Natural gas should play a key role in reaching Europe’s 2050 climate targets in the most cost-efficient manner, according to a report published today by the European Gas Advocacy Forum (EGAF).
Statoil participates in the EGAF together with a number of other key gas players. The EGAF report addresses how Europe can reach the target of at least 80% reduction in its carbon dioxide emissions in 2050.
“Europe is facing a huge challenge as the energy demand is growing while carbon emissions need to be reduced,” says Rune Bjørnson, senior vice president for Natural gas in Statoil.
“The EGAF report presents a roadmap where one of the main measures is replacing coal with natural gas in the power sector in the next decades. This will cater for immediate and major emission cuts, and is a realistic and cost-efficient way of reducing climate emissions in Europe.”
Natural gas is cost competitive, CO2-emission are up to 70% lower than those of coal, it is based on known technology and provides a robust and predictable power supply.
Rune Bjørnson, senior vice president for Natural gas in Statoil.
“The report presents a roadmap where replacing coal with natural gas is combined with a significant growth in renewable energy sources and a further development and maturing of emission-reducing technologies. The combination of increased use of natural gas and growth in renewable energy is a robust pathway for Europe in reaching its carbon emissions targets,” underlines Bjørnson.
Gas offers an economically attractive option to meet emissions targets, including the European Union’s 20/20/20 targets. It can contribute to emission reductions by 2030 whilst not creating any restriction in the other available options for the continued abatement to 2050. This study provides a technical analysis on the contribution gas can make to achieving the emission reductions targeted by the EU. It builds on the scenarios outlined in the European Climate Foundation’s Roadmap 2050 and accepts emission reduction targets as ‘given’ even where those targets may be very hard to deliver in practice. It also takes into account several constraints that place upper and lower limits on the pace of implementation and on the mixes of conventional and new technologies for power generation in Europe. It aims to facilitate the debate on the options to reach this goal by describing three potential pathways to achieve the 80% emissions abatement targets by 2050, and the derived intermediate target by 2030. The main conclusion of the study is that if Europe is to set stringent CO2 emission targets, it should do so without mandating the technology. This will in turn ensure that significant investment costs will be avoided, thus contributing to Europe’s competitiveness.
The study represents the collective view of the working groups of the Forum but does not reflect that of individual companies or organizations.
KEY FINDINGS OF THE STUDY
The potential for reducing emission reduction costs by using gas in the energy mix is sizable in comparison with the pathway described in the ECF Roadmap 2050 ’60% Renewable Energy Sources (RES) scenario’. For the period 2010-2030, total investment costs in the power sector could be €450-550 bn lower, leading to an improvement in overall power-system costs of ~€500 bn. Additional cost savings of similar magnitude may be possible for the period 2030-2050 but are much more uncertain.
On a household level, these improvements could translate into annual electricity and heating cost savings of €150-250. Energy-intensive industries, which employ 20-25 million people in Europe, could avoid an increase of costs that would equal around 5- 10% of their profits if they were unable to charge through or otherwise compensate for higher energy costs.
Reducing implementation risk
Adopting the pathways for 2010-2030 defined by this study would allow Europe more time to select and fine-tune its carbon abatement plans for 2050. The pathways rely less on further development of emerging technologies and therefore present less uncertainty around implementation. The resulting power-system would require less transmission and back-up capacity to be sufficiently robust, thereby also reducing country interdependence.
Seizing the potential of gas to meet targets for 2030 will also allow Europe more time to prepare for the potential implementation of intermittent power generation technologies (including, for example, the build-out of international transmission grids), or international collaboration in planning and operation of the energy system. Safeguarding robustness of power system and security of supply The pathways would safeguard the robustness of the power system and security of supply. Through a lower reliance on intermittent technologies, a 25-40% lower build-up of transmission capacity would be required. Security of gas supply can be ensured: proven reserves are large and increasing, and as a result of current and planned construction of new LNG capacity and pipelines, there is ample supply capacity and diversification of the supplier base.
Source: EGAF, February 24, 2011