Mediaroom RSS feed Mediaroom Sat, 24 Feb 2018 18:47:25 GMT en-en Press Release: Natural gas is a strong pillar of the future global energy mix, confirms IEA World Energy Outlook 2017} Tue, 14 Nov 2017 00:00:00 GMT Brussels, 14 November 2017: GasNaturally welcomes the positive prospects for natural gas as the only fossil fuel that sees growth, outlined in the International Energy Agency’s World Energy Outlook 2017 and its Special Focus on natural gas. The Outlook proves that gas is part of the solution to address climate change and achieve a low-carbon future rapidly.  

The new edition of the World Energy Outlook sees the long-term role of gas in the global energy mix and acknowledges its opportunities in power generation, transport and heating. “The IEA’s Outlook clearly confirms that gas will be a vital fuel of choice for decades to come. Tackling climate change and improving air quality are among the most pressing environmental issues of our time. Natural gas provides a solution to both,” says GasNaturally President Marco Alverà.

In addition to the environmental benefits of switching from coal to gas in power generation, the IEA recognises the vast potential of gas to curb emissions even further. This includes carbon capture and storage technologies, as well as the enrolment of renewables-based gases such as biogas or hydrogen. “The gas industry is already significantly investing in developing innovative solutions to lower CO2 emissions and increase energy efficiency. Cutting-edge technologies such as CCS and power-to-gas have considerable potential for growth,” adds Marco Alverà

The gas industry is committed to reducing methane emissions and minimising the environmental footprint of gas use. Its initiatives have already led to considerable progress: methane emissions from natural gas operations have been nearly halved between 1990 and 2015, and they only account for 5% of EU methane emissions now, or 0.6% of overall EU GHG emissions[1]. Our aim as GasNaturally is to make gas an even better option for the environment by tackling the methane emissions issue head-on,” states Marco Alverà.

The IEA’s World Energy Outlook sees gas establishing itself as a strong pillar in the global energy mix, thanks to its flexibility and lower carbon emissions. The IEA also confirms the high potential of gas to improve urban air quality and thus contribute to human health as gas has lower levels of nitrogen oxides, virtually no sulphur dioxide or particulate matter, and no mercury emissions. The versatility of gas makes it interesting beyond a GHG emissions perspective. An increasing number of countries, such as China and India, are turning to gas as the key contributor to solve the severe urban air quality problems,” argues Marco Alverà. “Moving forward, we encourage all signatories of the Paris Agreement, and in particular the EU Member States, to lay down in their Nationally Determined Contributions the various ways in which gas can help reach their climate objectives.”

[1] Annual European Union greenhouse gas inventory 1990–2015 and inventory report 2017:


Press contact:   

Download this press release in pdf here.

Press Release: Letter to C40 Mayors from the President of GasNaturally} Thu, 04 Jan 2018 00:00:00 GMT Brussels, 4 January 2018: On the 22th December 2017 Marco Alvera the President of GasNaturally sent a letter presenting the benefits of gas as a vehicle fuel to the Mayors of C40 initiative - a global network of cities committed to addressing climate change.  The letter outlines the key environmental, health and economic benefits of a switch to gas in transport and it welcomes the recent uptake of gas-fuelled vehicles in public transport services in two European capitals. The letter was delivered to Anne Hidalgo the Chair of C40 and Mayor of Paris, and to the Mayors of cities at the forefront of sustainable transport development.


Brussels, 22 December 2017

Dear Mayors, 

On behalf of GasNaturally, a European partnership of six associations that represent the entire gas value chain, I am writing to you to present innovative solutions that could best improve the air quality in your cities.

Air quality is one of the largest environmental challenges that municipalities are currently facing. Despite the strengthening of emissions standards, particulate matter strongly affects air quality, often leading to respiratory and other health problems among urban populations.

To improve air quality, on top of technological breakthroughs, political courage is needed to promote a cultural change in how citizens use energy and to ensure the economic sustainability of city-led initiatives.  

