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Gas quality and energy transition

2011-11-24

A conference has disentangled the question of gas quality in relation with the energy transition

Participants votes on questions at the Energy Delta Convention in Groningen on 22 November 2011 Participants votes on questions at the Energy Delta Convention in Groningen on 22 November 2011

"Natural gas is set to grow and will remain important in the energy mix of the future," said Paul van Gelder, the chief executive officer of Gasunie. Natural gas will occupy an increasing share in the world energy portfolio, demonstrated with the data of the World Energy Outlook 2011 Aad van Bohemen, the Head Emergency Policy Division of International Energy Agency. That gas will play an important role in the energy transition was a central idea of the key-note speakers at the conference Gas Quality and Energy Transition, held Groningen on 22-23 November 2011.

Other speakers have addressed the theme of gas quality in relation with the transition towards sustainable energy. Gas quality pertains to the calorific value, the chemical composition and the interchangeability of a gas. Since natural gas in the Netherlands is coming from a main source, the Groningen field, all infrastructures and the household equipments has been designed to perform with this particular gas quality. Yet experts estimate that theme Groningen field will be depleted within fifty years. The Netherlands will have to make the necessary adjustments to enable the use of biogas, synthetic gas and imported natural gas.

Biogas and unconventional gas

The Netherlands has an increasing number of production site for biogas. The gas distribution system operators have to consider, before injecting biomethane in the grid, the heating value and the costs. There are no more than ten options to monitor the gas quality, calculated Albert van der Molen, a manager at Stedin. They range from the option of not-in-my-backyard to a constant monitoring through sensors via the achievement of a given target. These options remain open. None of them has been institutionalized as a standard practice in the Netherlands.

Meanwhile the Netherlands has started to allocate licenses to companies for the exploitation of what is also known as "shale gas", because the gas is trapped in shale rock formations. Experts estimated that reserves of unconventional gas in the Netherlands are greater than those of natural gas.

Exploitation companies will face technical difficulties in recovering this gas from the underground, said Rien Herber, a professor at the University of Groningen. Current extraction techniques allow the extraction between half and full recovery. In addition, the numerous extraction pit can interfere with the protected and urbanized zones in the Netherlands.

In addition to technical difficulties, Mr Herber stressed that the exploitation of unconventional gas requires several key-investments taken continuously during the exploitation cycle. This creates high economic uncertainties, he said. It is easier to average the total investment costs of a classical natural gas exploitation before starting its exploitation.

Legal and economic aspects

The government has to make specific adjustments in the law and regulations to facilitate the introduction of biogas. Transmission system operators are responsible for ensuring the quality of the gas fed into the grid, according to the Dutch Gas Act. The Dutch law should be transparent on the distribution of responsibility in the regional gas grid, advocated Martha Roggenkamp, a professor at the University of Groningen. There is a need for transparency in the responsibilities pertaining to the maintenance of the integrity of the gas grid, she added.

The gas infrastructure will rely with time on less on high-caloric gas and more on low-caloric gas. The Dutch government will be left with the problem of coordinating the technical transition at the national level. Indeed, the classical market mechanisms do not provide sufficient incentives to realize the required investments, said Aad Correljé, an associate professor at Delft University of Technology. One option consists of "converting appliances in areas in chosen order." "It's not just a matter of adjusting the technical standards," he said. "It's a problem of economic coordination affecting supply, transport and end-use conditions."

European perspectives

Gas quality represents an issue for Europe, as well. The exploitation of unconventional gas can solve part of Europe's problems pertaining to security of supply, said Ivan Pearson, a scientific officer of the European Union. Mr Pearson acknowledge that this sort of gas poses certain challenges. Europeans do not accept without reserves the exploitation of shale gas. Besides, the European Commission has to achieve inter-services cooperation between the member states of the Union.

Europe will have to remove several technical obstacle for the interoperability of various gas quality, said Robert van Rede, a representative from the section gas of the European Association for the Streamlining of Energy Exchange. Mr van Rede estimated the European standardization of gas quality can deliver an estimated benefit of €0.2 billion per year to the consumer, but it may cost up to €11 billion to be implemented. The adoption of a standard may clashes with current requirements for the integrity of gas installations and security of supply of the European countries.

The generation of electricity will drive the demand for gas all over Europe, demonstrated Jeroen de Joode, a researcher at ECN. There will be important regional discrepancy between countries, he nuanced. Some countries will continue to rely of fossil fuels, while others will introduce far more thermal, solar and wind energy. Mr de Joode, who has performed several simulations of the future, presented a paradoxal result: Russia will remain the main source of gas imports for Europe, because of the reduction of the gas demand.

Irene Vos, a business analyst at GasTerra, further explored the impact of the development of wind farm in Europe on the production of electricity. Wind mils do have erratic pattern of electricity generation, while consumers of energy follows cyclical daily and seasonal demand. If the wind market increase significantly its share of electricity generation in Europe, she said, that will have the effect of reducing the demand for gas.

By Jean-François Auger