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    EC hatches plan to cut carbon [NGW Magazine]

Summary

The EC has a solution to the problems of attaining a zero-carbon energy system at a reasonable cost, explains Klaus-Dieter Borchardt. [NGW Magazine Volume 4, Issue 2]

by: Jeremy Bowden

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EC hatches plan to cut carbon [NGW Magazine]

The UN’s warnings on global warming late last year underlined the need to cut net carbon emissions to zero by 2050 to avoid catastrophic global warming, and the adoption of climate protection rules at the COP 24 in Poland in December has also helped to focus minds.

But, even if the political will exists – a big if – there are still real, technical questions as to how to reach this zero-carbon world and how to ensure the transition is smooth. Problems include the intermittent nature of most renewables; the huge potential cost of electrifying heating systems; stranded assets; and the impossibility of using electricity in some areas, such as high-temperature industrial processes.

The European Commission (EC) now believes it has a solution to these problems, based on a “dual” power and gas energy system, where gas is used to back-up renewable power and is steadily decarbonised beyond 2030 in both heating and power systems. This includes the use of carbon capture and storage (CCS). Surplus renewable power would be converted to zero-carbon gases, including green methane and hydrogen, with the gas network acting as a form of power storage system. The gas can be used when required to fire power plants, as well as continuing to supply customers with (eventually) decarbonised gas.

The system would also be more secure, as power is more digitised than gas and so more open to cyber-attacks – a second layer would remedy this.

Studies are underway into the approach, which is now rapidly gaining popularity, according to Klaus-Dieter Borchardt, the EC director for the internal energy market: “We are still in the development and research phase of our dual plan… We’re looking first at national regulatory frameworks where we can see barriers, both on the infrastructure and on the market side, and then we’ll identify gaps that can be filled at the EU level. First results will be in April 2019 and then work on impact assessments will begin.”

He said Europe needed a comprehensive proposal to frame the future of these processes in the best manner, at least at EU level, so companies could benefit from a more predictable and stable framework within which they can work successfully.

He also wants to see a larger scale power-to-gas plant developed: “I would like most of the regulatory restraints stripped away, so a company can develop such a project more freely – on the condition that results are available to everybody.” Economies of scale would be key.

Support for the plan has come from many stakeholders, including member states, industry groups and even Eurelectric, Europe’s electric industry association.

At a recent gathering in Madrid, held to discuss the plans, Eurelectric said its members would only be able to meet 65-68% of zero-carbon energy demand by 2050. They noted that there would be a seasonal storage problem if they didn’t have a “super-battery” and asked the gas sector to help them overcome the problem; potentially by using gas as energy storage, according to Borchardt.

The EC is keen to get things moving. European network operators will now have to provide an inter-linked gas and power model as part of their ten-year network development plan, rather than separately as in the past. They will also have to make an assessment of where existing infrastructure could be used most productively in a possible future joint system, including the storage of hydrogen from surplus renewable power in the gas pipeline and storage network.

The EC will also use the TSO/DSO (Transmission/Distribution System Operators) platform for co-operation to help achieve the dual-system goal, but no subsidy flow or public funds are planned, with the transition to be conducted entirely through the development of new technologies that prove themselves in the market.

Borchardt noted that incorporating gas made use of existing infrastructure: “If you kick out gas you make the whole gas grid a stranded asset. We are still investing heavily, but we should stop immediately if we were only looking at a five or ten year use for the infrastructure. If you want to do things in the most cost-effective way, you need to use both power and gas.”

He said there was also hope for CCS, claiming the problem with earlier plans had been to combine CCS and CCU with power plants. Instead, CCS should be combined with industrial users, as is the case in Norway, where a system takes CO2 from industrial plants around Oslo and stores it in the North Sea.

The EC expects gas to win out over coal as a result of today’s higher carbon price in the European market. “The ETS price has gone up and we hope it will increase further, which will make coal less competitive compared with gas. If that does not happen, then more action may be needed… We also believe that gas prices will go down again, and that the recent rises were not a long-term development. We’re working to bring more competition into the market to keep gas prices in check, but we will not directly intervene in the markets to achieve the desired result.”

Hydrogen

Hydrogen development will take time and is likely to be scattered and focused on industrial areas close to large intermittent renewable sites (mostly wind in northern Europe). It has to be mixed with methane in the gas network in order to meet grid specifications and it can also be used in power generation.

There are already some examples of projects underway, including the HyNet methane reforming project (brown hydrogen plus CCS) in northwest England, as well as a small one in Orkney that will produce green hydrogen from surplus tidal and wind power.

Borchardt noted that it cost €260mn ($300mn) just to curtail a single wind farm in northern Germany, “which is money that could go towards investing in hydrogen production, which will be consumed in that region, with development of local demand and distribution.”

Eventually, green hydrogen would provide an alternative revenue stream to renewable generators, offsetting the problem of low power prices during periods of high renewable output, and lifting income as well as stopping curtailment.

Green opposition

While there has been widespread support for the plan, political opposition to the idea continues in the European Parliament, where some are opposed to using gas, and are not engaging in the discussion on renewable gas, including biomethane and even green hydrogen from surplus renewables.

The EC acknowledges that it may take some effort to convince both the Greens to accept a gas element, or the public to fund a transition – despite widespread public concern over global warming in polls.

“The transition will cost a lot of tax-payers’ money, so we need clear agreement from the member states, because if we want to develop this way the composition of the energy price has to change - the levy and tax component has to go down. We will see increases in network charges, but not so much in the commodity component, I expect.

“But with taxes and levies already at 50-60% of the final energy price, that is already too high and not the right means to fund the required investments in the energy transition – that has to change… Support for the energy transition is very strong among the European population. But you have to explain, and you cannot expect the consumer to bear all the cost.”

Borchardt makes a lot of sense – it could be time for the politicians to just leave the engineers with the zero-carbon objective, and let them work out the optimum solution. The dual system looks like it could be the best yet.