Every month we will be featuring an article written by one of our team members about their fields of interest and what motivates them to change the world. For the fourth instalment of #ElephantsSpeak we have a post from one of our managers, Nick Chapman.
As many societies started the shift away from fossil fuels in the early 2000s to respond to the threat of global heating, many predicted the end of our natural gas pipelines, boilers, and power stations. There seemed to be no way of decarbonizing the gas supply from a technical standpoint, so it had to go. Electrification appeared to be the only way forward: massive growth in wind and solar generation combined with the implementation of electric cars and heat pumps; this was the mantra of most experts at the time.
However, over the past decade, concerns over climate change have inadvertently accelerated the demand for natural gas: closure of coal power plants, the most inefficient and polluting form of electricity generation. Many governments have relabelled natural gas as a “transition fuel,” helping society reach zero-carbon without breaking the bank. Combined with growing global energy demand and a flood of cheap shale gas into the US market since the 2010s, has led to a 33% increase in global natural gas consumption over the past decade.
While it is true that switching from coal to gas has made significant contributions to reducing global greenhouse gas emissions, natural gas remains a critical environmental issue. Fracking and other new forms of natural gas extraction have been shown to cause significant methane leakage into the atmosphere, along with local groundwater pollution. At the demand end, effects such as methane slip during natural gas usage have been revealed to be more significant than previously thought. This suggests that perhaps natural gas is not a cleaner transition fuel as we once thought it was.
The economic case for natural gas is also currently being challenged. In the winter of 2021, European average gas prices increased by over 300%, from around 20€/MWh the year before to 60€/MWh. Whether this is a short-term spike or a long-term trend remains to be seen. Still, this sudden change sent shockwaves across Europe. Governments are now urgently putting in place policy to shield citizens and businesses from the worst effects, high energy prices and social revelation tend to go hand-in-hand!
So, what does this all mean for the clean energy transition? The answer seems to be a simple one: more clean, affordable, and locally produced renewable energy capacity, plus much better energy efficiency to ensure that energy is used well. However, in the 2000s, electrification was the “golden bullet.” Today, a more complex vision is emerging of what the clean energy transition might look like, and this time, gas has a role to play! This is not natural gas this time, but renewable gas: hydrogen, biomethane, and synthetic gases; these gases will play a critical role in keeping the lights on. Storing excess renewable electricity for the days when the sun doesn’t shine, powering our trucks, ships, heavy industry, and opening up a global market for renewable energy trading and transport.
Significant investment and innovation will be needed to achieve this transition, and Inveniam Group is delighted to play a small role in the growth of renewable energy!