Biogas plants enable power to be generated in a flexible way so that variable, renewable energy sources can be integrated into the energy system. In Germany, the Renewable Energy Sources Act promotes flexible power generation in biogas plants. Two existing biogas plants in flexible operation were analyzed with respect to economic viability and greenhouse gas (GHG) emissions to assess the feasibility of flexible operation. To do this, a biogas technology simulation model was developed to reproduce the technical design of both biogas plants and to link this design with twelve flexibilization scenarios. The evaluation of the economic viability is based on a discounting method of investment appraisal. For assessing the level of GHG emissions, the life cycle assessment method has been applied. The results show that the profitability of flexibilization is contingent upon premium payments promoting flexibility and direct sales resulting from a higher electrical efficiency of new or additionally installed combined heat and power units. Overall, with respect to profitability, the results of the flexible power generation scenarios are dependent upon the properties of the technical plant, such as its power generation and gas storage capacities. Relative GHG emissions from flexible biogas plants show significantly lower values than for referenced fossil gas–steam power stations. Among the various scenarios, the results reveal that the level of GHG emissions especially depends on the number of operating hours of the additional combined heat and power unit(s). The results of the analyzed biogas plants showed no direct correlation between GHG emissions and the economic benefits. Overall, a flexible power generation of biogas plants may improve the economic viability as well as result in lower GHG emissions in comparison with a conventional base load operation. © 2016 The Authors. International Journal of Energy Research published by John Wiley & Sons Ltd.

With wind power and photovoltaics, volatile renewables have emerged as central pillars of the energy transition. This increases the demand for flexibility options to compensate fluctuations in power generation. Focussing on the role of bioenergy as a renewable flexibility option, this article seeks to address two questions. The first is whether there is an option value of bioenergy as a provider of low-carbon flexibility in a future power system, which might justify continued technology-specific deployment support. The second question is whether existing market and policy incentives are effective in activating flexibility potentials, and what perspectives exist for increasing flexibility incentives. The article follows an interdisciplinary approach. First, technical potentials for flexible bioenergy plants and potential systemic contributions are examined. This is followed by an economic assessment of what flexibility incentives are provided by relevant market and policy framework conditions. Power from biomass can be well suited to provide flexible generation for grid stabilisation and residual load balancing. Biogas plants require an increase of nominal power over rated power, whereas the technical flexibilisation potential of solid biomass plants depends on specific technologies. Particularly, small-scale combined heat and power systems can deliver fast responses. For existing biogas plants, the Renewable Energy Sources Act’s (EEG) flexibility premium and balancing market revenues have incentivised some changes in the production behaviour and investments in plant flexibilisation. However, decreasing spot market price levels and decreasing price variance reduce incentive strength. This also limits flexibilisation incentives for solid biomass plants. For new biogas plants, the EEG’s remuneration rules set effective flexibility incentives, but 2014 reductions in remuneration rates have significantly slowed down the expansion. Given high technical potentials for flexibility provision, there is an option value of keeping bioelectricity in the technology mix until more is known about its future competitiveness with other low-carbon flexibility options. To maintain this option value, there is a case for setting policy incentives in a way that continued technological development remains possible. A stringent climate policy could accelerate structural change in the electricity sector, to allow for market price signals which incentivise low-carbon flexibility provision.