Gas traditionally hasn’t been as widely available as electricity as an energy source, but the potential of power to gas from renewables, the growing use of biogas and the availability of natural gas from fracking are fast changing this scenario.
From Europe, which has the most comprehensive regional gas network, to the United States, which is leading so called “unconventional gas,” and Asia, which accounted for almost half of the rise in global natural gas demand in 2014, according to the newly released World Energy Outlook 2015, activities are ramping up to join the wave of these developments and to integrate these new supplies into the energy mix.
“We are entering a golden age for gas with a lot of developments taking place, but gas tends not to be appealing and deserves more attention,” says Andre Wankelmuth, Director of Market Development for Gas Global at Itron.
Gas in the energy mix
Gas offers great potential because it is clean, can be stored and is renewable.
“Biogas generated from waste can support smart cities to become more energy self-sufficient and at the same time solve the waste problem of future megacities. Hydrogen created from renewable generation, such as solar and wind, can be used to balance the renewable intermittencies, and can be injected as is into the gas grid to supplement supplies. It can also be combined with carbon to create methane for use in gas-fired plants or natural gas vehicles,” says Mr Wankelmuth.
In Europe, heating, usually from gas or oil, accounts for around 70% of the typical energy bill and therefore gas needs more focus in energy efficiency measures. In many ways, gas also can be alternative to electricity, much cleaner, cheaper and more environmental-friendly.
Gas utility challenges
With such a growing role of gas there is clearly a convergence of electricity and gas grids into a combined smart energy grid, which in turn is bringing new challenges to utilities and regulators.
“In Germany, for example, the situation is that the renewables are predominantly in the north but the main consumption is in the south, so some grid operators are assessing whether it is more cost effective to build new electricity transmission lines or to convert the renewables to gas for injection into a pipeline to re-burn in the south,” says Mr Wankelmuth. “Evidence is emerging that gas can be cost effective in this and other situations such as storage.”
Smart gas metering business case
He mentions a key challenge in Europe pertains to gas smart metering, with countries required to roll out smart metering if found cost effective to do so. While in most countries a business case has been found for smart electric metering, in only a handful it has been for gas, including the UK, Netherlands, France and Italy.
“As gas can be stored there aren’t peak shaving issues and people need to heat on cold days or to cook when hungry so its use can’t be incentivized via tariffs like electricity. Further in Europe, the investment would come from the grid operator but the value proposition is mainly on the retail side, however, these are unbundled and allocation of investments is not catered for.”
As a result the business cases have tended to be based on utility operational efficiencies, says Mr Wankelmuth, stating Itron’s view is that a broader view should be taken of the utility challenges, including managing and rightsizing the assets, revenue protection and becoming more customer centric with new business models.
“Pipeline sizings are based on the principles and end user consumption patterns of the 1980s but these have changed dramatically since then. New more efficient boilers have been introduced and there have been cultural changes such as lifestyle and a trend toward smaller families. When we look at all these issues then often there is a business case for smart gas metering,” he says. He adds that the correct solution also has to be taken into consideration as each is tailored to effectively address specific challenges, whether walk-by, prepay, cellular or network-based (from Itron’s portfolio) or another.
Examples of newly positively assessed business cases found on this basis by Itron are in Turkey and other countries in Eastern Europe, as well as in Spain, India and Brazil.
Gas Internet of Things
Like their electric counterparts gas utilities are also facing an increasingly decentralized future with small-scale biogas and combined heat and power (CHP), bringing new challenges to managing the grid.
“While grid operators have SCADA for management of the upstream transmission grid, they are more or less blind downstream,” says Mr Wankelmuth, pointing out that with decentralization the challenges will increase with for example, different gas qualities to be managed.
These and other drivers – for example in the UK and elsewhere over-pressured pipes and in the US ageing infrastructure – are giving rise to the development of telemetry sensors for applications such as active pressure management, cathodic protection, methane leak detection, gas quality monitoring and water level detection – in short to the components of a gas Internet of Things.
“These will allow better understanding of flows and consumption patterns and better management of the grid assets,” says Mr Wankelmuth. “The UK has started to introduce grid pressure management with Ofgem leading the regulatory push and it is being piloted in the Netherlands, Belgium, France and Spain and we expect to see it elsewhere. A lower pressure leads to lower losses and while these are typically small, 0.5-2%, this is still substantial when making a business case.”
“On the other hand in the US there is strong interest in methane leak detection, due to potential for storm damage.”
All of these devices are under development by Itron starting with cathodic protection and methane detection led by the US market and will integrate with Itron’s OpenWay® Riva™ platform, with the first integrations of electric and gas communications on the same platform expected to take place in the US next year. [Engerati-Intelligence Coming To The Grid Edge]
A regulatory push for gas
The consensus view is that the push for gas developments must come through regulation, such as has the development of smart gas metering in Europe.
“The industry needs a push and we expect this to come at the COP21 meeting in Paris with subsequent regulation evolving to support the development of gas as a key source in the energy transition.”
For utilities, such developments will support an improving business case for gas, with increased efficiencies and reduced costs, all ultimately spinning down to the consumer.