* Holding Verte targets diverse biomass types
* Debut 1-megawatt biogas unit to use wine residue, whey
* Says law on supermarket recycling to boost biomass supply
* Sees biogas as small but sustainable energy niche
By Gus Trompiz and Muriel Boselli
PARIS, Dec 14 (Reuters) - As French gourmets savour the famed Sancerre wine and Chavignol cheese of the Cher region, they may soon enjoy heat from the by-products of such delicacies thanks to new government incentives designed to promote biogas.
France this year increased feed-in tariffs paid for power generated using biogas, and it has passed a decree letting producers inject biogas into the grid, boosting prospects for the fledgeling sector in a country better known for nuclear electricity.
Pioneering biogas company Holding Verte has picked the specialities of the Cher administrative department in central France, overlooking the Loire, as a source of methane.
It will collect waste from farmers across a 30-km radius, including the marc or remains from pressing wine grapes, as well as manure, cabbages and whey from the prized goats' cheese.
The firm will not pay farmers for the organic waste but will offer digestate, a by-product of biogas fermentation that can be used as a fertiliser.
"It's a swap of waste against fertiliser," said Frederic Flipo, one of two founders of Holding Verte, adding that one tonne of waste produced just under one tonne of digestate.
Holding Verte plans to have an electricity and heating production capacity of 7 megawatts (MW) by 2013 and to launch a first 1-megawatt unit next year using various types of organic waste to feed the fermentation process that yields methane gas.
At a time when the credentials of some renewable energy sources, notably biofuels, have been attacked for harming the environment, operators like Holding Verte view biogas as creating virtuous cycles of waste and energy on a local scale.
"We are providing solutions locally," Flipo told Reuters.
"We will produce electricity and heat which will be used by local authorities through heating networks or by farmers to dry their crops," Flipo said in a telephone interview.
SUPERMARKET WASTE
France has set an official target of 625 MW in electricity capacity from biogas by 2020.
That would be four times the 2010 level, but still be less than the 900-MW capacity of an average-size nuclear reactor and only a sliver of the 23 percent share of renewables France plans to have in its energy mix by 2020.
Its biogas sector is largely made up of small-scale units on farms and the increase in feed-in tariffs earlier this year was part of a push by President Nicolas Sarkozy to win back support from rural voters, a core constituency for his conservative party.
Holding Verte, which is investing about 5 million euros (${esc.dollar}6.68 million) in its first unit in partnership with the state-owned bank Caisse des Depots, is positioning itself to use larger units of about 1 MW capacity that it says can sustainably draw in waste resources from a 30-km radius.
"In overall terms, the entire sector will always be smaller than a single nuclear reactor," Flipo said. "The question is not really how much electricity we will be able to produce, it's more what volume of waste can be recycled in a virtuous way."
The company expects to benefit from legislation, taking effect from January, that will use tax incentives to persuade larger supermarkets to recycle unsold food products, such as yoghurts, as biomass.
Despite its large farm and food industries, France is coming relatively late to biogas and there has been a trend of organic waste being bought and exported to neighbouring countries, notably Germany, which has a much larger biogas sector.
Holding Verte joined with farmers producing biogas in criticising the trend as unsustainable.
Germany boasts thousands of biogas units, most of which were developed using maize fodder as their main raw material, in contrast to the multi-waste model being pushed by Holding Verte.
The French firm expects to recoup its investment costs over eight to nine years and is also aiming to reduce by 15 to 20 percent over the next three years its current investment cost of 5 million euros per biogas project, Flipo said. (${esc.dollar}1 = 0.7482 euros) (Editing by Marie Maitre and Anthony Barker)
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