Senior Strategy Partner
10:20 - 10:45
Wednesday, 18 September 2019
S2.3 The Role of Gas in the Energy Transition
The contribution that gas will make to the global energy mix will depend on a great number of geographical, economic and commercial factors, as well as regional energy/climate change policies. Most in the gas industry expect gas to sit neatly alongside renewables as the ideal lower carbon combination to address the world’s increasing energy needs and climate goals. Some companies however, may face challenges in their ability to fully commercialise their gas portfolio. This paper will discuss the many positives for the gas industry (including how gas can help firm-up intermittent renewables), but also highlight the impact of specific geographical, economic, and political challenges that will determine the role gas will ultimately play in the energy transition.
The paper will provide an overview of the energy/climate policy for key countries; US, China, India, Germany and UK, and assess the impact that these policies has had on the demand for, and supply of, gas locally to date. A view on the impact of current/expected policies on the gas industry going forward will be provided.
Using the IEA NPS (“New Policies Scenario”), SDS (“Sustainable Development Scenario”), and the B2DS (“Beyond 2 Degrees Scenario”) as a basis, the paper will provide a comparison of gas to competitive fuel sources (coal and renewables). Building on the work above, the analysis will consider the demand/supply dynamics for different regions, including the differences between developed and developing nations. The importance of existing and developing technologies such as CCS will also be considered.
Recommendations will be made to the gas industry to ensure it properly fulfils its role alongside renewables in a decarbonised economy. These will include details for; the need for sophisticated public policy efforts to influence regulation/policy; the need for genuine cost competitiveness versus all other fuels; a revised approach to LNG contracting and financing; and the need to be able to generate downstream demand through having an integrated gas strategy linking supply to ultimate customer. Finally, the paper will make recommendations for increased transparency for the gas industry in order to demonstrate portfolio robustness under the NPS, SDS, and the B2DS, to assist governments to deliver sensible and sound energy policies, and such that investors, insurers and other stakeholders can make informed decisions.