Compressed Natural Gas (CNG) and Liquefied Natural Gas (LNG) vehicles are ready, mature, and affordable solutions to improve cities’ air quality. Given the low capital expenditures required to convert gasoline-powered vehicles to natural gas, fleet renewals can be quickly accelerated. CNG-powered cars can achieve over 90% reduction of particulate matter and emit more than 30% less CO2 than petrol cars, without need for subsidies and without compromising on performance, as the engine is the same (see Annex I).

Natural gas is also the best partner to support low-emission mobility through wider use of renewable energy sources. For example, renewable gas produced from biomass conversion of municipal waste and/or from renewable electricity via power-to-gas processes is fully compatible with existing CNG vehicles. 

GasNaturally welcomes the recent decisions of two major cities. Madrid’s public transport company, EMT, announced that it will order more environmentally-friendly natural gas-fuelled buses, reaching 75% of its fleet by 2019. Equally positive is the adoption of alternative fuels by companies providing services to the City of Paris.

In conclusion, natural gas offers cost-effective and clean solutions to improve air quality and address climate change challenges. Further, it is readily available to any city in the world that aims at providing its citizens with cleaner air. At GasNaturally we are keen to promote additional ideas to foster progress in municipalities.  We would be delighted to further discuss the cleaner solutions gas can deliver to the C40 cities and remain at your disposal to provide you with any additional information.


Yours sincerely,

Marco Alverà


GasNaturally President




Ms Anne Hidalgo, Mayor of Paris, Chair of C40 Cities


Mr Sadiq Khan, Mayor of London

Mr Eric Garcetti, Mayor of Los Angeles

Mr Frank Jensen, Mayor of Copenhagen

Ms Ada Colau, Mayor of Barcelona

Mr Mauricio Rodas Espinel, Mayor of Quito

Mr Gregor Robertson, Mayor of Vancouver

Mr Miguel Mancera, Mayor of Mexico City

Mr Giuseppe Sala, Mayor of Milan

Ms Jenny Durkan, Mayor of Seattle

Mr Phil Goff, Mayor of Auckland

Ms Patricia de Lille, Mayor of Cape Town



Annex I


Adding natural gas vehicles to the fleet renewal process is more effective and cost-efficient than focusing only on electric vehicles. Renewing a bus fleet with natural gas-fuelled vehicles delivers greater environmental benefits than doing so with electric vehicles for the same cost.

Cities have a particular interest in reducing non-methane hydrocarbons (NMHC). Due to the presence of nitrogen oxide in the atmosphere, when combined with sunlight these emissions have a direct harmful effect on the human respiratory tract. They also cause acidification and are therefore damaging to plants. As the formation of NMHCs in gas is particularly low, when compared with conventional fuels, natural gas offers ten times less reactivity to ozone formation. Under the Worldwide Harmonized Light Vehicles Test Cycles (WLTC) recently adopted in Europe, natural gas vehicles have the lowest level of ozone precursor formation.

Finally, reducing particulate matter can significantly improve air quality. Again, the use of natural gas in vehicle engines comes out ahead: tests show that engines using natural gas have up to 97% lower particulate emissions compared with those using conventional fuels.

Press contact:


Innovation @ GasWeek 2016} Thu, 13 Oct 2016 00:00:00 GMT 21-24 November 2016 (Strasbourg, France)

Gas Week has become a signature event on the EU calendar, enabling industry stakeholders and EU policymakers to come together and discuss the future of Europe’s climate and energy policy.  This year’s edition will consist of a number of events in the European Parliament in Strasbourg, France.

Innovative technologies will play a key role in achieving Energy Union and climate goals. With this in mind, Gas Week 2016 aims to highlight how gas can play an active role in driving innovation and new solutions across sectors. 

Gas Week 2016 will bring together high-level speakers from the public and private sector to offer fresh perspectives on topics ranging from partnering gas and renewables, and decarbonizing transport, to improving urban air quality. You can follow our Gas Week events on our website and on social media throughout the week. Don’t miss your opportunity to join the conversation @GasNaturally on Twitter!

We look forward to welcoming you! 

Watch new GasNaturally President Marco Alvera’s welcome message} Wed, 12 Jul 2017 00:00:00 GMT Marco Alverà, President of GasNaturally and CEO of SNAM, explains how natural gas can contribute to reaching the EU’s climate and energy targets by reducing emissions, tackling energy poverty and integrating renewables into the energy system.

