Executive summary: The future for gas networks is uncertain and contested, mainly due to the carbon dioxide (CO2 ) and methane emissions associated with natural gas systems. Gas networks are used in many countries to deliver natural gas to industrial, commercial and domestic consumers, supplying energy for a range of services, including space heating, water heating and cooking. Existing gas networks are extensive, with an estimated 2.8 million kilometres of gas transport pipelines globally. Low pressure gas networks deliver a significant amount of energy annually to commercial and domestic consumers (8,158 terawatt-hours globally) with a large proportion of this used for heating in buildings. However, unabated natural gas use in the domestic and commercial sectors is unlikely to be compatible with climate change goals. The carbon emissions created by burning natural gas in modern gas boilers is in the range of 230 to 318 gCO2 eq/kWh heat, including supply chain methane emissions.1 The carbon dioxide and methane emitted by natural gas systems and the difficulty in capturing emissions at domestic, commercial, and many industrial end-uses, is a problem for global carbon reduction ambitions. Country-level scenarios show a reduced role for gas networks in the future, often preferring electricity and heat pumps to decarbonise domestic and commercial energy services. However, there are significant technical, economic and consumer barriers to electrifying heat, which have made widespread uptake of electric heat challenging. Given these concerns there is a growing argument that decarbonised gas networks could play a significant role in the future energy system and contribute significantly to decarbonisation. The aim of this white paper is to review the evidence on options for the future use of gas networks, including the use of biomethane and hydrogen, focusing on their technical potential, carbon intensity and costs. While much of the evidence is from a small number of countries, implications for other countries are explored. The study examines how these options compare to each other and to the electrification of heat via heat pumps.
Synthesis method: Qualitative
Conclusions: 1. Gas networks have the potential to play an important role in decarbonising the future energy system and therefore should not be discounted in energy scenarios. 2. The storage potential of low carbon gas offers a significant advantage over electricity networks, providing relatively low cost flexibility, particularly for seasonal fluctuations in energy demand. 3. The options for producing decarbonised gas have a range of different positive characteristics, but there is no ‘best option’. 4. The range of CO2 emissions estimates for the different methods to produce low carbon gas is extremely large; -371 to 642 gCO2eq/kWh for hydrogen (Figure ES1), and -50 to 450 gCO2eq/kWh for biomethane. 5. The cost estimates for different decarbonised gas options vary significantly. The retail price achievable based on these costs might be 4.4 to 13.6 p/kWh (average 8.1 p/kWh) for biomethane compared to a hydrogen price estimate of 4.9 to 18.4 p/kWh (average 9.3 p/kWh). 6. Countries with mature gas networks such as the Netherlands, the UK and the USA may find gas network decarbonisation options attractive given the value of their existing assets. 7. There is limited real-world evidence on the capability of low pressure gas networks to transport 100% hydrogen gas streams effectively. Improving our understanding in this area will be key to making future investment decisions. 8. Key considerations for policy include: Setting gas decarbonisation standards, Developing consumer awareness approaches for network conversion, Advancing the evidence base and standards around hydrogen safety. 9. There are a number of opportunities for future research. These include the development of practical demonstration projects, and new wholesystem modelling research that incorporates evidence from practical experience and quantifies the system-wide impacts.
Screening criteria: This comprehensive review of academic, industrial and governmental literature has drawn on the methodology created by the UK Energy Research Centre (UKERC) Technology and Policy Assessment (TPA) theme and refined by the Sustainable Gas Institute for the White Paper Series.
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Funding source: The Sustainable Gas Institute was founded in partnership with BG Group. In February 2016, BG Group became part of Royal Dutch Shell.