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The exterior of the Centrale Drogenbos natural gas power plant and its lighting cooling tower in Drogenbos near Brussels, Belgium, September 24, 2018. Belgium is phasing out nuclear energy and therefore relies on its natural gas power plants. [EPA-EFE/STEPHANIE LECOCQ]
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Julian Popov wrote that instead of promoting natural gas as a "transition fuel," it is better to describe it as the last fuel, but it is important to note that it is not the only fuel: other technologies are balancing the power system.
Julian Popov is a researcher at the European Climate Foundation, chairman of the European Institute of Building Performance, and former Bulgarian Minister of Environment and Water.
Natural gas is widely referred to as transition fuel or bridge fuel. The idea is that on the road from coal to renewable energy, we need to pass natural gas, which emits only half of the carbon dioxide emissions when burned. However, if we look at countries that have significantly reduced coal in terms of power generation, we will find that coal has not been replaced by natural gas, nor is it a transitional fuel. Countries reduce coal, but the consumption of natural gas has not increased but remained unchanged or even declined.
The United Kingdom is a notable example. In 2012, coal power generation reached a peak of 40%. Today, coal generates less than 3% of British electricity and is expected to be completely phased out in 2024. In the past 20 years, natural gas demand has remained flat. In addition, both natural gas and nuclear energy have shown signs of relative decline in the past five years.
Germany is a unique example because it promises to shut down nuclear power by the end of 2022. In the past ten years, its coal-fired power generation has been reduced by 44%, and nuclear power generation has been reduced by 49%. In this sharp decline, natural gas production increased by only 13% (or absolute change of 1.9 percentage points).
Denmark, Spain, Italy, Slovenia, Hungary and other European countries have similar trends, but there are some temporary and seasonal changes. In most cases, although the underutilized natural gas power generation capacity can be turned on through a push-button switch, natural gas demand remains flat or declining.
Between 2010 and 2020, coal power generation in the European Union (including the United Kingdom) fell by half. Natural gas has not replaced the lost coal power generation; on the contrary, it has dropped slightly by 7%. This trend is also evident globally-in the past 10 years, coal power generation has fallen from 40% to 34%, while the share of natural gas power generation has remained at around 22%. There are national exceptions to this rule, but this has not changed the overall trend.
The reality is that natural gas cannot replace coal. So far, coal has been mainly replaced by renewable energy and energy efficiency in power generation.
The other two major natural gas consuming sectors, construction and industry, are also unlikely to support the idea of using natural gas as a transition fuel. In these two areas, the trend is to stay away from natural gas. Countries with high levels of domestic heating, such as the Netherlands, Denmark, and Austria, are introducing policies to reduce heating gas and replace them with heat pumps, high-efficiency solarization and renewable energy. The industry is also paying more and more attention to hydrogen.
The expectation that natural gas will become a transition fuel for transportation has not been realized. Battery-powered cars have won the competition for passenger cars, and although the jury of long-distance buses and freight is still out, the verdict is unlikely to favor gasoline.
It is worth noting that the trend of natural gas not replacing coal occurred in a period when the price of natural gas was low, and the cost of renewable energy, especially batteries, remained high. With the sharp decline in the cost of renewable energy and batteries and the soaring price of natural gas, natural gas is likely to follow the sharp decline in coal. If we add the higher carbon emission reduction targets of the European Green Agreement, we can be sure that natural gas has missed the boat of the energy transition both metaphorically and literally.
This does not mean that gas has no role in the energy transition. However, this role is not a transitional fuel and can be better described as the final fuel-when there is a gap in energy efficiency, renewable energy, storage, and demand-side response, the gap may be filled by natural gas. After all, natural gas is still the fuel that balances intermittent renewable energy generation, although we cannot exaggerate its role. A large number of technologies are entering the equilibrium position of the power system.
Batteries are just one of them, but many others are market integration, cross-border grid connections, digitization of energy systems, and long-distance high-voltage DC cables. Natural gas is increasingly becoming a niche rather than mainstream technology. Niches may be essential and many, but they will still be niches.
Someone might say that the statement that natural gas is a transition fuel is just a public relations slogan for the industry, just a phrase, part of a complex debate, and nothing more than a language issue.
Well, language is very important. The controversial EU classification of sustainable activities is the main language. It is about calling things sustainable or unsustainable, not a set of strict prohibitions and penalties. Nevertheless, the war on this "language" is still fierce, and the fight for natural gas as a green fuel is fierce.
Labeling natural gas as a transition fuel, or the more subtle bureaucratic term "transition activity", is the main argument for including natural gas as a green fuel in the taxonomy. This kind of branding will affect many investment decisions, public policies and expenditures.
"Natural gas is a transitional fuel" is the main reason for allowing countries to build natural gas power plants in accordance with the so-called DNSH (Do Not Cause Major Harm) principle. In assessing the eligibility of gas-fired power plants to replace coal power generation capacity, the European Commission requires that newly built natural gas power generation capacity should “result in the simultaneous closure of more carbon-intensive power plants and/or thermal power generation facilities (such as coal, lignite, or petroleum) with at least Same capacity".
In other words, if a country shuts down 1GW of coal, if it builds 1GW of natural gas power generation, it will not cause major damage.
Judging from the current trend that natural gas does not replace coal, the rule only means that the European Community is actively promoting countries to build unnecessary natural gas production capacity and providing financial support for this.
Applied to natural gas, the DNSH principle will mainly cause damage to Central and Eastern European countries that are not prepared to run natural gas power generation capacity, and it is necessary to invest in new power plants to "do not do so to cause such significant damage." This very expensive irony will only widen the technological gap between the East and the West. In a few years, we will see how the Green Agreement is more environmentally friendly to the West, but not so environmentally friendly and not so profitable for the East.
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