Watch video here

IOGP's Positions on the Clean Energy Package} Fri, 07 Jul 2017 00:00:00 GMT Delivering a flexible, resilient and secure market: IOGP response to the proposal on Power Market Design

IOGP recommendations for a reliable and transparent governance system of the Energy Union

Integration of renewables under market conditions: IOGP response to the revised Renewables Directive

IOGP contribution to the debate on the Energy Efficiency Directive

Debate hosted by MEP Adina-Ioana Valean finds gas is key to delivering effective & affordable Clean Energy Package} Tue, 04 Jul 2017 00:00:00 GMT

A dinner debate on the Clean Energy Package, hosted last night in the European Parliament by MEP Adina-Ioana Valean, Chairwoman of the ENVI Committee, found that gas is a flexible and an affordable fuel which can reduce carbon emissions and improve air quality in all energy sectors.

In her remarks, MEP Valean emphasised that gas can contribute to achieving the energy transition. “Natural gas, which is still largely produced in Europe, can help in achieving the objectives of the Clean Energy Package in a cost-effective way and reduce emissions in heating, power generation and transport,” said Ms V?lean.

The newly appointed GasNaturally President, Marco Alverà, who is also the CEO of the Italian gas TSO Snam, added: “The gas industry sees the Clean Energy Package as a key step forward in putting consumers back at the heart of energy policies and reinforcing energy market principles.”

Mr Alverà further stressed that the most cost-effective way to achieve the EU’s climate and energy goals is to combine gas and renewable electricity. “Ensuring access to both clean and affordable energy is clearly a priority for Europe and for our industry. As the EU prepares to tackle this issue, it will be crucial to keep in mind that gas is three times cheaper than electricity,[1]said Mr Alverà.

He added that domestic gas production, the existing gas infrastructure, including storage and LNG, help to create a liquid market and provide the flexibility needed to integrate an increasing share of variable renewables into the EU energy mix. “What is more, gas can also be renewable, efficiently transported and stored in the existing infrastructure, thus facilitating Europe’s energy transition,” – concluded GasNaturally President.

Together with Marco Alverà, GasNaturally and its members will continue dialogue with EU policymakers and stakeholders on the secure and resilient energy system for EU consumers.



[1] Report ‘Energy prices and costs in Europe’, European Commission, COM (2016) 769 final.

Gas is one of the safest bets for EU’s energy and climate success} Tue, 04 Jul 2017 00:00:00 GMT Europe will need gas to make renewables work. One of my principal aims as the new president of GasNaturally will be to engage with our partners and policymakers and explain why gas is one of the safest bets if we want EU energy and climate policy to be a success, writes Marco Alverà.

Marco Alverà is the president of GasNaturally, a grouping of European gas explorers, producers and distributors.

At this stage, the advantages of gas as a cleaner alternative to coal are well known. But there is one aspect which is sometimes overlooked in the pursuit of delivering policy: affordability.

If consumers have difficulties paying their bills due to costs associated with the greater share of renewables in the energy mix, the transition to a cleaner system could face strong opposition from the public.

If governments choose this path, they will face a public backlash at some point and will have to slow the adoption of cleaner technologies, jeopardising the overall process. There is a risk that if consumers can’t have affordable heating, they will make their governments feel the heat. Governments need gas to ensure that renewables are accepted by the public. Gas is needed to make renewables work.

There are a few things we can do, however, to achieve a low-carbon economy at a lower price tag.

We already know that switching away from coal to gas in power generation – where coal contributes around 80% of the sector’s carbon emissions – will cut CO2 emissions by half. This can be done by restarting existing gas plants and even converting coal plants to gas plants at a limited cost.

When it comes to heating, electrification raises costs for consumers. In Europe, electricity is three times more expensive than gas per kWh. Despite falling prices for certain technologies, this gap is expected to widen in the years to come as electricity infrastructure needs to be reinforced and large-scale storage becomes necessary. In terms of efficiency, gas appliances are among the most efficient and cheapest to run, especially compared to electric versions.

