How to Combine Gas, Renewables... and Coal?
How can we get rid of coal? What role will gas play in the energy mix? How can we best combine gas with renewable energies? These core questions illustrate the concerns gas players had about the future of gas as a transition fuel before the Paris climate summit (COP21). Those questions remain unanswered despite the final agreement reached at the summit in December.
At the summit, Gas Naturally hosted a lively discussion addressing these issues. The panel featured Ian Duncan, a conservative member of the Environment committee of the European Parliament for the United Kingdom, Giles Dickson, CEO of the European Wind Energy Association (EWEA), and Olivier Schäfer, President of SolarPower Europe.
Get rid of coal
Before arguing about how gas can support the development of renewable energies, the different energy players have to face a hard truth, the panellists said.
"Europe has a problem that is not addressed right now and it's called coal," François-Régis Mouton, Chairman of Gas Naturally, said in his opening statement, “where coal represents 26% of power production, it emits 80% of CO2 of the EU power sector.”
Later in the discussion, Giles Dickson added that "we must face a hard reality: Coal will still be a part of the electricity mix."
Currently, much of the coal used in Europe for power generation is imported. Poland, which depends heavily on Russia, is among the top EU countries that receive €10 billion of subsidies each year. "It’s the same amount of money the offshore wind sector gets," Giles Dickson said. The subsidies Poland gets for producing Polish coal, for example, do not make coal production competitive; sometimes what’s produced is not even used, but just piled up. That situation therefore raises questions about the willingness to actually implement the energy transition, using the low-hanging fruit.
Shift from coal to gas
All the panellists agreed that the share of coal in the energy mix must be reduced in the future and replaced by natural gas. "We do not need coal in the future," Oliver Schäfer said. "Coal is our main problem in dealing with climate change and gas has to be part of our future. If we switch from coal tomorrow to a mix of gas, solar and wind, we will go a long way."
Ian Duncan, who represents a former coal country in the European Parliament, also considers gas as an alternative to coal to enable Europe to reach climate goals.
Scotland will shut down its last coal-fired power station next year. Ian Duncan said the dramatic shift "primarily based on ideology" towards renewables opens up new opportunities for gas developments. He added that gas companies "have a responsibility to invest in gas-fired power stations to produce electricity, and to supply people with heat and light when the sun doesn't shine and the wind doesn't blow."
But the rapporteur of the Environment Committee in the European Parliament for ETS reform does not believe the carbon tax would ultimately exceed €30 a tonne. It's "a price that would help but that is too far away to support a short-term transition from coal to gas," François-Régis Mouton told Natural Gas Europe. Instead, Ian Duncan bets on efficiency and innovation. He proposes an innovation fund to support technologies aimed to "keep fuels like gas part of our energy mix".
Combine gas and renewables
Asked about the prospects of a 100% renewables world, the participants have different answers.
"The European Commission envisages that low carbon or zero carbon electricity will be between 93% and 99% of Europe’s power mix by 2050 and that’s realistic," Giles Dickson said. The CEO of the European Wind Energy Association proudly says that onshore wind is now the cheapest form of renewable energy.
François-Régis Mouton disagrees; he does not think Europe will get to a 100% energy mix of renewable energies in the next few decades. "We can say whatever you want to say but it’s a dream in the short to medium term, and this is why we need to cooperate if we want to get on the road to a carbon-neutral economy in 2050 at much less cost.”
The wind industry is well aware of the importance of gas during the energy transition."Before we get to 100% of renewables, other fuels and technologies like gas have a role to play in helping to balance the electricity market in order to balance the variable renewables," Giles Dickson explained.
Oliver Schäfer, CEO of EU Solar Power, called for a transformation of the energy market in which "solar, wind and gas go together".