Gas in the Hearts, Not the Minds
There’s so much talk of natural gas being a complement to renewables, that Paul van Gelder, CEO of Gasunie told a shocking tale to delegates in attendance at the European Gas Conference 2012 in Vienna, Austria, members of Europe’s natural gas community.
“We have achieved a lot by putting gas in the minds of policymakers, but not always in the hearts,” he explained. “In the Netherlands we are constructing three new coal-fired power plants; I find this disturbing. Coal has somehow acquired a better position than gas. A mix of coal and renewables has developed instead of gas and renewables.”
Van Gelder said gas would eventually win though, but only once the Emissions Trading System worked more efficiently.
He explained that Gasunie was involved with major gas infrastructure, like the Gate Terminal and several other projects.
He stated, “The energy world is changing rapidly. There are two trends: the change in European gas supply mix, making for uncertainty on long term utilization of infrastructure; and Europe is undergoing a transition towards more sustainable energy with an important role for gas and it will need extra capacity.”
“We see a general decline in production in the North Sea and the Netherlands and this needs to be replaced,” noted Mr. Van Gelder.
He added that there was uncertainty about the main supply routes in Europe and said there were also developments around the liquidity of the natural gas markets and effects upon pricing: shale gas, and LNG being re routed back to Europe.
“In general I see a requirement for production flexibility,” he explained, noting that in a Netherlands field gas production could be turned down.
“The market for gas in Northwest Europe until 2030 is relatively flat, and quite uncertain,” stated Van Gelder.
His slide proclaimed “The EU Energy Landscape is Changing,” but queried whether natural gas was seen as the alternative fuel.
“Flows see decreasing domestic production, and also see a need for increasing gas flow to Europe.”
Mr. Van Gelder mentioned Nord Stream and Gasunie’s 9% in that gas pipeline.
Regulation, he said, was pushing towards one internal market with smaller price differentials.
He noted the trend towards centralized investment planning: “Let the market do it’s job, then we will receive the required investments.”
Mr. Van Gelder acknowledged various predictions of growth rates for different fuels.
“Lower carbon fuels will make up a larger share for power generation. Gas is and will be around for some time. The situation until 2030 is quite certain, but after that uncertain with the changing governments and thinking at a European level.”
He spoke of “Energy Forum Netherlands,” a group of companies presenting a new study of optimized pathways for CO2 and said the group’s Report showed that the Netherlands could achieve its 2050 target.
Van Gelder said, “Gas will continue to play a pivotal role, as a baseload and balance for intermittent renewable resources.”
Innovation, he said, was the ticket for the future of the industry: “Technologies like power to gas - storing energy in gaseous form is more economical.”
Van Gelder concluded: “Natural gas could balance the economy along with ecology, but if you look at the reality, we still have a long way to go.”