Renewable Gas
Could gas be a destination fuel for Europe?
This year Europe is facing a real winter. Many European households keep themselves warm with the use of the natural gas. Gas consumption in power generation is also growing, as more than a fifth of energy consumption in the EU comes from the use of gas.
On the positive side, while acknowledging that methane can leak if not properly handled from well to wheel, natural gas is the fossil fuel that emits the least greenhouse gases — about half the CO2 produced by burning coal if properly produced, transported and used. Gas is well placed to supply back-up to intermittent renewable electricity because of the flexibility and short start-up times, and is sometimes referred to as a “renewables best friend”.
Nevertheless, on the negative side, natural gas is a fossil fuel that emits substantial amounts of greenhouse gases (GHG) — with the risk that venting, flaring and leaking can more than offset gas advantages. According to Climate Action Tracker, full lifecycle emissions, including the fuel chain and also the manufacturing of the energy conversion technology, implies emissions in the range of 410–650 g CO2eq/kWh for combined cycle plants as the most effective combustion plants.
Voices are calling for an urgent phase-out of all fossil fuels, including natural gas. At the same time, there are other considerations.
One of which is that the time we have to keep climate change below 2 degrees is well below the time it takes to retrofit the enormous world energy system entirely. Many customers, for instance, have had a long and successful experience of using gas for their energy needs. Gas is well suited for the seasonality of heat demand. EU has an extensive gas grid that is still being strengthened and enlarged. There is a substantial gas storage infrastructure. EU has invested a substantial effort in creating EU wide gas market. It would be a shame to lose all of it in the hope that we can convince each customer to embrace new habits while we transform every single element of the costly infrastructures. The question should, therefore, be asked of whether there is a way to speed up the transition and reduce its cost by using gas in the close-to-carbon-neutral energy system.
The EU, which accounts for about 10% of global GHG emissions, is firmly committed to fighting climate change under an ambitious reading and implementation of the Paris Agreement. The target is to cut EU’s emission by 80–95% by 2050, which in turn requires that EU’s electricity, transport and heating and cooling sectors be carbon free by that time. Achieving such objectives while reusing part of the existing infrastructures and changing much, but not all, of the existing energy system, suggests that the strategy has to mobilise all existing assets in the most efficient way possible. Renewable gas — biomethane and hydrogen notably — can be transported in existing gas pipes, even if with some adaptations. This at a fraction of the cost that it would take to carry the same amount of energy in the form of electrons (the ratio can be as much as 1/10 in favour of gas). The EU has some experience in producing and using biomethane and hydrogen.
- Could this experience be scaled up to be of the comparable levels of the use of natural gas today?
- What regulatory measures could be considered in support of it?
The transition is a race in time; there is only a limited number of trillion euros available. Being practical is one of the conditions for being successful.
What is renewable gas?
by Maria Olczak and Andris Piebalgs
On the positive side, while acknowledging that methane can leak if not properly handled from well to wheel, natural gas is the fossil fuel that emits the least greenhouse gases — about half the CO2 produced by burning coal if properly produced, transported and used. Gas is well placed to supply back-up to intermittent renewable electricity because of the flexibility and short start-up times, and is sometimes referred to as a “renewables best friend”.
Nevertheless, on the negative side, natural gas is a fossil fuel that emits substantial amounts of greenhouse gases (GHG) — with the risk that venting, flaring and leaking can more than offset gas advantages. According to Climate Action Tracker, full lifecycle emissions, including the fuel chain and also the manufacturing of the energy conversion technology, implies emissions in the range of 410–650 g CO2eq/kWh for combined cycle plants as the most effective combustion plants.
Voices are calling for an urgent phase-out of all fossil fuels, including natural gas. At the same time, there are other considerations.
One of which is that the time we have to keep climate change below 2 degrees is well below the time it takes to retrofit the enormous world energy system entirely. Many customers, for instance, have had a long and successful experience of using gas for their energy needs. Gas is well suited for the seasonality of heat demand. EU has an extensive gas grid that is still being strengthened and enlarged. There is a substantial gas storage infrastructure. EU has invested a substantial effort in creating EU wide gas market. It would be a shame to lose all of it in the hope that we can convince each customer to embrace new habits while we transform every single element of the costly infrastructures. The question should, therefore, be asked of whether there is a way to speed up the transition and reduce its cost by using gas in the close-to-carbon-neutral energy system.
