A major redesign of the energy system is required to achieve the Paris Agreement target of limiting global temperature increase to well below 2°C (B2DS). To meet the climate change target, it is sometimes argued that Europe should abandon the gas grid, stop the use of gas, and focus on an all-electric energy system. In addition to being a challenge to implement, analysis by Ecofys, a Navigant company, shows that the optimal energy transition combines renewable electricity with renewable gas, using existing gas infrastructure.
Across Italy, the farmers who produce dairy and other food products are increasingly combining this with biogas production from agricultural residues and crops. To avoid importing animal feed instead of producing it themselves, they started to produce two crops a year instead of one in an ecologically sustainable way. The farmers coined the term “Biogasdoneright” for their way of farming. Whilst their biogas is used to produce electricity and heat locally today, from this year onwards increasing quantities of biogas will be upgraded to biomethane to be used as fuel for vehicles and for heat and electricity production across the country.
The Biogasdoneright movement is just the beginning. A recent study by Ecofys, a Navigant company, found that the European Union’s renewable gas (biomethane and renewable hydrogen) production will scale up to a quantity of 122 billion cubic metres (bcm) by 2050. That much renewable gas enables a future role for gas infrastructure, which can be a large money-saver. Using this renewable gas in combination with renewable electricity in the sectors where it adds the most value can lead to €138 billion cost savings annually. This occurs in a fully decarbonised, EU 2050 energy system, as opposed to a future system without a role for renewable gas. How is this possible?
The team’s analysis began with the perspective that all gas consumption in Europe must be net-zero carbon by 2050. This means that gas is produced from renewable sources and that any remaining natural gas consumption will be combined with carbon capture and storage. The study analysed how much renewable gas Europe can produce and what the societal value is of using this gas in the existing gas infrastructure in various sectors of the economy.
It is possible to greatly increase the production and use of renewable gas in the European Union. A conservative estimation of the truly sustainable production potential of biomethane produced from a range of agricultural and woody biomass types within the European Union shows that it is possible to produce at least 98 billion cubic metres, or more than 1,000 TWh of energy annually by 2050. By focusing on EU production, the security of Europe’s energy supply will improve and the rural economy will be strengthened. In addition, the potential exists to produce 24 bcm of renewable hydrogen by converting low cost wind and solar electricity into hydrogen. Combined, this leads to a combined renewable gas potential of 122 bcm of renewable gas per year. Imports may further increase this potential.
These 122 billion m3 of EU-produced renewable gas are allocated over economic sectors where the highest societal cost savings are anticipated: the heating of buildings and electricity generation. A quantity of gas is also allocated to heavy duty transport. In addition, 45 bcm renewable gas is allocated to industry that should, according to the International Energy Agency’s B2DS scenario, be sufficient to decarbonise that sector by 2050, although the cost savings from using gas in industry are not modelled in the study.
Not taking into account the renewable gas allocated to industry, Ecofys, a Navigant company, modelled the societal cost savings that can be achieved by using just 77 out of the 122 bcm of renewable methane and hydrogen in existing gas infrastructure to heat buildings, produce electricity and fuel heavy transport. Of this, the 5 bcm allocated to transport is cost-neutral compared to biofuels, whilst providing a sustainable and scalable alternative to decarbonise heavy transport. The remaining 72 bcm of renewable gas is used in buildings and electricity generation and contributes to societal cost savings of the already mentioned €138 billion per year by 2050, compared to a decarbonised energy system without any role for renewable gas. These cost savings are equivalent to about €600 per EU household per year. They are achieved by avoiding the costs associated with building and running the necessary generation capacity to meet high peaks in electricity demand, and through substantial savings on insulation costs for buildings to accommodate full-electric heat pumps.
The Ecofys study is commissioned by Gas for Climate, a consortium of seven European gas transport companies including Snam of Italy, plus the Consorzio Italiano Biogas and the European Biogas Association. It demonstrates that the right combination of electricity and gas is more cost-efficient whilst bringing additional societal benefits such as improved security of supply and a stronger rural economy, and is therefore closer to the socio-economic optimum. The energy transition remains an enormous challenge, and it is uncertain which combination of existing and future technologies will provide energy services in 2050. Therefore, no technology should be excluded from playing a long-term role, especially not the existing gas infrastructure that has been paid for and is capable of transporting large volumes of energy efficiently over long distances.
