Renewable energy may be grabbing ever increasing chunks of the world’s electricity supply as the push towards zero emissions continues but as data from GlobalData indicates, natural gas will still remain a significant part of the energy mix.
The data analytics and consulting company noted that some 134 gigawatts of new gas-fired capacity is under construction worldwide, just a little less than the gas-fired capacity constructed over the past five years.
This figure includes Europe, so it is not all in the developing world either.
And to make it worse for the green lobby, this scale up in gas use is completely in contrast to the International Energy Agency’s Net Zero Emissions Scenario, which envisions gas demand declining by nearly 20% by 2030 and around 80% by 2050.
The amount of new construction all but ensures that gas demand will if anything increase rather than decrease as countries move to meet growing energy demand and/or provide firming support to burgeoning renewable energy generation.
While those keen on the demise of fossil fuels will argue that this is the reason why we need to increase our adoption of energy storage to firm up electrical networks and provide power when the sun isn’t shining or the wind not blowing, the reality is that we currently do not have enough battery manufacturing capacity to achieve this goal.
That leaves a gap that must be met and between the choices of a populace robbed of power – never a good look for governments, coal and gas – the most likely answer would be to compromise and pick gas.
Gas also has the advantage over coal in being able to power peaking plants that provide energy on an ad hoc basis, typically during periods of peak demand.
Transmission systems also have to be upgraded especially if we are keen to take full advantage of rooftop solar.
Driving gas supply
Of course, increasing gas demand will also drive a corresponding increase in gas supply, at least if the gas reserves and infrastructure were in place to deliver this.
This is certainly why in Australia, Woodside and Santos are so keen to get their Scarborough and Barossa gas fields on stream to supply the Pluto Train 2 and Darwin LNG projects respectively.
Doing so will ensure that said projects would continue to supply gas to their long term customers – located primarily in North Asia – for many years to come.
This will of course guarantee continue cash flow for both companies, and also the corresponding taxes and royalties to the Australian Government, which could explain Resources Minister Madeleine King using her recent visit to Japan and South Korea to assure their governments and business figures that Australia will remain a “reliable supplier” of LNG.
Both countries are likely to remain large gas consumers for some time to come and remaining in their good books as a reliable supplier will pay its dividends in the event that hydrogen really takes off as an export product in Australia and as a source of energy in those two countries.