Renewables’ rise alters gas energy equation
The way in which gas is used is set to change fast, as the fuel develops into a natural partner for renewable energy, delegates at the World Gas Conference were told
"The world of gas that we are used to thinking about – a long-term supply baseload that goes into market, forecast for 20 to 30 years doesn’t exist anymore,” Marco Arcelli, executive vice president, upstream gas division, at Italy’s Enel Energia said.
Instead, gas will have to be used flexibly to support intermittent renewable energy supplies – mostly from wind and solar – whose falling cost means they are going to be increasingly widespread, regardless of how quickly coordinated clean energy policy develops around the world.
“We need a back-up that is environmentally sustainable, affordable and, more importantly, can pick up load fast – and gas, of course, is the natural answer to this,” Arcelli said.
The flexibility required can be extreme. In Spain, where both wind and solar energy are widely used, the capacity of combined cycle gas turbine power stations required by the grid varied from 2 gigawatts (GW) to 18 gigawatts (GW) within the space of one week.
That risks making the overall cost of gas power more expensive over the lifecycle of a plant than if the facility were able to work close to capacity most of the time.
It also means gas supply to power stations will need to become more flexible too. “We will need greater investment in storage, and LNG [liquefied natural gas] will also have a big role to play,” he said
LNG could potentially develop an advantage over pipeline gas, because it can more easily be diverted from its original destination to another if demand weakens there. However, that benefit disappears if the LNG is delivered on a long-term contract – as the vast majority of it is at present.
Another component to solving the problem of intermittency is to improve both intra- and international grid connections to ensure that excess power in one place can be easily transferred elsewhere.
Christian Kjaer, chief executive of the European Wind Energy Association (EWEA), told delegates that grid bottlenecks would become increasingly problematic for both wind and gas power providers. He said Spain, again, provided a good example of what awaits others, as the limited capacity of its grid interconnector with France – and the rest of western Europe – prevents large-scale energy transfers out of the country.
“The vast amount of gas fired power plants built in the last few years together with the wind energy that has been built, combined with the fact that they can’t get the power out of the market means that the power plants are running at 20% or 25% efficiency,” he said. That was not in anyone’s interest, he added.
Kjaer said that the European Commission’s (EC) latest strategy statement on renewable energy development, released earlier this week, suggest that politicians may now be getting serious about overcoming the challenges faced in upgrading all this infrastructure. He said the EC seemed to be shifting towards a view that greater investment in European energy development would be more beneficial than reliance on expensive imports.
The commission has also thrown its weight behind projects such as Desertec, which aim to connect North African solar supply to European markets.