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Centre for Operational Excellence (COPE)

Faculty of Economics and Business
Centre for Operational Excellence (COPE)ProjectsAdaptive Logistics in Circular Economy ‘ADAPNER’

Adaptive Logistics in Circular Economy ‘ADAPNER’

The Dutch central government aims to obtain 10% of the Dutch energy supply from biogas plants by 2030. Currently, production of biogas in the Netherlands is not cost-effective; usually, biogas is burnt and converted into heat and electricity immediately, which is unprofitable at the current electricity prices. A 10% to 50% gap has to be bridged to create a healthy business model, mainly because of the operational costs of digestion and the transport of biomass (which is required to increase gas yields). Biogas cannot be transported via existing gas pipelines until it is enriched into green gas.

Cost-effective logistic business models for biogas

Cost-effective operation of biogas may be created by transporting it in cylinders on lorries. This may lead to the joint enrichment of biogas into green gas and also the supply of biogas or green gas wherever there is a demand. The Adaptive Logistics in Circular Economy project, in short ‘ADAPNER’, examines how the logistic process in regard of biomass and biogas can be made cheaper using 4C concepts and what additional 'green gas' services could be provided. This would provide a lasting boost to the regional economy and render biogas production cost-effective.

Production and transport of biogas

If there is one product that falls under the definition of ‘local to local’ in circular economy, it is biogas. Biogas is made from biomass. In the Netherlands, manure and plant waste, which are agricultural residue streams, are among the components of biomass. This means that the major part of biogas does not originate from fossil sources.

Farmers produce biogas on a small scale. The digestion process is labour-intensive and requires a continuous flow of biomass additions. These two factors cause biogas to be expensive.

Besides that, transport of biogas is not simple. While gas pipeline transport is cheap, pipelines are not always available. The Netherlands has many pipelines for natural gas available, however, biogas cannot be incorporated into the natural gas grid until it has been enriched into natural gas quality. This is one of the problems we are facing. A certain production volume is required to achieve healthy business operations, in particular, if you want to enrich biogas into green gas. A farm lacks the appropriate scale for operating an enrichment facility.

Consequently, there is usually no other choice but to burn biogas produced in the Netherlands and to convert it into heat and electricity. The heat is used locally on the farm, if needed, and the rest is wasted. The electricity is put on the market. There is also a demand for biogas, though, which would bring about higher revenues if it could be transported cheaply and flexibly. One of the options for this purpose is transporting it, contained in cylinders, on lorries.

A number of associated ecological and logistic problems have been outlined above. Firstly, production of biogas often requires not only manure, but also biomass. This implies supplying quite large amounts of biomass, which is economically and ecologically unrealistic if longer distances are involved. That is why biogas is a typically regional product.

A second problem is the transport of biogas. While transport via a pipeline is the most economical, it is not an option for biogas yet. Cylinder transport is therefore being researched.

ADAPNER for solutions

The ADAPNER project examines how these ecological and logistic problems in their mutual relationship can be solved by a system change. As far as logistics are concerned, we are inspired by the 4C concept (Cross Chain Collaboration Centre) when we cluster transport flows. We try and find technical and organisational opportunities and analyse how sustainable such a system is and how it is growing (adjustment and development).?

In doing this, the University of Groningen (RUG) is working together with its project partners Holthausen B.V. (transporter of gas contained in cylinders), Gasunie (gas pipeline network operator) and Gasterra (trader in natural gas).

Project leader Hans Wortmann said: 'Apart from biomass and biogas, farms have many supply and discharge flows, on a regional level in particular. Milk, cattle, cattle feed and crops spring to mind. Currently, these transports are not clustered. Imagine they are; imagine lorries are loaded both on the way there and back. If farmers, transporters and other chain partners cooperate, they must be able to set up a robust and flexible regional logistic network. In these kinds of scenarios, though, one should take any changes in production processes into consideration, as well as ecological consequences. Fortunately, much of the knowledge that is required is available in this project.'

Using the data supplied by the project partners, which means information from practice, the first thing we'll do is have a look at where a network could be set up, both from a technological and an organisational point of view. Mr Wortmann said: 'What markets could be opened up? Which companies would be able to increase their margins by working together? Canisters spring to mind; those are hardly used nowadays in the Netherlands. Using new technology, though, we can make them much larger, which means that delivery can be limited to only a few times a year. Consequently, transport costs will be considerably lower. Consumers who prefer green energy will find this interesting. We are going to research this idea in our ‘Farmersgas’ concept, in which a local farmer supplies biogas to the local community for the purposes of heating and cooking.’

Using various means, in particular simulation models, the project also researches other new business concepts.

BioHub and BioPower

A second example is 'BioHub'. Imagine that biogas produced by various farmers within a region can be transported to the 'BioHub', for instance, at a waste disposal company, where it is then enriched into a useful product - ‘green gas’. It would make a huge difference for these farmers, because there would be no need for each individual farmer to invest in their own enrichment facility. Each farmer would then have to store their biogas in a large gas cylinder, which would need to be collected every once in a while, when it is full, and replaced by an empty one. These gas cylinders could be owned by logistics providers specialised in transport of gas, Holthausen, for instance.

A third example is 'BioPower'. Mr Wortmann said: 'Should we succeed in reducing the cost of logistics and biogas becomes cost-effective, it may catch on quickly. There is a reason that Friesland Campina is willing to invest in 1,000 new biogas facilities. When this happens, export or transport of biogas across longer distances would be an option too.’

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