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The Enervis study „Renewable Gases – a System Update for the Energy Transition” outlines the way towards a carbon-neutral energy system in 2050. It shows that green gases are an indispensable part of the energy transition – for technical as well as economical reasons.Download Management Summary
The renewable energy system that we intend to achieve within the next centuries needs to be functional even if there is no sun and wind at times. That means next to the electricity consumption from wind and solar power, there will be a significant energy demand outside the field of such volatile energies. That demand is called residual load.
Moreover, the energy system will still be structured by seasonal consumption. That means even in the future the energy consumption will be different depending on the time of the year. This holds especially true for the heating sector which is defined by a significant energy demand in winter months. To shift energy loads from the summer in which we will produce more electricity from wind and solar power to the winter, the energy system needs a long-term storage solution. This task cannot be fulfilled by the known electricity storage technologies; however, it can be fulfilled by gas storage.
As a source of flexibility gas storage will play an important role in the future energy system as it is able to store renewable energy as gas. Via the Power-to-Gas technology renewable electricity is transformed into hydrogen or synthetic methane. For that reason, we also call them renewable gases. Many studies have shown that the energy system will only reach carbon-neutrality by 2050 if it makes significant use of renewable gases.
Enervis Energy Advisors, a consulting company specialized on the energy field, has investigated the future use of renewable gases. The study “Renewable Gases – a System Update for the Energy Transition” therefore looks at the energy system in Germany in 2050.
The study was mandated by INES. The German gas storage association wanted to have a reliable source of information on how renewable energies in the form of gas need to be used in a fully carbon-neutral energy system. For this reason, many different perspectives were put together in this investigation. Next to a cooperation between the German Wind Energy Association (BWE), a political advisory board comprising representatives from the German Christian Democrats, the Social Democrats and the Ministry of Economic Affairs of Lower Saxony brought this idea to life. The study results are therefore not only relevant for INES members but also for the public.Download Summary of Enervis Study
The German energy system 2050 investigated by Enervis is characterized by a sustainable and environmentally friendly energy supply, whereby a greenhouse gas-neutral society should be achieved as economically as possible.
To this end, the study examines the development of energy supply, energy use and energy conversion. The focus is on the question in which areas and to what extent the use of renewable gases is both technically necessary and economically beneficial. By renewable gases, this study means both biomethane and synthetic gas produced from renewable electricity, i.e. hydrogen and synthetic methane.
For the year 2050, the study considers two target scenarios that achieve the desired climate protection goal of a greenhouse gas-neutral society on different paths. The Maximum Electrification scenario reflects policy considerations to align the entire energy market in Germany with the electricity market and electrify all sectors as much as possible.
By contrast, the Optimized System Scenario is open towards all technologies with regard to achieving greenhouse gas neutrality, and other energy sources in the retail sector were also looked at.
The authors use sources for more than 90 percent of greenhouse gas emissions in Germany. This includes the consumption sectors heat, transport, electricity and feedstock, which essentially means the industry. However, greenhouse gas emissions from agriculture were not the subject of the analyzes. This sector accounts for about 8 percent of German greenhouse gas emissions.
An examination of the feedstock, i.e. the industrial or material use of energy sources in industry, shows that this sector can only achieve the climate protection targets with synthetically produced hydrocarbon chains. A direct comparison of power-to-liquid and power-to-gas technologies shows that the most cost-effective option is to use renewable gases. In an energy system that will become carbon-neutral in 2050, therefore, irrespective of the scenario under consideration, around 280 terawatt-hours of renewable gases are needed for the industry.
The transport sector shows an ambiguous picture. If so-called soft factors such as the range of vehicles or the duration of a charging process are disregarded, then the decarbonization of individual passenger car traffic takes place based on electric vehicles. However, in particular aviation has to use renewable energies that have been previously converted into liquids using Power-to-Liquid. The use of renewable electricity is technically simply not possible.
In the area of shipping, electrification is also impossible, but here, in contrast to aviation, renewable gases can come into play. This will give this transport sector a more cost-effective way to achieve the climate protection goals than with Power-to-Liquid. For this reason, the entire transport sector will also use about 140 terawatt hours of green gases in 2050, in addition to renewable electricity and liquids.
The decarbonization of transport and industry will therefore depend on renewable gases, as technical obstacles make the direct use of electricity impossible. However, for these sectors to decarbonize at reasonable economic costs, renewable gases need to be cheaper. This requires political action.