Gas – compressed natural gas (CNG) and liquefied natural gas (LNG) – is also well suited for transport, representing a cost-effective solution for reducing carbon emissions and improving air quality. Beyond the road transport sector, these technologies are also able to deliver environmental benefits for the marine sector, when used in river barges and sea/ocean-going ships.

Some advocate mass electrification of various sectors as the best way forward. However, this would jeopardise the security of energy supply, restrict choices and unnecessarily add cost to consumers’ bills due to the large investments that would be needed to renew and expand electricity infrastructure in a short time.

Existing gas infrastructure can carry energy across the continent at a much lower cost than new electricity infrastructure. It can simultaneously provide the option of large-scale energy storage by converting excess electricity from solar and wind sources into synthetic gas.

R&D funding should therefore focus on emerging technologies, such as carbon capture and storage, power-to-hydrogen or methane, and any other promising, non-mature technologies. Subsidies for mature technologies, which are already competitive, only inflate consumer energy bills and need to be phased out.

Finally, the safe production of gas here in Europe deserves to be maximised to preserve and extend diversification of energy supplies, create jobs and a strong supply chain, and generate government revenues.

Our industry is committed to helping the EU achieve its climate and energy objectives. We are also committed to providing affordable energy to consumers. But we will only succeed in modernising our energy system if European consumers support this effort, which is conditional on their ability to pay their bills.

In short, our objective is clear: to rapidly build a cleaner, reliable and affordable energy system for all consumers. The optimum, direct route to achieving this is by combining natural gas and renewables.

If we do not get the approach right, we risk alienating consumers, who are crucial in enabling the energy transition.

Let’s prove that clean energy and affordable bills can go together.

Snam CEO Marco Alverà appointed first GasNaturally President} Tue, 13 Jun 2017 00:00:00 GMT BRUSSELS, June 13th, 2017: Marco Alverà, Chief Executive Officer of Snam, has been appointed as the first President of GasNaturally, the partnership representing the European gas industry.

“I am pleased and honoured to serve as GasNaturally President,” said Mr. Alverà. “Tackling climate challenge and improving air quality in our communities are two of the most pressing issues of our time. Natural gas can help find a solution to both.”

“I look forward to fostering the cooperation within our industry and with the renewable energy industry to underline the crucial role that gas can play in producing electricity, heating our homes as well as in powering our transport. Modern technologies are making gas a compelling and readily available fuel to achieve EU 2030 targets and beyond.” – added Mr. Alverà.

A graduate in Philosophy and Economics from the London School of Economics, Marco Alverà has considerable experience in the natural gas business and, more generally, in the energy sector. During his career, he has held positions of increasing responsibility first at Enel, where between 2002 and 2004 he closely followed the development of the gas business of the company and the IPO of Terna, and at Eni, where between 2005 and 2015 he managed the most important domestic and international matters in the natural gas business. He was appointed CEO of Snam in April 2016.

“GasNaturally’s members and myself look forward to continuing our constructive dialogue with EU policymakers and stakeholders on the solutions needed to position gas as a pillar of a sustainable energy mix and deliver the energy transition in a way which benefits all and leaves no consumer behind” Mr. Alverà stated.

Download this press release in pdf here

Eurogas views on the Proposal for a Directive of the European Parliament and of the Council on the Promotion of the Use of Energy from Renewable Sources (Recast)} Tue, 06 Jun 2017 00:00:00 GMT More gas use in 2015 and 2016 makes CO2 emissions tumble} Mon, 10 Apr 2017 00:00:00 GMT Position Note on the Impact Assessment SWD (2016) 405 final and the PEF value proposed for the EED} Mon, 10 Apr 2017 00:00:00 GMT Eurogas views on the Energy Efficiency Directive and the Energy Performance of Buildings Directive} Tue, 28 Mar 2017 00:00:00 GMT Implementing the Energy Union – Gas helps turning ideas into action} Wed, 01 Feb 2017 00:00:00 GMT The Energy Union was one of the major initiatives that the present European Commission launched when it was appointed in 2014. It even created a specific Vice-President position to oversee its execution.

More than two years on – and thousands of pages in legislative documents later – the Commission is now getting to grip with the implementation of the Energy Union.

