By Victor Uchechukwu
Natural gas will play a vital role in the energy transition, supporting the expansion of renewables and accelerating the shift away from coal, says Wood Mackenzie in its latest report titled, “The Bridge: Natural Gas’s Crucial Role as a Transitional Energy Source.” It further notes that while the world is increasingly turning to renewable energy, the fundamental role natural gas is expected to play in meeting global energy needs and reducing emissions in the medium term cannot be overemphasized.
“Gas demand has surged by 80% over the past 25 years, now meeting almost a quarter of the world’s energy needs,” Massimo Di Odoardo, Vice President of Gas and LNG Research at Woods has said. “Its success lies” Massimo said, “in the scale of global resources, low production costs, ease of storage and dispatch, and comparative environmental advantages.”
Surging electrification, increasingly delivered by renewable power sources, in the opinion of the Woodmac analytical team, would lead the charge to curb CO2 emissions. Even though electrification can move so fast says Woods, the adoption of emerging low-carbon technologies, such as hydrogen, currently does not seem to move as fast as it to be able to achieve net-zero emissions by 2050. Meanwhile coal which in Woodmac’s view is still accounting for 30% of the world’s energy needs, shifting to gas as a transition fuel therefore seems a compelling option at the moment.
Key findings from the report include the fact that gas produces only half the carbon dioxide of coal and 70% of oil when burned, and generates considerably less pollution, making it the cleanest fossil fuel option.
Fact number two is the need to quickly replace coal with natural gas as the later seems to have contributed enormously already in delivering a substantial volume of CO2 reduction, while helping potentially in the decarbonization of the hitherto coal-dependent markets’ spaces across the Asian continent.
Gas-fired plants are also key, for they provide, Woods contends, reliable and flexible supply supporting the integration of intermittent renewable energy sources.
Natural gas therefore can act as a catalyst for advancing other lower-carbon technologies, including carbon capture and storage (CCS) and low-carbon hydrogen.
The report however highlights challenges facing the gas industry to include, high LNG prices which has been, since 2022 unfortunately, a risk factor undermining the full potential of wider gas adoption in Asia. “Carbon prices therefore would be needed to shift the market, says Woods.
“In China and India, where gas usage is mainly used for peak shaving, gas demand is still expected to grow by almost 100 bcm through to 2050 in the power sector, offering the most practical option for ensuring flexibility as renewable investments surge,” says Di Odoardo. “Without a carbon price of around US$100/tonne, reducing China’s and India’s dependency on baseload coal looks like a massive ask. But the prize could be a reduction of more than 300 Mt of CO2 by 2035.”
Emissions are not excluded. Gas and LNG both produce substantial greenhouse gas (GHG). However, according to the report, claims that the LNG value chain is more GHG-intensive than coal is unfounded.
“Our analysis shows that, on average, LNG has around 60% lower GHG intensity than coal. Even when considering a 20-year global warming potential (GWP) and comparing methane-intensive LNG with coal burnt in highly efficient plants, LNG is still 26% less GHG-intensive,” Di Odoardo said. “Nevertheless, its carbon dioxide and methane emissions need to be addressed as a matter of urgency to ensure its primacy as a bridging fuel.”
The report also, in peroration, presents that natural gas, particularly LNG, will be critical in the shift to a lower-carbon future, bridging the gap as emerging low-carbon technologies strive to reach critical mass.