This article is part of our special report Future of gas.
Switching from coal to gas in power generation is the single most important action Europe can take to get on the path to net-zero emissions by 2050, argues Simon Blakey, a European gas expert.
In an interview with EURACTIV, Blakey agrees that gas will need to decarbonise by mid-century, but argues that in the meantime, a fast switch from coal-to-gas can deliver the deepest, fastest cuts in CO2 emissions and reduce, rather than exacerbate, methane emissions.
Simon Blakey is a Senior Associate at IHS Markit and an expert on the European energy industry. He was Special Envoy for Eurogas from 2010-14 and prior to that, worked for nearly 20 years for CERA (Cambridge Energy Research Associates), now IHS Energy.
We have heard about the value of natural gas as a lower-carbon alternative to coal, as a flexible partner to renewables and of late, as a precursor to carbon-free gases. What is the primary role of gas in the energy transition?
There is so much focus on the ultimate objectives of either net-zero decarbonisation of all gases by 2050 or electrification of all sectors that we miss the critical point of the IPCC’s 1.5-degree report: we have to do something immediately. We don’t have the option of waiting.
It’s fine to talk about 2050 but that is not what the climate really needs. It needs urgent action. The role of the gas industry – and the energy sector as a whole and policymakers – is to make the obvious, quickest, deepest cuts in emissions using existing facilities.
Nobody has to invest in potentially stranded assets. Using gas at higher load factors and taking coal and lignite down to lower load factors – or preferably nothing at all – at existing power stations, using existing infrastructure, gives you much deeper, faster cuts in greenhouse gas emissions than anything else.
All the discussion about the greening of gas, investments in electric versus gas infrastructure and economy-wide carbon pricing – none of it is as relevant as the possibility of a massive coal-to-gas switch in the power sector.
Isn’t this already happening? The EU carbon price is back up to around €25 a tonne. In July, the Fraunhofer Institute in Germany reported that German power plants emitted a third less CO2 in June 2019 than a year earlier due to a switch from lignite to gas. In this case, isn’t it time for the gas industry to focus on the next step, which is decarbonising all this gas?
Yes, the fuel switch is starting to happen but it’s not because of the carbon price. The biggest difference with six months ago is that gas has become cheap because there is plenty of it. The coal-to-gas switch in places like Germany is not happening because of the higher price of carbon – sure, that has added a few euros – but primarily because the price of gas has halved.
In the long term, by 2050, yes – all gas will need to be decarbonised. We as an industry are doing a lot of work on hydrogen right now. There is a great deal of technological innovation underway, both in electrolysis [for green hydrogen] and in steam methane reforming with carbon capture and storage (CCS) [for blue hydrogen]. CCS is back on the agenda again. Personally, I think hydrogen is a better bet than biogas for the long term because of the limitations of biomass sources and the competing uses for them.
Coming back to my first point however, all this is necessary for 2040 and 2050 but focusing only on this now is missing a massive opportunity.
One of the persistent challenges to greater use of natural gas on any kind of timescale is the problem of methane leakage along the supply chain. At best, there is genuine scientific uncertainty over its magnitude, and at worst some NGOs estimate it to be much higher than official estimates.
You’re right, there’s a lot of talk about methane emissions from gas. Most people do not realise however, how much methane is emitted from coal production.
The climate and energy data that Europe submits to the UN Framework Convention on Climate Change (UNFCCC) show that one of the reasons we’ve been so successful on greenhouse gas emission reductions is because we’ve reduced domestic coal production in countries such as France, Spain and Germany.
Total European greenhouse gas emissions have come down by 23%, but methane emissions – and remember, methane is a much more powerful greenhouse gas than CO2 – have come down by 35% since 1990. Energy-related methane emissions have come down by 56%.
Here in Europe, methane emissions have gone down over the last 30 years while natural gas production and consumption have gone up mainly because coal mining has decreased. There has also been a change in agriculture, which means we have fewer cows today. What it boils down to is that cows and coal, not gas, have mattered most to methane emissions.
So there is a double benefit to the coal-to-gas switch: a methane reduction upstream as well as a CO2 saving downstream.
Neverless, methane emissions from gas are still a problem, and researchers now suggest that the fracking to produce shale gas can lead to an increase in methane emissions.
Globally, methane emissions from oil, gas and coal are roughly similar – they each emit about 40 million tonnes of methane per year. For oil and coal the emissions are upstream – from venting and mining respectively – while for gas they are primarily downstream: seepage from old pipes in the distribution networks.
Yes, shale gas production can produce more leakage than conventional mining if it is not managed properly at the back-end, but it is still very small compared to the leakage from old cast iron pipes.
When you substitute gas for coal in power production, the beauty is that the gas does not pass by the distribution network but flows straight from the medium or big pipes i.e. the transmission network to the power plant, so there is no methane leakage. The distribution network comes into play when gas is used for heating.
It is hard for people to understand because gas is methane. They do not realise that it is also chemically embedded in coal. We are talking about hard coal by the way – methane emissions from lignite are much lower.
If the primary role of gas in the energy transition right now is to take over from coal in power generation, is there anything policymakers can do to help make that happen?
The coal-to-gas switch is not going to happen by itself. It needs emission performance standards. For example, power stations should only be allowed to emit 400gCO2/kWh.
These standards are a perfectly available but neglected policy tool. In their absence, you are dependent on the cyclical price trends in the energy market. Sure, a higher carbon price helps, but the key driver is the relative coal-to-gas price. That is favourable to switching right now, but eventually global gas demand will catch up with supply and by the early to mid-2020s the LNG market will need another wave of investment to keep production up.
From a policy perspective, performance standards – just like those that exist for carmakers – would enable the EU to stay ahead of the market.