The EU, which accounts for about 10% of global GHG emissions, is firmly committed to fighting climate change under an ambitious reading and implementation of the Paris Agreement. The target is to cut EU’s emission by 80–95% by 2050, which in turn requires that EU’s electricity, transport and heating and cooling sectors be carbon free by that time. Achieving such objectives while reusing part of the existing infrastructures and changing much, but not all, of the existing energy system, suggests that the strategy has to mobilise all existing assets in the most efficient way possible. Renewable gas — biomethane and hydrogen notably — can be transported in existing gas pipes, even if with some adaptations. This at a fraction of the cost that it would take to carry the same amount of energy in the form of electrons (the ratio can be as much as 1/10 in favour of gas). The EU has some experience in producing and using biomethane and hydrogen.
- Could this experience be scaled up to be of the comparable levels of the use of natural gas today?
- What regulatory measures could be considered in support of it?
The transition is a race in time; there is only a limited number of trillion euros available. Being practical is one of the conditions for being successful.
The European experience with Renewable Gas
by Maria Olczak and Andris Piebalgs
In the 2012 assessment of the biogas development potential in Europe, Floris van Foreest concluded:
“Although at present unlikely, the high market penetration scenario should be re-evaluated in five years’ time when there is more clarity on whether the promise of biomethane is substantiated by a dramatic growth in digesters and upgrading plants and forecasts on gasification are further backed by more field experience”.
As we just rang in 2018, it is the right moment to look back and examine how the renewable gas market changed over the course of the last five years, and what it could potentially mean for the ongoing discussion on the future role of gas. Due to its limited size, this article focuses on the main trends in biogas and biomethane production that can be observed based on the available data.
First, in terms of volumes, the EU biogas primary energy production grew over the course of the last few years and reached 16.1 Mtoe in 2016, compared to 10.1 Mtoe in 2011 (59% increase). However, the pace of growth shows a declining trend since 2011 (22.4%, 17%, 14.3%, 7.3%, 4.2% and 3%). This can be explained by the introduction of regulatory changes in key biogas producing countries — mainly Germany, Italy and the UK, which set the limits on the use of energy crops in biogas production and established less favorable biogas electricity payment conditions. For example, the EEG 2012 law change in Germany introduced a cap on the use of corn as a feedstock at 60%. However, Germany, the UK and Italy were, and continue to be, the biggest biogas producers in the European Union.
Secondly, almost three quarters of biogas in the EU (74.1%) is currently produced via anaerobic fermentation (methanisation of non-hazardous waste or raw plant matter). It is an increase of 17.4% since 2011. The other sources are landfill biogas and wastewater treatment plants. In fact, the latter solution is more popular in countries such as the UK, France, Spain, Portugal, Finland, Greece, Ireland and Estonia, where agricultural and industrial methanisation is more novel. The production of synthetic biogas (via thermal processes) remains insignificant.
Thirdly, electricity and heat production (including via cogeneration) are by far the most common form of biogas recovery. In fact, the biogas electricity production almost doubled between 2011 and 2016 (35.9 TWh in 2011 compared to 62.5 TWh in 2016). This is mainly the result of the specific construction of the majority of support systems that offer premiums for electricity produced from biogas.
Finally, the increase of biomethane injection is another significant market trend. According to Biomethane Observatory, there have been some 480 biomethane production plants spread across 9 European countries in 2016. The biggest growth has been observed in 2015, when it reached 20%. What is common among the observed countries is that all of them adopted at least one of the four support mechanisms targeting the biomethane injection: feed-in tariffs, grid injection priority, grants for installations construction and guarantees of origin or renewable gas quotas.
Based on the recently launched European Biomethane Map[10], most of biomethane plants have been located in Germany, the UK, Sweden, Switzerland and France. Only in 2016, in total 30 additional biomethane units have been constructed in Germany, Sweden, and France.
