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European gas industry group points to bigger role for renewable gas

Highlights

Biomethane/hydrogen to aid decarbonization: study

Infrastructure needed for 270 Bcm of 'green gas' by 2050

More than double projection from previous forecasts

London — A grouping of European gas grid operators said Monday there was a bigger role than thought for renewable gases to play in Europe's decarbonization efforts, with infrastructure needed to allow for some 270 Bcm/year of "green" gas usage by 2050.

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Under the umbrella of the Gas for Climate initiative -- formed in 2017 to analyze and create awareness about the role of renewable and low-carbon gas -- the TSOs said existing infrastructure could be used to transport cleaner gas in the future.

A study by consultancy Navigant -- commissioned by Gas for Climate -- published Monday found that the use of some 270 Bcm of biomethane and hydrogen in existing infrastructure across the EU would save Eur217 billion/year by 2050 compared with an energy system using a minimal amount of gas.

Current EU gas demand is some 500 Bcm/year.

A previous study commissioned by Gas for Climate published in February last year by Ecofys, which is now part of Navigant, concluded that "green" gas use could reach some 122 Bcm/year, consisting of 98 Bcm of biomethane plus 24 Bcm of renewable hydrogen.

EXPANDED SCOPE

The newest study was expanded in scope following a consultation with industry and policymakers -- including an explicit analysis of demand in the industrial and transportation sectors -- resulting in the larger usage forecast, the initiative said.

"The new Gas for Climate study shows that gas and its infrastructure will play an indispensable role in the future decarbonized energy system," the CEOs of the nine Gas for Climate members said in a statement.

"We support the transition to a fully renewable energy system in which biomethane and green hydrogen will play a major role in a smart combination with renewable electricity while recognising that blue hydrogen can accelerate decarbonization efforts in the coming decades," they said.

The group consists of TSOs from Spain (Enagas), Belgium (Fluxys), the Netherlands (Gasunie), France (GRTgaz and Terega), Germany (Open Grid Europe) and Italy (Snam) as well as two renewable gas industry associations, the European Biogas Association and Consorzio Italiano Biogas.

The study found that while achieving 100% greenhouse gas reduction requires large quantities of renewable electricity, by far the most cost optimal role to decarbonize is by combining electricity with hydrogen and biomethane.

"Renewable gas adds value in the heating of buildings, for high temperature industrial heat, providing flexibility in electricity production alongside wind and solar and in heavy transport," it said.

DECARBONIZED FUTURE

With the EU set firmly on a road toward a decarbonized future, there has been concern raised about the fate of Europe's gas pipeline infrastructure in the coming decades, with the risk of the network becoming effectively obsolete.

The previous Gas for Climate study found that the use of renewable gas in existing gas infrastructure for the heating of buildings, to produce dispatchable electricity as a complement to wind and solar, and to fuel heavy transport, could save about Eur140 billion annually by 2050 compared with a future energy system without any gas.

The Eur140 billion savings, the initiative said, would mainly result from avoiding electricity peak demand, associated generation capacity and the cost of building and running that capacity.

There are also substantial savings on insulation costs for buildings to accommodate full-electric heat pumps, which require the highest possible levels of insulation.

Renewable gas includes bio-methane in the form of upgraded biogas produced by anaerobic digestion of agricultural biomass and other organic wastes, bio-methane produced from thermal gasification of woody residues, hydrogen produced from renewable electricity and synthetic methane produced from renewable hydrogen.

-- Stuart Elliott, stuart.elliott@spglobal.com

-- Edited by Jonathan Fox, newsdesk@spglobal.com