Biogas production is characterised by economies of scale in capital and operational costs of the plant and diseconomies of scale from transport of input materials. We analyse biogas in a Danish setting where most biogas is based on manure, we use a case study with actual distances, and find that the benefits of scale in capital and operational costs dominate the diseconomies of increasing transport distances to collect manure. To boost the yield it is common to use co-substrates in the biogas production. We investigate how costs and income changes, when sugar beet is added in this case study, and demonstrate that transport cost can be critical in relation to co-substrates. Further we compare the new Danish support for upgraded biogas with the traditional support for biogas being used in Combined Heat and Power production in relation to scale economies. We argue that economies of scale is facilitated by the

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The Danish government has set a target of being fossil fuel independent by 2050 implying that a high degree of inflexible renewable energy will be included in the energy system; biogas can add flexibility and potentially has a negative CO 2 -emission. In this paper, we investigate the socioeconomic system costs of reaching a Danish biogas target of 3.8 PJ in the energy system, and how CO 2 -costs affect the system costs and biogas usage.We perform our analysis using the energy systems model, Balmorel, and expand the model with a common target for raw biogas and upgraded biogas (biomethane). Raw biogas can be used directly in heat and power production, while biomethane has the same properties as natural gas.Balmorel is altered such that natural gas and biomethane can be used in the same technologies.Several CO 2 -cost estimates are investigated; hereunder a high estimate for the expected CO 2 -externality costs. We find that system costs increase with CO 2 -costs in most cases, while the biogas target becomes socio-economically cheaper. In the case of a very high CO 2 -cost, system costs decrease and biomethane becomes the primary fuel. Furthermore, biomethane functions as regulating power and the Danish fuel consumption increases due to a higher electricity export.

 Users may download and print one copy of any publication from the public portal for the purpose of private study or research.  You may not further distribute the material or use it for any profit-making activity or commercial gain  You may freely distribute the URL identifying the publication in the public portal If you believe that this document breaches copyright please contact us providing details, and we will remove access to the work immediately and investigate your claim.