In 2050, the heating market will account for almost half of Germany’s energy consumption. For a decarbonization of consumption, technologies to replace existing heating systems that use fossil fuels with electricity-based systems are generally available. Here, in addition to electric heaters, especially heat pumps are used. However, the study shows that a maximum electrification of the heating market is inefficient.
In order to optimize the system and thus reduce the economic costs, Germany should use almost 400 terawatt hours of renewable gases in the heating market by the middle of the century. With the use of gas-based heating systems instead of electricity-based heating systems, it will be possible to save around 70 billion euros for the final consumer in the Optimized System scenario in the period from 2017 to 2050.
Looking at the overall energy system, it can be seen that the battery storage capacity installed in 2050, which is required to provide flexibility for the power-based systems, is 150 gigawatt lower in the Optimized System scenario. The use of gas-based heating systems will subsequently lead to a cost advantage of more than € 80 billion by 2050. In addition, the number of back-up gas power plants needed to bridge times of no sun and wind also reduces significantly, because high heat consumption in winter is not covered by the electricity market. Instead of more than 110 gigawatts, only about 50 gigawatts of installed gas-fired power capacity is required. This leads to a further cost advantage of almost 100 billion euros by 2050.
These savings are made possible above all because flexibility requirements of the energy system are being transferred from the electricity sector to the gas sector through renewable gases. In the gas sector, the extensive flexibility of gas storage meets the storage requirements.
The biggest cost advantage of an path to greenhouse gas neutrality that is open to all technologies, however, is a reduced expansion of the electricity transmission network. If electricity-based heating systems are used instead of gas-based heating systems, the required power grid expansion triples at the transport level. This huge increase is because seasonal peaks in the winter are then transported through the electricity grid. The use of gas storage and gas networks for the transport of renewable gases, however, avoids this expansion, thus generating a cost advantage of around € 160 billion by 2050. Moreover, the use of existing gas infrastructures is expected to generate significant savings at the level of the electricity distribution networks, although this area was not covered by the scope of the Enervis investigation.
The study has thus shown that the use of gas infrastructures can bring significant economic cost advantages. The use of renewable gases in the heating market is therefore appropriate for the system and makes economic sense. However, for the economic optimum to develop, especially with regard to the future energy grid (for electricity and gas), the system of network charges of electricity and gas must be coupled. Ultimately, it must be worthwhile for a power-to-gas plant to relieve the power grid from loads.
To enable a macroeconomic comparison of the total costs of the scenarios studied, the Enervis study also examines the costs of power generation and energy conversion. The analyzes show that in the Optimized System scenario around 2,170 terawatt hours of renewable electricity will have to be produced in 2050 in order to achieve the climate protection target. In the area of onshore wind installations as well as in the area of photovoltaic open spaces, around 2 percent of the country’s land is used for the installation of renewable generation capacities.
The production of renewable electricity is only 13 percent (247 terawatt hours) higher than in a decarbonization strategy that relies on maximum electrification. The higher value for electricity production results from conversion losses that arise when using power-to-gas. The increased use of photovoltaic open-space capacities and the necessary construction of additional power-to-gas plants to generate the necessary renewable gases will result in additional costs for the Optimized System scenario of around 410 billion euros.
In sum, across all considered segments Germany achieves the goal of greenhouse gas neutrality more effectively in 2050 by means of a technology path increasingly based on the use of renewable gases than with maximum electrification. The cost advantage amounts to a total of 19 billion euros by 2050.
The renewable energy system of the future will be characterized by considerable residual loads and seasonal consumption patterns. In order to shift the required amount of energy from summer months into winter, gas storage as a renewable source of flexibility will play an important role in the energy system of the future. Even in a maximally electrified energy system, for technological reasons, renewable gases amounting to more than 200 terawatt hours are shifted between the seasons.
However, when it comes to the storage of renewable energies, politicians must ensure that equal opportunities are ensured between electricity and gas storage facilities. We are still a long way from that. Above all, the system of levies and charges must be further developed for this purpose.
Against the background of the areas of application analyzed, it should be noted that the energy system will only become greenhouse gas-neutral in 2050 if renewable gases are used to a significant extent (Optimized System: around 930 terawatt hours). Renewable gases are therefore a necessary system update for the energy transition.
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