Listening to the Vice-President for the Energy Union Maros Sefcovic going through his second State of the Energy Union speech, I have to say I feel proud to see how our industry, and GasNaturally, are contributing to turn ideas into action.

Here are four key elements:

  • Energy poverty: putting the consumer at the centre. Ensuring access to affordable energy is clearly a priority for Europe. As the EU prepares to tackle the issue, it will be crucial to keep in mind that gas is three times cheaper than electricity, according to the EU’s own numbers. And this is certainly not a call to increase taxes on gas, but rather to recall a very important reality.[1]
  • Energy security: Alongside the more traditional gas pipe supplies, new Liquefied Natural Gas terminals are helping to diversify the sources of the EU gas supply. Building on a reliable, existent gas network, the ability to import LNG makes our supplies even more secure (don’t forget: more than half of the gas the EU uses is produced domestically and in Norway).   
  • Energy efficiency: This is really not rocket science - consuming less energy makes it cleaner, more secure and cheaper. A large part of European citizens use gas to heat their homes and their water, which means that a switch to new boilers – that are much more efficient – could save them good money, just as it would limit greenhouse gas emissions.  
  • Decarbonization: I left this last because this is Europe’s ultimate, overarching priority: deliver on its climate ambitions and on the Paris Agreement. The best demonstration that gas can easily help deliver on these goals is fresh data from a joint analysis of two environmental think-tanks, Sandbag and Agora Energiewende: “EU power emissions fell 4.5% in 2016, primarily through a huge switch from coal generation to gas generation,” they said in presenting their most recent report.

The European gas industry is committed to help Vice-President Maros Sefcovic and his team to deliver on the Energy Union objectives.

By François-Régis Mouton, Chairman of GasNaturally

[1]   Report ‘Energy prices and costs in Europe’, European Commission, COM(2016) 769 final. Figure 3 in this report shows that the energy component of average EU household retail electricity prices equals around 75€/MWh, and for industry – slightly over 50€/MWh (Figure 6). Figure 10 shows that the energy component of average EU household retail gas prices accounts for around 35€/MWh, and for industry – slightly over 25€/MWh (Figure 12).

What future for gas in a decarbonised world?} Wed, 25 Jan 2017 00:00:00 GMT Gas markets are at a crossroad. Not long ago, it was common to see headlines such as “Gas, no longer the fuel of choice” or “The golden age of gas: gone for good?” Did that mean the end of gas as a result of the rapid expansion of renewable energy?

Then, natural gas became known as the “bridge fuel”. Given that natural gas is the least carbon intensive fossil fuel, and that it will take time to scale-up Renewable Energy Sources (RES) sufficiently to meet the Paris Agreement (PA) objectives, some have suggested delivering the energy transition in two stages: first by moving from coal to natural gas, then from natural gas to RES. The latest IEA World Energy Outlook sees gas as the fastest growing fossil fuel and overtaking coal as the dominant fuel in the global energy mix. This is why gas became known as the “transition fuel” or “bridge fuel”.  However, studies[1] have shown that the PA objectives could not be met only by substituting coal with gas. Moreover, it could lock in long lifetime investments in gas, which could become stranded assets as a result of RES growth.

The rapid expansion of RES does not mean the end of gas or relinquishing its “bridge fuel’ title. There is a third possibility, as in practice RES need gas. Gas and RES are complementary rather than substitute. Implementation of the PA requires full decarbonisation of the power systems. To integrate a high level of renewable energy, power systems need flexibility to cope with the stress resulting from sudden and unpredictable variations in availability, which is characteristic of renewable energy. And gas can provide the solution, as gas fired power generation units have short start-up times and rapid ramp-up rates, which means that they can provide more flexibility to a power system than any other power generation technologies (with the exception of pumped storage hydro). So natural gas is the balancing fuel of choice, to offset unexpected lack of availability of RES units.