To conclude, despite steady growth in recent years, renewable gas accounts only for 4% of the EU gas market. The evidence shows that the ‘promise of biomethane’ has not been substantiated yet. One thing is sure, if the current status quo is to change significantly, the support for renewable gas should not be left solely at the discretion of the Member States.
Bottlenecks for delivering renewable gas
Looking at the future of renewable gases or ‘green gas’ in Europe, it is fair to say that there is still a long way to go before it becomes a significant part of the energy mix. Volumes of biogas and biomethane have been very modest. In 2015, EU member countries — most notably North-Western countries — produced biogas equivalent to less than 20 bcm of natural gas, thereby covering a mere 4 % of total EU demand for gas. Only in Germany — which accounts for half total EU production — can this be considered a significant resource at this stage. For reasons of cost and technical constraints, only a small part of the gas thereby produced was injected into the natural gas grid, most of it being used to produce heat or power locally. To understand how ambitious objectives could be in the years to come, one must consider a variety of bottlenecks in production, transport, storage and application of renewable gas.
To start with what already works, sufficient knowledge and techniques are presently available to produce biogas from landfills and sewage mostly using anaerobic digestion technology. From produced biogas, CO2 needs to be removed and other purification must be carried out to get biomethane that meets the necessary standards to be injected into the natural gas grid. Such upgrading is of course costlier if applied to the relatively small volumes available from a given farm or landfill. There is also a need for more research and political discussions on the feedstock used. The gasification of woody biomass could generate higher volumes and help scale up installations but, so far, such technology is still used only in pilot plans.
A second way to produce renewable gas is from renewable electricity. High hopes are expressed that the surplus of intermittent solar and/or wind energy that is available and that translates into negative prices in the wholesale power market could be stored in the form of hydrogen by running at least part of such surplus through electrolysers. Doing so on a large scale is being considered in connection with large North Sea offshore-wind projects. A side benefit of such power-to-gas conversion would be to reduce the need for (often unpopular) high-voltage. Breakthroughs are still needed, however, in power to gas technologies as electrolysers able to work intermittently are presently costlier to build and operate. The significant capital cost also needs to be spread over enough hours and days of operation to make the per gas-unit cost acceptable.
Renewable gas could be transported by trucks, dedicated pipelines and by the EU-wide natural gas grid. It would be especially convenient to use existing grid for transporting renewable gas. Hydrogen can be injected into the natural gas grid, but it influences the combustion behaviour and materials integrity, which sets limits. Also, a higher flow rate is required to meet demand, because hydrogen’s volumetric energy density is substantially lower than natural gas’. As for biomethane, its injection is less constrained that that of hydrogen, provided that gas quality checks have been carried out. Today each EU country has established its own limitations, and regulations related for injection of hydrogen can differ significantly even between neighbouring countries. Challenges also exist when one envisions the future storage of large volumes of renewable gas, notably hydrogen. Methanisation can then appears as an attractive alternatively, as green hydrogen can also be turned into methane when combined with CO2. This allows to do away with technical constraints regarding transport and use. The question then arises as to which sources of CO2 would be acceptable and/or preferable to produce biomethane.
Biomethane could substitute natural gas in almost every sector and application. In industry renewable gas could serve both as an energy source and a feedstock and it could continue to be used for residential sector heating. By contrast, one should note that, today, hydrogen is used mostly in industry. A hydrogen-driven economy will therefore require a more profound transformation. In mobility the potential use of renewable gas is substantial with the exception of air transport. While some countries have developed very significant fleets of gas-powered vehicles, in many others, use of renewable gas in transport is hampered by lack of refueling infrastructure. The breakthrough could come with the decreasing costs for hydrogen fuel cell vehicles.
There are also important cross-cutting issues: willingness of consumers to pay more, prices for guarantees of origin, are Europeans ready to consider that gas greening could happen also through projects from other GHG mitigation actions like afforestation. Certificates(whether Guarantee of Origin (GoOs) certificates for green gases or CO2 certificates used as offsets) could play a role in facilitating acceptance and lowering costs. Altogether, it is correct to say that measures to promote renewable gas are relevant to all elements of the gas value chain.
This essay was originally published as a series of fully referenced blog posts on the FSR website which can be read here.
