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Carving the future of gas

2012-11-29

Researches reveal that there is no consensus on a scenario about the future of gas

Artistic representation showing the diversity of renewable energies in Europe as exposed in the scenario Roadmap 2050 (Illustration: European Climate Foundation) Artistic representation showing the diversity of renewable energies in Europe as exposed in the scenario Roadmap 2050 (Illustration: European Climate Foundation)

Windmills on a shore, biogas facility in a forest and solar panels on the roofs—these are components of the scenario of the future, according to the European Climate Foundation. There are hundreds of energy scenarios like this one, if not more. Oil and gas companies, international energy agencies, ecologist groups, governments and panels of scientists have come up, each, with their cherished predictions. The multiplication of these scenarios muddle up the view of the future, said speakers at the conference Back to the Future of Gas, in Groningen, on 19 and 20 November.

Scientists write most of the energy scenarios that governments and industry are referring to in their policies and decision making. Bert Kiewiet, a consultant at DNV KEMA, and his team are performing a meta-analysis of these scenarios. They want to draw the big picture. They are performing a thorough examination and selection of scenarios against stringent criterions before proceeding to an analysis. Mr Kiewiet admitted though, “The future outlook for the energy market and position of gas is difficult to foresee.”

Robust end states in the future

Mr Kiewiet and his team want to pinpoint the “potential robust energy end states.” To simplify, they look for situations that appear the most certain and stable in the future, within the boundaries of the current knowledge. In their quantitative analysis, they proceed to the integration of the data from the scenarios. They analyze it through statistical analysis and energy mix dynamics. In the qualitative analysis, they study the political, economic, social, technological and environmental aspects.  At the end, they will unveil the role of gas in the energy mix by 2050, on the basis of at least three sets of scenarios.

One set of them, the renewables, sees that the growing energy demand will be met largely by a growing share of renewables in the energy portfolio. Gas will decline in relative importance to the whole, as well as nuclear, coal and oil. Another set of scenarios, business as usual, foresees that the growing energy demand will somewhat drive up coal, gas and oil. A last set of scenarios, end state gas, predict that the increase of energy demand will be met by oil and gas, while renewable could not satisfy the increasing demand. Mr Kiewiet and his team will pursue the analysis further.

Predicting the demand for energy

In addition to scientists, utility companies refer to scenarios to make strategic decisions, explained Mart van der Meijden, a professor at Delft University of Technology and innovation manager at Tenet. The company Tenet, which transports electricity through high-voltage line, writes its scenarios on the future of electricity. The European Commission’s 20-20-20 targets will most likely affect the electricity flows of the high-voltage transmission lines. It will lead, in turn, to increased power-flows and decentralized production of energy.

Tenet’s quality and capacity plans aim, every two years, at predicting the demand for transmission capacity on the high-voltage grid. Its scenarios take into consideration the increase in the use of renewable energy, the importation of electricity, the number of power plants in operation and the use of electricity in the various sectors. Scenarios model what would be the future outcomes. They draw out recommendations for investments and long-term asset management.

Can gas provide part of the flexibility that the electricity grid will require with an increasing share of renewables? Mr van der Meijden raised this question on the future role of gas as a source of energy. No scenario can answer this question with a good degree of certainty. The integration of the electricity and the gas grid remains an important technical and economic challenge. Power-to-gas and gas-to-power technologies may provide part of the technical solution in the future.

“Gas scenarios are uncertain and inconclusive”

Can government policies be based on a scenario such as the Roadmap 2050? The answer is negative for Sergio Ascari, a senior consultant at REF-E and gas advisor at the Florence School of Regulation. Most scenarios aggregate data that do not represent the particularities of regions. Patterns of gas consumptions differ from one region to another. If governments can adopt policies and regulations that correspond to their situation, they cannot, however, rely solely on a unique European scenario.

Mr Ascari said that the gas growth scenario assumes that gas consumption will grow over time, more in some European regions than in others. Most policy makers assume that this scenario will prevails. Their policy aims at avoiding the abuse of market power by companies in the use of a scarce infrastructure. They prefer investments, to avoiding congestion risks, for additional gas infrastructure capacity.

In the fighting gas scenario, energy demand will erode. Europeans will increasingly rely on a broader range of energy sources, mostly renewables. Gas producers will have to fight on the production costs, the wholesale prices and the quality of the energy supply. Mr Ascari said that, in this scenario, governments cannot continue “investing in inefficient routes and projects” for the gas infrastructure. 

The fast decarbonisation scenario sees that the reduction of carbon dioxide emissions will lead to reduced gas consumption, according to Mr Ascari. Governments will no longer be concerned in making policy that keeps the gas infrastructure efficient and competitive. Gas will have become a backup fuel of renewable energies. These considerations lead Mr Ascari to say, “Gas policy cannot be based on an agreed scenario.”

By Jean-François Auger