related to water and/or wastewater. The remaining 7 projects use food and general waste as feedstock (GreenCape, 2022).

The breakdown of feedstock types indicates the diversity of resources available for biogas production in South Africa. This diversity is an advantage, as it reduces dependence on any one specific feedstock type and supports sustainable waste management practices. Moreover, the most valuable operations for biogas production in South Africa typically involve a combination of agricultural and industrial waste, such as crop residues, animal manure, and food processing waste. These feedstocks can provide a reliable source of biogas and help to reduce greenhouse gas emissions from waste. However, the tonnage of available feedstocks can vary greatly depending on the location and the type of operation.

Overall, while the number of biogas projects currently operational in South Africa is relatively low, the diverse feedstock options and growing interest in renewable energy suggest that the country's biogas market has significant potential for expansion in the coming years.

Feasibility of Biogas in South Africa

Despite the potential for biogas in South Africa, there are several barriers to entry for interested investors. These include the high initial capital costs of building biogas plants (compared to other renewable energy sources, such as wind and solar), the lack of government incentives and subsidies, and the limited availability of suitable feedstocks in certain regions. Additionally, the complex regulatory environment can make it challenging to navigate the necessary permits and approvals required for biogas projects.

The feasibility of biogas in South Africa depends on various factors, including the availability of organic waste, the cost of biogas production, and the policy and regulatory environment. The feasibility of biogas in South Africa is further supported by the country's National Development Plan (NDP), which aims to promote the use of renewable energy sources. The NDP highlights the need to increase the use of biogas in the country and create incentives for its adoption. while there are challenges to the feasibility of biogas in South Africa, the potential benefits in terms of renewable energy, waste reduction, and job creation make it an opportunity worth exploring for interested investors. As the technology and regulatory environment continue to develop, the biogas market in South Africa has the potential for significant growth in the coming years.