Updates

Gas is one of the safest bets for EU’s energy and climate success

04 July 2017

Europe will need gas to make renewables work. One of my principal aims as the new president of GasNaturally will be to engage with our partners and policymakers and explain why gas is one of the safest bets if we want EU energy and climate policy to be a success, writes Marco Alverà.

Marco Alverà is the president of GasNaturally, a grouping of European gas explorers, producers and distributors.

At this stage, the advantages of gas as a cleaner alternative to coal are well known. But there is one aspect which is sometimes overlooked in the pursuit of delivering policy: affordability.

If consumers have difficulties paying their bills due to costs associated with the greater share of renewables in the energy mix, the transition to a cleaner system could face strong opposition from the public.

If governments choose this path, they will face a public backlash at some point and will have to slow the adoption of cleaner technologies, jeopardising the overall process. There is a risk that if consumers can’t have affordable heating, they will make their governments feel the heat. Governments need gas to ensure that renewables are accepted by the public. Gas is needed to make renewables work.

There are a few things we can do, however, to achieve a low-carbon economy at a lower price tag.

We already know that switching away from coal to gas in power generation – where coal contributes around 80% of the sector’s carbon emissions – will cut CO2 emissions by half. This can be done by restarting existing gas plants and even converting coal plants to gas plants at a limited cost.

When it comes to heating, electrification raises costs for consumers. In Europe, electricity is three times more expensive than gas per kWh. Despite falling prices for certain technologies, this gap is expected to widen in the years to come as electricity infrastructure needs to be reinforced and large-scale storage becomes necessary. In terms of efficiency, gas appliances are among the most efficient and cheapest to run, especially compared to electric versions.

Gas – compressed natural gas (CNG) and liquefied natural gas (LNG) – is also well suited for transport, representing a cost-effective solution for reducing carbon emissions and improving air quality. Beyond the road transport sector, these technologies are also able to deliver environmental benefits for the marine sector, when used in river barges and sea/ocean-going ships.

Some advocate mass electrification of various sectors as the best way forward. However, this would jeopardise the security of energy supply, restrict choices and unnecessarily add cost to consumers’ bills due to the large investments that would be needed to renew and expand electricity infrastructure in a short time.

Existing gas infrastructure can carry energy across the continent at a much lower cost than new electricity infrastructure. It can simultaneously provide the option of large-scale energy storage by converting excess electricity from solar and wind sources into synthetic gas.

R&D funding should therefore focus on emerging technologies, such as carbon capture and storage, power-to-hydrogen or methane, and any other promising, non-mature technologies. Subsidies for mature technologies, which are already competitive, only inflate consumer energy bills and need to be phased out.

Finally, the safe production of gas here in Europe deserves to be maximised to preserve and extend diversification of energy supplies, create jobs and a strong supply chain, and generate government revenues.

Our industry is committed to helping the EU achieve its climate and energy objectives. We are also committed to providing affordable energy to consumers. But we will only succeed in modernising our energy system if European consumers support this effort, which is conditional on their ability to pay their bills.

In short, our objective is clear: to rapidly build a cleaner, reliable and affordable energy system for all consumers. The optimum, direct route to achieving this is by combining natural gas and renewables.

If we do not get the approach right, we risk alienating consumers, who are crucial in enabling the energy transition.

Let’s prove that clean energy and affordable bills can go together.