Biogas faces economic challenges as wind and solar costs decline

A recent analysis published in ENGINEERING Environment highlights the economic challenges facing biogas compared to other renewable energy sources. While the costs of wind and solar energy have decreased by 70% to 90% over the last decade, bioenergy costs have remained stagnant or increased slightly.

In Germany, the 2024 levelized cost of electricity for biogas was recorded between 20.2 and 32.5 euro cents/kWh, significantly higher than wind (4.3–10.3 euro cents/kWh) and utility-scale solar (4.1–6.9 euro cents/kWh). Unlike wind and solar, biogas production is burdened by recurring feedstock costs, which account for 60% to 80% of total production expenses.

Furthermore, the International Energy Agency (IEA) estimates that out of a global biomethane potential of 730 million tonnes of oil equivalent (Mtoe), only 55 Mtoe can be developed at a cost below 10 USD/MMBtu. The study, led by researchers from the University of Galway and an international team, suggests that the site-specific nature and limited scalability of biogas systems necessitate a reassessment of global deployment strategies.