Based on the system analysis, economic calculations were done for four different integrated systems for SNG production. These four systems took into account the necessity of upscaling from the first  demo facility with a capacity of 100 MWth (in 2010) to ultimately a 1 GWth bioSNG plant (in 2020) as well as learning curves. The capital costs for these four cases were calculated based on literature, and in-house sources. In capital cost of the commercial 1 GWth bioSNG plant will amount to approximately 400 M€, whereas the capital cost of the 100 MWth facility will be 85 M€ [1].

The SNG production costs are determined on the basis of a method used by ECN Policy Studies for calculations of MEP tariffs . For the biomass cost a figure of 1-4 €/GJ at the biomass source is assumed. In the long run, with biomass cultivation and trading being fully commercialised the costs in general are expected to decrease (~1.2 to 2.8 €/GJ) [2]. This results in the cost trens presented in the figure below.
The costs of natural gas up till 2005 are based on actual EU data, whereas for future costs the natural gas price is related to the oil price. The different curves are based on different oil scenarios [3], varying from ones that expect oil becoming depleted (and prices going skyhigh) to ones that expect oil being available for a long time still to come at hardly increasing costs. Due to the large differences in scenarios the spread in future gas prices is rather large (lightgrey area), however by taking into account only the more realistic scenarios this spread in prices can be reduced (darkgrey area).

The figure clearly demonstrates that large scale production of Synthetic Natural Gas (SNG) from biomass in the long run might compete with fossil fuel based natural gas, however initially will need some financial incentives from the government, e.g. tax exemptions or binding targets for the share of biofuels in our energy consumption.

References:

1. R.W.R. Zwart, H. Boerrigter, E.P. Deurwaarder, C.M. van der Meijden and S.V.B. van Paasen: Production of Synthetic Natural Gas (SNG) from biomass - Development and operation of an integrated bio-SNG system. ECN, ECN-E--06-018. 2006, The Netherlands. 

2. M.M. Hoogwijk: On the global and regional potential of renewable energy sources. Ph.D. thesis, University of Utrecht, 2004 , 256 pp.

3. T. Rehrl, R. Friedrich: Modelling long-term oil price and extraction with a Hubbert approach: The LOPEX model. Energy Policy, 34, 2006, pp. 2413–2428