However, natural gas can play the role of balancing fuel only if the gas system is itself sufficiently flexible. In a system with economic dispatching and a low level of RES, gas-fired power generation assets are usually operated to provide base-load or mid-merit power, or, in the case of simple cycle gas turbines, peaking power and gas consumption follows a predictable profile. In a system with high shares of variable RES where gas units are following the variable net load, the demand for gas at system and unit level becomes more variable and difficult to anticipate. The flexibility of gas-fired generators may be limited by the flexibility of the gas supply. To maintain flexibility, gas infrastructure will need the capability to handle sudden up and down swings in gas demand. Gas contracting practices can also affect supply flexibility.

Moreover, relegating gas to a mere backup fuel implies that much of the existing infrastructure may be underutilised, making it difficult to guarantee the profitability of gas power plants, and therefore attract investors. Capacity Remuneration Mechanisms (CRM) may then be justified. In that perspective, the “Energy Winter Package”, published by the Commission on the 30th November last year, limits eligibility to CRM to plants emitting less than 550gCO2/kWh. Only the most flexible and least CO2 intensive power plants meet that criteria, and they are mostly gas fired. Invariably, most gas-fired plants, with the exception of the oldest OCGTs, meet the criteria.

So there is a role for gas in a decarbonised world, but not an easy one.  To keep its position, gas has to change, adapt and be flexible. It needs to stay on its toes all the time, watching out for the rapidly declining cost of storage, batteries in particular, that may affect its role both as bridge fuel and balancing fuel, but especially the latter as storage can provide the balancing requirements for the whole power system.

By Silvia Pariente-David, Energy Consultant, formerly Senior Energy Specialist, World Bank

[1] Laconde Thibault, Accord de Paris : Quelles implications économiques et technologiques ?, Energie & Développement, April 2016

UK Energy Research Center, The Future Role of Gas in the UK, February 2016

The EU Power Market Design: planning for success, without discrimination} Tue, 22 Nov 2016 00:00:00 GMT The European Commission’s upcoming proposal for a new design of the electricity market will aim to set the bloc on track for lowering emissions and better integrate more variable renewables.

To be sustainable and limit the cost on Europe’s consumers, this proposal will have to be well thought-through. Among the essential consideration, policy makers should recognize that using existing flexibility offered by both gas fired power plant and gas infrastructure combined with renewables can form the core of the electricity system. Also, to achieve a truly integrated power market, they should ensure that subsidies are removed and that all the participants in the electricity market can compete on a level playing field.

Indeed, subsidies for mature technologies should be phased out.  Costs that are currently socialised should instead be targeted at those causing them.

This can be done through pricing of carbon emissions as well as charging full value for the provision of flexible plants to balance electricity production and also charging full value for transmission.

However, this is only one half of the story.

Another important element is non-discriminatory access to the market for all: no-one should be given priority. Along with the responsibility of bearing their costs, all market participants should also be offered the opportunity to generate revenue by providing services, for example in the balancing markets. Similarly, renewables should not be the only ones to be given priority when curtailments are required – the two go hand-in-hand.

The opening up of the UK gas market in the 1990s is a good example. Initially, new companies entering the market to sell their gas had no responsibility for balancing the system, with the incumbent having to retain responsibility for this. As the market share of the new entrants grew, this position became untenable and they had to take on responsibility of balancing their own portfolios. Crucially, they were also given an equal opportunity to generate revenue from the newly-created balancing market by bidding in flexibility available to them (both on the demand and supply side).

In today’s electricity market, it will be important to put in place incentives on both suppliers and consumers to balance demand and supply by ensuring that the prices emerging when the two don’t match do reflect the real-time cost of the electricity produced to re-balance that relationship. But, given that flexibility will become increasingly crucial, it will be equally important to open balancing markets to all types of electricity sources, with no discrimination.

A few other, more technical things need to be done as soon as possible: the introduction of a reference intraday market price before 2020; the shortening of the gate closure time and making full use of interconnection capacity.  Additionally, a European based approach to system adequacy should be adopted with a consistent approach being taken towards assessing the need for and if necessary the implementation of capacity remuneration mechanisms.


“Achieving a level playing field” is an abused expression – including in Brussels. It is however key here: we need to avoid any misallocation of costs and also any discrimination in terms of market access, if we are serious about ensuring that the power sector is able to further reduce carbon emissions, cost-effectively and without distorting the workings of the EU’s internal market. For the power market reforms to be a success, market participants must wholeheartedly embrace this principle rather than argue for exemptions.

