Blog: What can further enable biomethane growth? – Insights from the UK & Europe

As the gas system transitions towards a more low-carbon, decarbonised future, biomethane has emerged as a proven alternative to natural gas. To unlock its full potential, there are still a few practical considerations to address – including the current need for propane supplementation (propanation), which is influenced by existing gas quality and billing frameworks.

The UK’s reliance on propane supplementation to ensure biomethane fits within a narrow tolerance of gas quality - particularly calorific value (CV) - reflects the history of gas in the UK. The UK was one of the first places to build a national gas system - as a result, some of our gas infrastructure is amongst the oldest in Europe. It was built to be optimised for North Sea gas which has a high CV. As a result, it was designed to transport quite a specific calorific range of natural gas.

The UK uses a Flow Weighted Average Calorific Value (FWACV) system. To ensure customers are charged fairly for the actual energy content of the gas they receive, the CV of gas entering the Local Distribution Zone (LDZ) must not deviate significantly from the average CV for that zone. The current tolerance for LDZs is primarily governed by billing fairness, rather than technical safety.

Under current rules, the billing CV for an LDZ is capped at 1MJ/m3 above the lowest CV source entering the zone. Biomethane typically has a much lower CV than fossil fuel gas, between 34-36 MJ/m3, whilst fossil fuel gas ranges from 37.5-43 MJ/m3. The UK gas grid legal range is 37-44 MJ/m3. Therefore, to comply with current Gas Safety Management Regulations (GSMR) and ensure customers are billed fairly, propane is often added to biomethane at injection points to raise its CV to the required threshold.

In reality, it is not the end user’s appliances that drive this constraint. Most modern appliances can technically handle a wider range of CVs than the current GSMR allow. Instead, the constraint stems from the centralised billing system and legacy gas‑quality standards designed around fossil gas, not today’s more diverse gas mix.

As the gas mix becomes more diverse by integrating gases like biomethane and liquified natural gas (LNG) into the system, CV differences across the network create challenges for accurate energy measurement, settlement and billing as a lower biomethane CV affects the FWACV process. In the long term, addressing these billing‑system constraints may require more granular charging zones, updated gas‑quality regulations, and investment in network adaptations to accommodate different CV gases.

Drawbacks of propanation

There are some downsides from the continued reliance upon propanation, including:

1. Emissions – While biomethane delivers significant emissions reductions, the introduction of propane – being a fossil fuel – dilutes these benefits.
2. Security and supply chain – Propane supply chains are external to the gas network and can be exposed to price volatility and supply disruption. This negates one of the main benefits of biomethane integration, as a homegrown, energy secure gas, not dependant on international commodity markets or supply chains.
3. Scalability – As biomethane volumes increase, there may be limits put on its use under current net zero targets.
4. Costs – Research from the Green Gas Taskforce reveals reduced reliance on propane provides the largest operational cost savings for biomethane producers, of around 5%, or £4 per MWh.

While proponation currently enables biomethane to be used anywhere on the network, it introduces additional complexity, cost and operational dependency. Propane supplementation requires dedicated infrastructure, ongoing fuel supply and careful operational control. These factors all increase costs and can act as a barrier to smaller biomethane developments.

Lessons from other countries

In neighbouring countries, such as France and Germany, their regulatory and billing frameworks are better suited to encourage greater biomethane adoption. In both countries there are greater connection incentives for grid operators and in France gas suppliers are obligated to purchase biomethane and the Government compensates them for the difference compared to natural gas. Moreover, Germany’s gas grid has long-established standards that allow for a wider range of gas qualities, reducing the constant need for the precise "propane enrichment" seen in the UK's LDZ-centric mode.

As mentioned, the UK has an older gas system than most European countries and lags behind them when it comes to progress on exploring innovative alternative approaches to gas quality management, such as wider CV bands, regional gas quality zones and more technical system-level solutions that reduce the need for propanation. Learning from the best of these innovations, the UK has an opportunity to make rapid progress through coordinated whole-system interventions:

1. Gas quality specifications – updating CV limits and definitions would increase flexibility of gas quality management across the network. This would allow greater flexibility where appropriate while ensuring safety.
2. Billing and settlement – The industry’s Future Billing Methodology programme explored how market arrangements can adapt to a more varied, decarbonised gas network. These learnings have been taken forward in the Real Time Settlement Methodology Project, led by SGN, which is an ongoing programme, designed at modernising Great Britain's gas billing and settlement framework as the network transitions from natural gas to a mix of low-carbon gases like hydrogen and biomethane.
3. Whole system thinking – A more joined up approach across the gas network, including improved network balancing, smarter injection strategies and closer coordination between producers, networks and central data services. This will reduce the need for point-of-entry solutions like propane supplementation.
4. Collaboration – There must be clear Government and Regulator policy direction to support industry development of technical solutions. An initial Government recognition of the importance of this challenge would be an important first step towards resolving it, cognisant of the significant prize of greater gas decarbonisation and energy security through the adoption of more biomethane.
5. GSMR reform – The Heath and Safety Executive (HSE) has implemented the Gas Safety (Management) (Amendment) Regulations 2023, which amend the 1996 regulations so that a wider range of gas specification may be injected into a gas network (including biomethane). There are ongoing post implementation reviews around this, and further amendments could be required in future.
6. Operational changes – Highly technical changes are required, including proportional odorization, real time monitoring throughout the LDZ and ensuring Gas Distribution Networks update their safety case with the HSE, to prove that lean gas won’t cause flame out in legacy industrial burners.

Conclusion

Biomethane is an excellent alternative to fossil fuel gas, it is proven, homegrown and low carbon. Britain’s gas network however needs modernising both in technical and billing terms. It was built to handle fossil fuel gas from the North Sea with a high CV, but now needs adapting to handle low carbon gases such as biomethane.

By updating how the CV is specified, monitored and accounted for, we can reduce reliance on propanation and help biomethane projects deliver more value to the system and consumers. There are practical solutions available but achieving them will require coordinated action across Government and industry to ensure standards, processes and market arrangements keep pace with a changing gas mix.

Get in touch

Learn more about biomethane and the role it can play in decarbonising the gas grid on our dedicated biomethane pillar page.

If you have any feedback or questions on any of the above, please email us at decarbonisation@xoserve.com.

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