10/25/2011

Using natural gas potentials for the energy turnaround - remove existing impediments

Press Statement of Ewald Woste, President of the German Association of Energy and Water Industries (Bundesverband der Energie- und Wasserwirtschaft - BDEW), President and CEO of Thüga AG, Munich

Ladies and Gentlemen,

I’m happy to welcome you to our Press Meeting at the 2011 Gas Industry Conference (gat).

 

In Germany’s energy policy debate, natural gas has experienced something like a rollercoaster ride within one year: Still at the beginning of 2011, natural gas has been considered by politicians and the public a phase-out model. The German Federal Government’s Energy Concept of September 2010 did not mention natural gas as main energy source in the energy system of the future. Nevertheless, even after the energy concept had become known in September 2010, BDEW firmly made a stand for natural gas to remain an important component of the energy mix

 

The reappraisal of nuclear energy after the Fukushima disaster and the associated change of direction in terms of energy policy has changed many things. Almost all policy makers agree that natural gas will be a strong and indispensable backbone for the transformation of the energy system towards increased utilisation of renewable energies. The keywords describing the potential of natural gas are known:

 

Natural gas is efficient and flexible in electricity generation:
Modern natural gas power stations are best suited to offset the fluctuations in electricity generation attributable to increased feed-in of renewable energies, while efficiency losses are low. Such natural gas power stations which can be rapidly connected and disconnected will be required in future to a greater extent to maintain security of supply. A further important argument for the use of natural gas in electricity supply is that gas power stations can be constructed comparatively fast within 2-3 years. And due to their low emissions, they are widely accepted by the population. BDEW therefore insists that the Federal Government presents a reasonable power station funding programme.

 

Natural gas infrastructure can serve as storage facility for electricity from renewable energies:
A promising approach is the conversion of renewables-based electricity into hydrogen or methane upgraded to natural gas quality, as Professor Krause already explained. This approach is promising because there has no ideal solution been found so far for storing electricity. Batteries have only limited storage capacities and they are too expensive. Pumped-storage power stations are subject to tight limits in Germany due to topographic conditions and opposition from citizens. This is where the „power to gas“ technology comes into play: This technology enables our existing gas infrastructure with a natural gas grid of 443,000 kilometres in length to be used in future for the storage and transport of green electricity.

 

Natural gas will become the backbone of an integrated energy system:
In an increasingly decentralised energy system, electricity generation and heat supply are growing together. Large potentials are opening up here for natural gas and its innovative applications which can be summarised under the heading „smart gas grid“.

 

Against this background, BDEW supports the DVGW’s innovation offensive regarding new technologies and system solutions on the basis of natural gas.

 

Ladies and Gentlemen,

The issues I have just mentioned also make clear that the public debate about the energy turnaround in Germany focuses almost exclusively on future electricity generation and the necessary development of energy grids.

 

Though these issues are unquestionably of particular importance, one topic which is also of substantial importance for achieving the climate targets might be left out account: the CO2 savings potential in the heat market. This sector accounts for 40 percent of the German energy consumption. After all, the German Federal Government wants to realise almost half of the intended reduction of carbon dioxide emissions by 2020 in the heat market.

 

However, the measures carried out to date in the heat market are far from being sufficient to achieve the CO2 savings target of annually 93 million tons of CO2 by 2020 set by the Government.

 

This goal can only be reached by integrating existing buildings and doubling the modernization rate of heating systems. Natural gas system solutions, such as the natural gas high-efficiency boiler technology, play a key role in this respect. They are a driver for rapid, efficient and affordable CO2 reductions and efficiency increase of existing buildings. Gas-based heating technologies offer the lowest CO2 avoidance cost and thus represent an efficient form of climate protection.

 

Natural gas plays an important role in the heat market.

This is shown by some recent figures: According to preliminary calculations, natural gas will continue to be market leader during the first six months of 2011 with a share of 50 percent in heating systems installed in new-build homes (Source: Statistical Offices of the German Laender). 70 percent of all heat generators sold in Germany during the past ten years were natural gas heaters (Source: Federal Industrial Association of Germany – House, Energy and Environmental Technology).

 

The exchange of all heating systems in need of modernization by sophisticated natural gas heating systems could lead to a CO2 reduction of approximately 93 million tons per year. This would correspond to the quantity of CO2 savings aimed at by the „Integrated energy and climate programme“ (IEKP).

 

In order to enable the potential of natural gas to be fully tapped, it is however necessary to remove some impediments.

 

We are for instance far from achieving the tasks set by the Federal Government in terms of the development of bio natural gas quantities. Bio natural gas is almost CO2 neutral and very well suited for being used in heat supply, decentralised electricity generation and as bio fuel in natural gas vehicles. For instance, bio natural gas can be immediately used in existing natural gas heating systems. Retro-fitting of the heating installation or additional investments are not required. Bio natural gas contributes to further reducing the already low CO2 emissions of state-of-the-art natural gas application technologies.

 

As stipulated in the IEKP, bio natural gas sales in Germany shall amount to about six to ten billion cubic metres by the year 2020. According to forecasts, a total of 98 biogas plants with a feed-in volume of almost 515 million cubic metres will be connected to the network in 2011, and in 2012 their number will amount to 107 plants with a feed-in volume of 590 cubic metres (Source: German Energy Agency, BDEW calculations). In the light of the present pace of development, it is not likely that the government’s bio natural gas target can be achieved.

 

To enable more bio natural gas to be fed into the grid, obstacles must be removed which have restricted the demand for this renewable energy source. The regulatory framework governing the use of bio natural gas needs to be optimised with a view to successfully developing the bio natural gas market in a sustainable manner:

 

The lever available for this purpose is the Renewable Energy Sources Heat Law (EEWärmeG). According to this Law, bio natural gas may currently be used only in conjunction with the combined generation of heat and power (CHP) and with a heat generation share of 30 percent as heating energy in new-builds, whereas its use in high-efficiency boilers is excluded. This Law clearly discriminates bio natural gas against other primary energies.

 

We therefore advocate that the use of natural gas in conjunction with bio natural gas be accepted as a clear discharge of the obligation to use renewables within the meaning of the EEWärmeG. In addition, the necessary amendment of the EEWärmeG for private buildings must also include existing buildings in conjunction with a mandatory use of renewables. The inclusion of existing buildings into the provisions of the EEWärmeG makes an essential contribution to efficiency increase. In this context, it is essential to adopt an approach that does not give preference to certain technologies, and to ensure the equivalence of bio natural gas to meet the requirements of the EEWärmeG.

 

If we do not address this issue, and I would like to make this very clear, the climate protection targets for the heat market cannot be reached in time and will imply very high costs.

 

Ladies and Gentlemen,

It is quite certain that natural gas is an ideal partner for renewable energies. Whether in electricity production, electricity storage, with innovative applications in the heat market or in the transport sector – natural gas will continue play an important role in future.

 

To put it in a nutshell: Natural gas is an indispensable part of the solution on the way to a CO2 neutral age.

 

I thank you very much for your attention.