By Malcolm Rice-Jones, Chairman of GasNaturally's Power Generation Task Force

Innovation with Gas} Mon, 21 Nov 2016 00:00:00 GMT  It is acknowledged that 80-95% decarbonisation will require a bold, integrated approach to building a new sort of energy system. The Energy Union recognises that in order that this transformation is delivered in a secure and affordable way to Europe’s citizens, we need a bold and innovative approach to make it a reality.

The move towards a future incorporating increasingly large amounts of renewable energy will help us achieve the goals of decarbonisation. However, making best use of the renewable resources available to us and integrating them into our energy system, requires us to look at how we can adapt what we have today to continue ensuring maximum security, reliability and cost-effectiveness in the future.  Trying to achieve deep levels of decarbonisation through electrification alone may prove to be challenging from a technical perspective, increasingly expensive and ultimately unsustainable.

In this context, the gas industry is embracing a paradigm shift concerning what its infrastructure can and will contribute for a future energy system. Unlike many forms of renewable energy, gaseous energy (i.e. gas in its ‘natural’ and renewable forms e.g. biogas/methane, synthetic gas) is dispatchable and storable. Moreover, gas networks can provide adaptable, responsive, efficient and reliable energy, readily accommodating rapid shifts in demand which often greatly exceed the entire capacity of national electricity transmission systems. Increasingly the gas networks can be, and indeed some already are, transporting renewable gas.

As more variable renewable energy is deployed in line with the EU’s ambitious targets, innovation will lead to improvements in energy efficiency, demand side response measures and improvements in batteries and other technologies for electricity storage. These are important developments, but alone will not achieve the extent of system flexibility we need to integrate variable renewables and achieve 80-95% CO2 reductions.

The amount of flexible, daily, and seasonal storage needed to cost effectively integrate more and more intermittent renewable generation will require an energy vector that can reconcile large swings in demand with swings in electricity production from variable renewable sources. Natural gas and its transmission and distribution networks are already providing such a vector. Additionally, substituting coal with gas in power generation can help in reducing CO2 emissions and will have a substantially positive impact on air quality and consequently on human health, especially in urban areas.   In the longer term, Carbon Capture and Storage (CCS) could play an important role in a low-emission energy system, further reducing emissions from gas-fired power plants, is currently being tested in other parts of the world. Excess renewable electricity beyond grid capacity, which is increasingly being wasted, can be turned into renewable gas. Moreover, innovative addition of renewably-derived gaseous energy to an integrated gas network with vast storage capacity can put a stop to this wasteful curtailment of excess electricity production.  This unlocks the gates that are currently limiting the deployment of intermittent renewable energy production, while at the same time providing the electricity grid the flexibility to operate effectively within its storage constraints. This is the concept of power to gas, which is gaining increasing attention across the energy world.

This week is Gas Week in Strasbourg. This year, GasNaturally will hold a number of events focusing on innovation from gas, in partnership with renewables, in power generation, heating and transportation, and the role of gas in improving air quality. The gas industry will showcase what it already does and what it’s capable of delivering in the future through the use of gas as a renewable energy vector to shape the European energy system. From their side, EU policy makers can contribute by ensuring the right framework conditions.

A resilient Energy Union will only be successful in the long run if the fifth innovation pillar is successful. Indeed, the other four pillars depend on it. Without innovation in a way that provides the needed support to the other pillars, we cannot succeed. Innovation with gas can help us decarbonise faster and at a lower cost than electricity alone. The gas industry is ready to play its part in the EU energy transition. See you in Strasbourg!

By  Robert Judd, Secretary General of GERG and Kyriakos Gialoglou, Vice-Chairman of GasNaturally



Three moves to turn COP22 into action} Thu, 10 Nov 2016 00:00:00 GMT Last year, it was Paris. The climate change deal – struck by the almost 200 national delegations – has changed the perspective in which policymakers, and industry, look at addressing climate challenge: since then, there is a pre- and a post-Paris Agreement era.

