Norway: Gas is Crucial for EU Climate Goals
Gas will be crucial for Europe in achieving its climate change targets, according to a report for Norway’s upstream producer group published August 18.
"Without Norwegian natural gas, Europe will not be able to achieve the climate targets set in Paris," the Norwegian Oil and Gas Association’s climate director Hildegunn T Blindheim wrote in a foreword to the report, written by Norwegian consultancy Thema.
The report available in Norwegian only finds that European countries have made significant investments in gas infrastructure, and that the EU Commission expects that gas and gas-fired power plants will play an important part in Europe’s energy sector in the foreseeable future.
Gas will continue to provide valuable benefits to balancing power markets, as more intermittent renewable power generation capacities are installed and coal-fired units phased out, the report finds. It expects gas's competitive position versus coal to strengthen as stricter climate policies are reflected in higher carbon prices.
Front cover of the new report 'The Rols of Gas in Europe' by Thema for the Norwegian Oil and Gas Association (Photo credit: Norsk Olje og Gass / Thema)
“Gas acts as an ideal partner for renewable energy, in shifting the power sector onto a low-emission basis,” said Blindheim. He said that were Norwegian gas exports to Europe to be substituted by more coal, then emissions would spiral upwards.
“Norway supplies over 20% of [Europe’s] gas,” noted the country’s EU and EEA minister Elisabeth Aspaker. “But it is still more profitable to use coal than gas in most countries in Europe. We must therefore maintain a close policy dialogue with the EU on the significance of achieving common energy and climate goals. This is high on the agenda of my meetings with European counterparts.”
Recent market trends seem to bear out the report's expectation that gas will gain ground. Gas used in UK power generation in 1Q 2016 increased by 44%, while in Germany, even without the UK's carbon floor price, operators have been bringing plant back on line to take advantage of the low gas price.
Mark Smedley