Green gases are taking off: slowly but surely low-carbon gases are making inroads to the gas system.
In contrast with natural gas, which dropped by a record in 2020, biomethane continued to grow strongly, up by 18%, largely driven by the US and northwest Europe, with Denmark and France taking the lead. Based on projects under development, biomethane could double by 2024 up to 10 bcm, whilst additional policy support could get us to over 25 bcm.
Low-carbon hydrogen grid injections are set to expand by more than tenfold by 2024 based on projects under development and could be boosted by a factor of 60 if all planned projects go ahead. The right policies and fiscal incentives will be key for this faster trajectory.
Meanwhile, synthetic methane is struggling to take-off, with only a limited number of projects being currently under development. While perfectly interchangeable with natural gas, it will require a separate carbon infrastructure making it the most costly low-carbon gas (~80/mmbtu).
At the same time, synthetic methane could play a key role in the future in integrating methane and hydrogen grids, providing greater system flexibility and facilitate trading.
Needless to say, the current state of green gases is far away from our Net Zero scenario, which foresees 240 bcm of biomethane, 520 Mt low-carbon hydrogen and over 100 bcm of synthetic methane by 2050. So, there is clearly some homework to do!
What is your view? How will low-carbon gases evolve in the medium-term? What are the main challenges ahead?
Source: Greg Molnar
See original post by Greg at LinkedIn.