Just as natural gas has competed with coal as the prime fuel for electricity in the last decades, renewables are putting pressure on the blue, clean-burning source of energy. The competition is fierce and will likely get worse. Yet, it is still too early to discount gas. This was the message at the 36th International Gas Congress in Croatia, where I spoke on Joe Biden’s plan to stop drilling on federal lands.
The International Gas Union (IGU), with over 160 members from the U.S. to Qatar, is a non-profit that advocates for natural gas as an integral part of the global energy system. The Vice President and the future (2025) President of IGU Andrea Stegher, a Senior Vice President Commercial & Stakeholder Engagement in the Italian energy giant SNAM, is convinced that the gas industry is facing a historic challenge but also a great opportunity. Gas was long hailed as a “transition” fuel from hydrocarbons to renewables. Given what we know about the state of technology and energy poverty around the world, gas should be around for many decades.
Andrea Stegher, Senior Vice President and future (2025) President of the International Gas Union
However, Stegher believes that the industry has not articulated its message clearly enough: “in the past, the industry wanted to be invisible, like our pipes,” Stegher says. This may not be working as well in the era of fierce energy competition, where coal is fighting for its life while renewables are treated as a world-saving panacea.
“Fuel switching from dirty coal and oil applications to clean gas is a proven solution that works now,” comments Stegher. “We shouldn’t just focus on future unproven or non-commercial technology ‘perfect’ solutions and forget what can have a significant beneficial effect today.”
Projected electricity consumption by region through 2050 (EIA)
U.S. ENERGY INFORMATION ADMINISTRATION
Projected energy consumption by source through 2050
Rich nations and people can afford to invest in new technologies, and the gas industry is working on new ‘green’ pathways like hydrogen, whereas the poor just need basic light, heat, and power for their burgeoning populations.
In a way, renewables are benefitting from the grids that were built before solar and wind expansion and which are serving to provide security and flexibility to the system. “Gas is not in competition with renewables,” comments Stegher. “Gas is the catalyst for and foundation of enhanced renewable capacity.”
“The integrated gas-based grids are essential when renewables are less effective due to bad weather, or the lack of wind or sunshine, as has been the case in the UK for the past month and has happened in California and Texas more dramatically,” Stegher argues. A fair distribution of costs in grid expansion needs to be addressed by policy makers.
“In my native Italy, 10 percent of the population live in energy poverty. Overreliance on distributed generation and casting the electric renewables as the only ‘definitive solution’ is dangerous, as the recent events in California and Texas demonstrated,” Stegher believes.
To remind our readers, California’s outages due to extreme heat and Texas’ grid collapse due to snowstorms and frost were caused by a combination of over-reliance on the distributed generation, insufficiently protected baseload production capacity, and poorly integrated grid in the case of Texas.
To avoid such disasters in the future, energy resilience needs to be boosted on the national, state, and regional level. This means strategic gas storage capacity needs to be expanded, and generation protected from the elements. This means back-up capacity and redundancy for a reliable baseload generation need to be increased, and companies and consumers will need to cover the costs of expansion. Such back-up emergency generation capacity will be plugged into the grid if renewables fail.
Projected Energy and Carbon Intensities in OECD vs non-OECD economies through 2050
U.S. ENERGY INFORMATION ADMINISTRATION
In Italy, Stegher’s home, ENI, ENEL, and Edison have integrated the gas and electricity generation sectors, and are importing gas from four corners of the world: Russia, Algeria, Northern Europe, Libya through the Greenstream pipeline; and recently the Trans-Adriatic Pipeline (TAP), an extension of Trans-Anatolian Pipeline (TANAP), which is bringing piped Azerbaijani gas from the Caspian Sea.
Italy also boasts Liquified Natural Gas (LNG) terminals in Panigaglia, Rovigo, and Livorno that can supply 20.6% percent of its gas needs. Companies are simultaneously increasingly investing in renewables, having expertise to integrate them with the existing power generation.
The disparity in energy security in Europe is regional: Western Europe is amply supplied by both piped gas from Russia and Norway, and has a massive LNG terminal capacity. One of the incomplete aspects of Western European gas supply chains may be the lack of pipelines that would bring gas from numerous Spanish LNG terminals to France and beyond, making imported LNG even more competitive.
For the rest of the story: Forbes
Source: With Assistance from Sean Moroney
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