Molecules – The Eurogas Newsletter (September 2021)

Editorial: James Watson, Secretary General

Dear Readers,

Welcome back to the Eurogas newsletter. I hope you had a restful summer and you’re ready for the busy times ahead. With the launch of the Fit for 55 package and the upcoming Gas Decarbonisation package, we’re working through a productive autumn.

Since we returned, we’ve held our inaugural Eurogas TECH Conference and it was great to see so many of you tune in. We’ve included the highlights from our President, Didier Holleaux’s, speech below. Mr Holleaux shared his ideas on how Europe can become a global leader in decarbonised energy systems and how we can keep the costs of the transition low. In this way, we will protect the European economy and create quality jobs. If you’d still like to watch the conference, you’ll find a recording here.

This month we also welcomed a new member, PGE Group (Polska Grupa Energetyczna). The company has contributed an article outlining plans to reach zero emissions in Poland, and the potential of the European Commission’s Sustainable Finance initiative to support this. As explained below, a flagship project by PGE Group will see coal to gas switching cut emissions, then use green hydrogen to reach carbon neutrality.

We’ve also launched the final in our series of Gas Tech Talks with Equinor’s Vice-President for Global CCS solutions, Torbjørg Klara Fossum. Take a few minutes to listen as she explains the importance of Carbon Capture and Storage technology in achieving our goal of decarbonisation before 2050.

You may have spotted we’ve also refreshed our visual identity. Many of you will already know we see an important role for blue hydrogen as an early driver to provide scale. As explained in our Pathways study, the share of green hydrogen will then overtake it by 2050. We’ve captured that blue to green transition in our new logo and we hope you like it.

October will be just as busy. A few of us are off to Munich next week to attend The Smarter E Europe. If you’re going to be there, come and meet some of the team at stand B6.470J.

Wishing you all a great autumn,

Stay well,
James

European Gas Tech: Delivering on 2050 – Didier Holleaux, Eurogas President

I can say with great pleasure that we in Eurogas are fully behind the headline Fit for 55 targets, indeed our own study last year confirmed that we must have at least 55% carbon reductions by 2030 to stand any chance of reaching carbon neutrality in 2050. I will also reiterate that with the right framework, we in the gas sector can aim to achieve carbon neutrality well before 2050, in fact not much later than 2045.

This is why we are calling for targets for gas decarbonisation and deployment of renewable gas by 2030 in the next major legislative package due later this year – the gas decarbonisation package. These would see a 20% reduction in greenhouse gas intensity of gas by 2030, underpinned by a target of 11% of renewable gas in final gas demand: these figures are together ambitious and achievable.

The change in the energy sector in the coming 30 years will have a major impact on the technological positioning of Europe. Europe must take the lead in the production and development of the next generation of clean technologies that will be needed to fight climate change.

In Europe, we are already the leading producer of electrolysers for green hydrogen production, and anaerobic digestors for biogas, as well as being blessed with the geographical potential to be a world leader in the production and deployment of biomethane and CCS technologies – including pyrolysis. We have global leaders in the manufacture of LNG Engines for ships, hydrogen boilers for homes and turbines that can run on renewable and low carbon gases. We will need all of these technologies if we are to win the fight against climate change, and Europe has the chance to be the world leader in the production of these, and other, gas technologies.

This is important as Europe will need to have not any energy transition, but a socially responsible and just transition if there is to be any chance that communities accept the changes that will be necessary. Europe has a unique opportunity.

If we invest and develop the right policy framework now, Europe can show the way and become a major exporter of gas technologies to the world, and not just a deployer of technologies manufactured elsewhere. The European Commission has already realised this and has earmarked the deployment of 40GW of electrolysers by 2030, not just in the EU – but in the European neighbourhood.

Specifically, the Southern Partnership Strategy has laid down that in North Africa and the Middle East another 40GW of electrolysers must be deployed by 2030.

This is a good start but we will need more, we must set our sights on being in the first position globally in these technologies. This will bring the quality, non-seasonal jobs that Europe will need to have social acceptance of the energy transition.

Ensuring that we have jobs for communities must go hand in hand with the energy transition and we in Eurogas are committed to making sure that the energy transition delivers quality job opportunities for EU workers. To this end, we are working with the European Commission and the trade unions, EPSU and IndustriAll, on a study to identify the skill sets and training that will be needed in our sector as we move from the use of natural gas to hydrogen and biomethane in the coming years.

The findings of that study will be available next year, but we can already be sure that re-training will be needed. We can also be sure that the production of gas will change in its geographical scope. Indeed, the production of hydrogen from renewable power and the production of biomethane are likely to be more decentralised than the gas supply system of today. This too will have implications for communities and jobs in the future, requiring mobility of labour.

Nevertheless, the possibility for the maintenance and indeed the increase in quality jobs in our sector is clear. This is a unique chance, let us take it.

Some stakeholders would like to see a small niche role for these European-made technologies, limiting them to a few transport or industry related end-uses. Most of them simply underestimate the potential of our technologies. In Eurogas we do not see the future in this way. We see a much more universal application of gas technologies, including in the building sector.

