Your utility’s net-zero plan is full of gas
A closer look at decarbonization efforts by gas utilities reveals a vision for the future that is sustainable in name only
Analyzing corporate net-zero plans can be a frustrating exercise. Despite producing impressive marketing material with flashy language and visuals, most companies fall short where it matters most: presenting a concrete plan. Even those who do attempt to outline a path to neutrality rely too heavily on dubious carbon offsets, are vague about scope 1, 2, and 3 emissions, and lack detail on how exactly they plan to achieve net-zero.
Your local utility is also likely to have an unrealistic net-zero plan. Electric and gas utilities must play a central role in the transition to clean energy as they produce and/or distribute energy largely derived from fossil fuels. Gas utilities, in particular, deliver a fossil fuel directly into our homes in the form of natural gas.
In a way, I feel for gas utilities. Decarbonizing the energy supply is a tremendous challenge that can, in the extreme, pose an existential threat to their industry as the world weans itself off fossil gas. Nonetheless, we must demand genuine, clear, and detailed plans from these companies to give the world confidence that we are on the path to net-zero by 2050.
What are gas utilities saying about their commitments for 2050?
I reviewed the net-zero plans of several gas utilities in the US, in particular National Grid, my local electricity and gas provider. National Grid operates in the US Northeast as well as in the UK.
If you care about climate change, I encourage you to read through your own utility’s plan for net-zero. Because such plans usually lack substance, they are quick to read, and will provide insights into how your own energy supply will evolve in the coming decades.
In any case, I did my homework and yours too. Almost all US utilities I scrutinized rely on three main pillars:
Most feature great and ambitious initiatives for large-scale deployment of solar, wind, and batteries, as well as addressing methane leaks.
They propose better infrastructure to support EV charging and acknowledge the growth in electric heat pump adoption. However, gas utilities remain hesitant about high rates of electrification, describing it in terms such as “targeted”, “strategic”, or “hybrid.”
A crucial element in the plans is only implied and not explicitly stated: utilities intend to retain the extensive fossil gas network, invest in expensive upgrades, and continue providing gas to every building, with the only difference being that the gas will be “decarbonized”.
Natural gas, almost entirely methane (CH4), is a hydrocarbon. If you decarbonize methane, all that remains is pure hydrogen, which can’t simply be pumped into the existing gas network. So what does “decarbonized gas supply” really mean?
National Grid’s Clean Energy Vision centers around the replacement of natural gas with “fossil-free” gas, which is not the same as carbon-free. In fact, utilities favor the term “renewable natural gas”, presumably because it sounds more… renewable. That wording is misleading, which can be illustrated with National Grid’s own charts showing the energy sources used for heating in Massachusetts and New York.
The chart on the left shows the current breakdown. In the middle we have the incredibly challenging but needed electrified future that most of us in the space are striving for. And on the right is National Grid’s competing vision for fossil-free heat: it is a vision of a “clean” energy future where 50% of our heating needs rely on carbon-emitting gas, down from 57% today. Unfortunately, a reduction that small over the next 30 years does not amount to a genuine effort to decarbonize the energy supply.
While numbers differ for each company, the overall picture is similar for PG&E, Eversource, NextEra, Edison, Dominion, and many, many others. Rather than focus on decarbonization, it appears the strategy is to deploy investments (funded by consumers) to replace the fossil fuel supplied today with a yet-to-be-specified combination of hydrogen and biogas.
I’ve pointed out before that hydrogen, while an important climate solution in its own right, cannot be produced in sufficient quantities to replace natural gas for heating buildings.
As for biogas, I had to look it up.
What I learned about biogas and biomethane
According to the International Energy Agency (IEA),
Biogas is a mixture of methane, CO2 and small quantities of other gases produced by anaerobic digestion of organic matter in an oxygen-free environment.
Biogas is produced in biodigesters: airtight containers where bacteria break down organic material through anaerobic digestion, a process that releases methane and CO2. The gas is then captured, bottled up, and used as a fuel.
Almost any organic matter can be used as feedstock: crop residue, food waste, animal manure, and even municipal solid waste. As long as the feedstock is produced sustainably, the biogas is considered sustainable. Although burning biogas does release greenhouse gases, it does not add net new carbon to the environment.
Biogas has lower energy density than natural gas due to its lower methane content. To use biogas as an efficient fuel for heating, it needs to be further refined with an energy-intensive process to produce biomethane, which has a composition identical to natural gas.
Biomethane (also known as “renewable natural gas”) is a near-pure source of methane produced either by “upgrading” biogas (a process that removes any CO2 and other contaminants present in the biogas) or through the gasification of solid biomass followed by methanation.
By capturing emissions from waste that would otherwise be left to rot, and thus displacing natural gas extraction, biogas has earned its place in the portfolio of climate solutions.
However, should we go as far as considering it a replacement for natural gas, as utilities envision? My view is that grid-scale biogas will never be economical or desirable, for a few reasons:
The market is small and very concentrated. Today, over half of all biogas is produced in Europe, and over half of European biogas is in Germany. Even there it only has a 2% penetration in natural gas usage. The rest of the world is much further behind, with some regions not even measuring biogas production. That strikes me as an industry still in its infancy, not yet ready to underpin the global move towards net-zero.
It is expensive. Production is costly, in particular for biomethane, and not yet price-competitive with natural gas, let alone with other renewables. While solar and wind are capital intensive upfront but basically free to run, biogas is costly to operate because it is a biological process that needs constant monitoring and guidance and, unlike sunshine, the feedstock is not free.
It will not scale. As much as utilities would like to deliver biomethane to every home, there isn’t enough waste in the world to meet that kind of demand. That could lead to the cultivation of “biogas crops”, further increasing deforestation and land use for agriculture with detrimental impacts on the environment, rendering biogas an unsustainable fuel.
The role for biogas must not give fossil fuels a lifeline
Despite its disadvantages, biogas production will be an important element in reducing emissions from waste. As a standalone solution, biodigesters can be deployed as standard farming equipment or to landfills and wastewater treatment plants. Biogas can then supply local energy needs or be transported elsewhere for use in hard-to-decarbonize sectors. The IEA says it well:
Viewed through the lens of decarbonization, the optimal uses of biomethane are in end-use sectors where there are fewer low-carbon alternatives, such as high-temperature heating, petrochemical feedstocks, heavy-duty transport and maritime shipping.
Here is another reason why I take issue with utilities featuring “renewable natural gas” in their sustainability plans: the oil & gas industry has identified in biomethane an opportunity to prolong their businesses and infrastructure. Extending our dependency on methane could hurt our chances of getting climate change under control.
Utilities are typically either state owned, private regulated monopolies, or a combination of both. As stakeholders, customers, and investors in these businesses, we deserve better than a vision for biogas that relies on unsustainable energy crops and is renewable in name only. Utilities must embrace aggressive electrification as the best way forward for everyone, including themselves. Rather than a threat, decarbonization should be seen as an enormous opportunity to reorient the business models that will thrive in a clean energy future.
Expand your views
Great resources about biogas are not that easy to find, reinforcing the argument that it is a nascent industry (German speakers might have better luck.) Here are a few that I found useful:
The IEA always has great resources on all things energy. Here’s their 2020 report Outlook for biogas and biomethane
A conversation about biogas in Europe and the US with a energy and ag trading expert:
Short video about biogas in India:
And a longer one about biogas in Ireland
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