STUDY | Ensuring Resilience in the European Energy Transition: Strategic Use of Gases to Meet EU Climate Ambitions
The success of Europe’s energy transition depends on balancing affordability, security, and sustainability.
Natural gas, renewable and low-carbon gases are uniquely positioned to deliver this, and help ensure Europe has an energy system fit to support its competitiveness.
We need to act now to deliver these essential gases on time.
Eurogas has commissioned a study from Frontier Economics on the role of gaseous fuels in the energy transition.
This report finds that gases can support the energy system’s:
• Affordability: Gases enable a cost-efficient energy transition process, including by repurposing existing infrastructure. Long-term, gases can help to lower energy prices for industry and consumers: increased availability of renewable gases is projected to lower average electricity prices by between 5 and 21%. In 2030 and 2040, hydrogen prices could be nearly 30% lower with greater availability of
gases.
• Security: Gas and hydrogen fired power plants are crucial for maintaining energy security, especially as the share of intermittent renewable electricity and the electrification of final demand increases.
• Sustainability: Gases are a key enabler for the EU to meet its decarbonisation objectives. Even in high electrification scenarios, gases continue to play a major role in final energy demand in 2050: the share of gases in final demand still increases and hydrogen and its derivatives emerge as the second largest energy carrier.
Based on the report, Eurogas makes the following recommendations to EU leaders:
• Maximize the potential of Biomethane, a "must-have" option to serve remaining methane demand. It is also the most viable and cost-effective option
to deliver necessary negative emissions.
• Build a value chain for hydrogen and its derivatives, to enable them as a key energy carrier in the long-term. Our projections show that green hydrogen starts to exponentially grow only after 2040, once existing renewable energy targets have been met. Until then, low-carbon hydrogen is essential to scale the hydrogen value chain.
• Enable Carbon Capture and Storage (CCS). This is not optional: it’s a necessity for achieving sustainability and energy security objectives in Europe. CCS can uniquely support the decarbonisation of methane and hydrogen demand, and enable cost-effective negative emissions, when combined with biomethane.
• Repurpose existing gas infrastructure for renewable and low carbon gases. Gas and hydrogen infrastructure remains a backbone of the European energy system. This role becomes even more important in case real world developments deviate from desired transition pathways.
• Leverage domestic natural gas and biomethane resources, as recommended by REPowerEU and the Draghi Report. This improves the security of supply by lowering dependence on imports, affordability by reducing exposure to geopolitical risks, and sustainability by lowering the lifecycle emissions.
Read the full study attached.
