On the 10th of May Flame and EDI organised the Gas in Transition Workshop. During an almost two hour session we discussed what the role of gas would be in the global energy transition, and more so what it role would be after the transition process would be completed?
Governmental focus is currently drawn towards the greening the electrons, which is quite understandable with the implementation of the zero-carbon objective. However, the challenge would be to green the molecules in the future as well, as probably 50% of the final energy demand in 2045 will be covered by molecules. Especially, the industrial and transport sector would faces challenges in greening their energy input, which currently cover more than 45% of the global final energy consumption.
Bert den Oude showed the value of the gas industry (upstream, midstream and downstream) in realising the general objective of realising carbon free solutions. The reuse of existing assets would not only be more environmentally friendly, but also has several financial advantages. This has been underpinned by Han Fennema, Ceo of Gasunie, who stated that gas storages are far more efficient for covering the energy gaps. To replace the current UGS Bergemeer capacity of 45 TWh, one would need about 3 billion Tesla Power Walls, or 400 batteries (Ensoc, 2017).
Killian McCarthy from University of Groningen argued that the challenge for the gas industry does not lie in the adoption of the right technology but more so in the adoption of the right strategy. Fact is that major gas industries have lost a great share of their revenue in the last 10 years. Take for instance E.On and RWE who both lost about 70% of their market value (E.On: from €92 billion to €53.5 billion; RWE: from €25.6 billion to €15.5 billion). One explanation for this tremendous loss might be the adoption of a wrong strategy. According to Killian, energy incumbents can choose from four strategies: Fight, Flight Fit or Follow.
The session has been closed with a discussion under the lead of KVGN . One of the statements was that gas ultimately will lose the battle from coal. Some great arguments have come forward and no conclusive decision to this statement could be taken.
We hope you all enjoyed the programme, and we are happy to see you back next year!
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