With an extensive gas infrastructure across Europe, it makes environmental, financial and social sense to reuse this network with renewable and low carbon gases. This will save an enormous amount of money for the European taxpayer – according to our study, around 4.1 trillion Euros by 2050. That is more than the GDP of Germany in 2019, which came in at 3.3 trillion Euros.

If we utilise gas tech to its full potential, we will not only save money, but we will save European jobs – and even better, we will create many new quality skilled jobs too.

Let us hope that the Fit for 55 and gas decarbonisation packages will deliver the policy framework we need to unleash the potential of gaseous energy in Europe.

If it does deliver such a framework, we will be able to see the benefits for Europe – not just in the reduction of greenhouse gases, but also the benefits of being the leader in clean technology manufacturing reaping the rewards of jobs and growth.

Didier Holleaux, Eurogas President

.

PGE: Bringing Poland to the era of low and zero emissions

PGE Group is becoming an energy transition leader in Poland and is set to achieve climate neutrality by 2050. We are Poland’s largest energy utility with an installed capacity of around 17.8GWe, 5 million customers and a share of more than 40% of power generation in Poland. In keeping with our strategy, published in October last year, PGE Group aims for 2.5GW of offshore wind capacity in 2030 and plans to increase its onshore wind and PV capacity by 1GW and 3GW, respectively. By 2040, offshore wind capacity will be equal to 6.5GW. By 2030, zero- and low-emission sources will constitute 85% of our generation portfolio and the share of renewable energy will increase to 50% of the total generation. By 2050, we aim to provide 100% green energy to our customers.

Natural gas will play an important role in PGE Group’s transition. One of our flagship projects is at the Dolna Odra power plant in north-western Poland. The aim of the project is to replace existing coal units with two CCGT units, 700 MW each. This will not only restore the generation potential of the plant but will also allow for a significant cut of the plant’s CO2 emissions – from over 900 kg/MWh to around 325 kg/MWh. The net value of the project is about EUR 820 million and the two CCGT units should be commissioned by the end of 2023. Natural gas is also an important factor in the transformation of PGE Group’s combined heat and power plants (CHP). These plants will undergo a coal-to-gas switch and, in the long-term, will be ready to utilise green hydrogen. They will become low- and zero-emission, significantly improving air quality in urban regions. A flagship project in this area is the construction of a 200MW CCGT unit in Czechnica CHP located in southwestern Poland. The net value of the project, which should be completed in 2024, is about EUR 270 million. By 2025, total expenditures on new gas-fired CHPs of PGE Group could be as high as EUR 1.5 billion.

Such an ambitious investment program will require proper private financing as well as public one. Therefore, PGE Group is particularly interested in the Commission’s Sustainable Finance agenda and especially the EU Taxonomy. Of utter importance for us is the question of whether gas will be regarded as a sustainable energy source, as it is defined in the Polish energy system. In Poland, where gas capacities have not been so far developed on a larger scale, the role of natural gas as a transition fuel is essential. If gas will not be classified as a sustainable energy source, the costs of the energy transformation for Poland and PGE Group, will significantly hamper the energy transition. As result, a switch away from coal will not be delivered in a timely manner.

PGE Group (Polska Grupa Energetyczna)

---

Gas Tech Talk: Carbon Capture And Storage by Equinor

Torbjørg Klara Fossum from Equinor explains the CCS technology and its necessity to achieve the goals of Paris Agreement and carbon neutrality by 2050.

Equinor is a driving force in carbon capture and storage (CCS) technology in Europe. Torbjørg Klara Fossum, Equinor’s Vice President for Global CCS solutions, explains the technology and why it is essential to succeeding on climate goals.

CCS captures CO2 at the emissions source. It is then transported to a storage facility and pumped deep underground. Of the 20 plus CCS projects across the globe, Equinor operates two: Sleipner and Snøhvit. It is also a partner in Northern Lights, with TotalEnergies and Shell. Northern Lights offers CCS solutions to industries like steel and cement and enables them to transform into low-carbon sectors. It also creates the possibility to remove historic CO2 emissions and implement credits for negative emissions.

To effectively use the full potential of CCS, Eurogas is advocating for:

• Kickstarting a cross-border carbon dioxide network in the EU, to support the development of carbon capture storage and utilisation. To achieve that the TEN-E Regulation and State Aid Guidelines should strongly support infrastructure and equipment for the transport of carbon dioxide (through pipelines, ships, trains, or trucks) and its storage.
• Enabling gas infrastructure organisations or other energy companies to transport CO2 as a regulated activity, including offshore facilities, to storage sites.
• Encouraging Member States and other parties to the London Protocol and prioritise ratification of the 2009 amendment of Article 6. This allows for cross-border transport of CO2 for offshore storage.

---

Events – Coming up

A Green Deal for Clean High Quality Jobs and Growth in Europe driven by the Energy Sector? | 13 October 2021, 10:30-12:00 (CET)

ees Europe Restart 2021 (The Smarter E Europe) | 6-8 October 2021

Electrolyser Plants & Power-to-X | 19-20 October 2021

World Hydrogen Leaders Conference ‘World Hydrogen Decarbonising the Gas Grids’ | 27 October 2021

World Hydrogen Leaders Conference ‘World Hydrogen Decarbonising the Gas Grids’ | 27 October 2021

HyVolution 2021 | 27-28 October 2021

Enlit 2021 | 30 November – 2 December 2021