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29
Dec
2016

Natural gas and renewable energies, driving the worldwide energy transition

In 25 years’ time, demand for coal in many countries should have dropped considerably in favor of natural gas and renewable energies. This forecast comes in the International Energy Agency’s latest annual report, World Energy Outlook*, published in November 2016.

A new global energy mix is taking shape. Natural gas will supplement a range of means of production of renewable energy, which will be deployed very widely.

Rapid growth in natural gas and renewable energies

According to the scenario described in the annual report of the International Energy Agency (IEA), by 2040 natural gas and wind and solar power will largely take over from the champion of the previous 25 years: coal. Demand for coal is expected to decrease by 60% in Europe, 40% in the United States, and 15% in China! As for oil, although its days are far from over, its market share will also decline.

By 2040, no less than 60% of the new electricity production capacity at a global level will be provided by renewable sources, specifically wind and photovoltaic. Most of this production will be competitive and will not require subsidies, according to the report.

Meanwhile, natural gas will go on making up ground, particularly in China and the Middle East, in a context of a growing demand for energy and of the replacement of declining production. With combustion that is up to 50% less polluting than coal and heavy fuel oil, natural gas is an ideal choice for the transition toward more environmentally-friendly energy production.

Demand for gas driven by electricity production and mobility

In a recent study, the French Gas Association estimated that total gas consumption in France will be 560 terawatt-hours (TWh) in 2030, compared to 461 TWh in 2015. This increase is explained in the first place by greater use of centralized electricity production, to offset a lower proportion of nuclear energy, and to the development of renewable energies. The second growth driver for the gas sector in the development of natural gas-powered mobility. Demand for natural gas for land and sea transport should grow, driving a gradual rollout of compressed natural gas (CNG) and liquefied natural gas (LNG).

ENGIE’s commitment to the energy revolution

ENGIE is in no doubt that the energy sector is in the throes of a full-scale revolution. With a worldwide portfolio consisting of 18% renewable energies, ENGIE concentrates its investments on developing low-carbon energy and integrated, innovative solutions.

To put this commitment into practice, the Group took the decision in October 2015 not to construct any more coal-fired power stations. Half of its electricity projects today involve energies which emit practically no CO2 (solar, wind, hydroelectricity, etc.).

ENGIE is also counting on the potential of gas to complement renewable energies, a source of energy that can mitigate get round the intermittent nature of renewables. The Group is also developing solutions that will make gas an increasingly renewable energy. With 25 production facilities hooked up to the French network, biomethane, for instance, is the principal source of green gas. Power to Gas offers promising prospects for storing energy in the form of gas.

* World Energy Outlook, International Energy Agency, November 2016.

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