The three pillars of future energy systems will be : efficiency, renewable electricity and energy storage. Efficiency in energy systems will be strongly dependent on balancing supply and demand, not only moment by moment, but also intra-day and intra-week – coping with peaks and troughs. With increasing amounts of renewable electricity generation, balancing becomes ever more important, even down to the hour-by-hour scale. In addition, besides fine grain issues, there will be climate and weather variations in demand for energy, and also seasonal variation. At the present time, there is a significant disparity between summer and winter gas demand for many developed, industrialised countries. This divergence between seasons is not so pronounced in power demand, unless there is strong demand for electrical heating in winter. That power demand does not have as wide a seasonal swing as that for Natural Gas is a good thing – as it means that nations do not need to build electricity generation plant that remains idle for most of the year. With the anticipated exit from coal-fired power generation, countries are likely to want to turn to gas-fired power plants, which will increase gas demand year-round, but will not reduce the inter-seasonal demand disparity.
Energy system efficiency being dependent on balancing services where there are high levels of renewable power generation in the grid networks means that there will be a growing need for inter-seasonal energy storage. There is likely to be an excess of renewable electricity generation in summer, as is already being seen in Germany. Solid state energy storage, such as large scale batteries – whether chemical, thermal or potential energy – are likely to remain suitable for short cycle load balancing, but may not be able to stretch to time periods longer than a few weeks. Other options for energy storage are in development, but Germany and other countries have already decided to go for low carbon gas to store summer solar and other renewable power excess. Germany’s dena agency plans gas grid injection of a low volume of “Power to Gas” Renewable Hydrogen and a higher volume of synthetic methane. It is important to note that the scale of production possible for low carbon industrially manufactured gas is an order of magnitude greater than for biogas (made from biomass by microbiological processing).
Work to strengthen energy security will help with choosing manufactured gas for energy balancing between seasons. The UK and other countries are improving and increasing Natural Gas storage facilities, and work to manufacture methane-rich gas can make use of this provision. A shift towards low carbon manufactured gas over the next few decades will help meet tightening carbon budgets, as the use of Natural Gas will become subject to constraint, because Carbon Capture and Storage will not be developed rapidly.
The total amount of gas demand is likely to remain high. Despite the fact that over the next few decades, increasing building insulation rates will strongly reduce strong winter demand for gas, gas is going to be increasingly used in mobility solutions – for example compressed gas inter-city heavy good vehicles, shipping and trains. This will make gas demand more uniform throughout the year, so inter-seasonal gas storage will not be so vital. However, there will still be cold, wind-less, dark winter days when gas will be important, even if it’s only for power generation.
To make Renewable Gas viable in the short-term, it is vital to have as much solar power and wind power as possible, to put into “Power to Gas” systems. As time goes by, new methods to make Renewable Hydrogen will emerge, complementing the electrolysis used for today’s Renewable Hydrogen production. Interestingly enough, these advances could come from within the petrorefinery sector, where there is growing demand for hydrogen for clean refinery processing. It makes no sense to compete with other gas users by making all this new hydrogen from Natural Gas – sooner or later Shell and BP will turn to making Renewable Hydrogen in large volumes.
Low carbon manufactured gas – both Renewable Hydrogen and synthetic methane – can help the oil and gas companies survive, if they follow a strategy to first of all transition out of crude petroleum oil to Natural Gas, and then transition to Renewable Gas. The use of Natural Gas will decline, and the use of low carbon gas will increase, reducing the risk of economic discontinuity from the collapse of “big oil and gas”.