Now, it is Marrakesh. The almost 200 governments meeting in Morocco’s former imperial city will have to get to the nitty gritty of how to deliver on the commitments they made to fulfil the Paris Agreement .

As with Paris, I am now really looking forward to going to Marrakesh and speaking at the event that GasNaturally is organizing to focus on how the combination between gas and renewable energy can help face the climate challenge while still providing enough energy for the growing world population.

Indeed, GasNaturally plans to bring the gas industry’s voice to Marrakesh. We welcomed the Paris Agreement, as it is truly global. Now, we believe that we can help turn words into action. With the three following concrete actions, countries could set themselves on the right path to limit emissions, while providing the energy needed by a growing world population: 

First: they should ditch coal and switch to gas to produce electricity. Too many countries are still building new coal power plants. Gas-fired power plants emit half the CO2, are quicker and cheaper to build, can benefit from a well-connected, flexible gas infrastructure and can be located close to consumers. Unlike coal, gas emits much less of the major components of outdoor air pollution and almost no particulates: substituting coal with gas would have a substantially positive impact on air quality and consequently on human health, especially in urban areas. 

Second: they should embrace policies that facilitate the combination of gas and renewables in their energy mix. Renewables are growing exponentially. To deploy wind and solar at the scale we expect, we will need some balancing: another energy source will have to fill the no-sun, no-wind gaps to ensure that electricity production meets demand at all times, preventing blackouts. Gas is the best source of such needed flexibility. A gas-fired power plant can provide additional electricity in a matter of minutes and gas networks are geared to deliver on that flexibility.

Third: they can prepare for the long term, by politically supporting – today – investments in new technologies to cut emissions even further. Biogas and carbon capture and storage (CCS) are two important examples, as is power-to-gas. We are not starting from scratch: our industry is already significantly investing to develop these solutions, and, with its deep understanding of geology, is best placed when it comes to CCS.

According to the International Energy Agency’s two degree Celsius scenario, we will use much less coal, but more natural gas in 2040 than we have in 2013, to cover 22% of the world’s primary energy demand. This clearly shows that natural gas has a major part to play in the transition to a lower carbon economy and contributes to the solution we all want.

By François-Régis Mouton, Chairman of GasNaturally

Gas Week 2016 to focus on innovation} Thu, 13 Oct 2016 00:00:00 GMT Gas Week has become a signature event on the EU calendar, enabling industry stakeholders and EU policymakers to come together and discuss the future of Europe’s climate and energy policy.  This year’s edition will consist of a number of events in the European Parliament in Strasbourg, France from 21-24 November.

Innovative technologies will play a key role in achieving Energy Union and climate goals. With this in mind, Gas Week 2016 aims to highlight how gas can play an active role in driving innovation and new solutions across sectors. 

Learn more about this year's Gas Week edition here.

Understanding the riddle of who produces the cheapest electricity} Wed, 12 Oct 2016 00:00:00 GMT Over the last months, the approval of the Hinkley nuclear power station has stirred a heated debate, in the United Kingdom just as much as in Brussels.

The discussion put the spotlight on one key question: which technology is able to generate electricity the cheapest?

The answer will have a significant impact on the way we will produce our electricity in the next decades, with consequences ranging from the cost for consumers to the impact on climate. At the same time, the continued low prices of gas and other fuels and the falling costs of technologies such as solar are bringing new elements to the debate.

To answer the question, economists typically calculate a levelised cost for each technology with one-off expenditures such as site construction and equipment being spread over the expected lifetime production of the plant they are analysing. To this, they add variable costs (fuel, personnel and maintenance, for example) to get a total quote – in euros per megawatt/hour. This number is in theory comparable across all the technologies being studied.

However, reality is more complex. Apart from the fairly common discussion about the value of the key assumptions used, two other points are key.

Firstly, being forced to do these calculations is a sign of market failure (in some cases, reinforced by sizeable support schemes for renewables). If the power generation market was fully competitive, undistorted by subsidy and encompassed all the facets of power supply (for example location, intermittency and carbon footprint) then policy makers would need not worry about developing levelised costs. They would not need to pick winners out of the available technologies as the market would do this for them.

But because there are market failures – and this is the second point – we need to be sure we compare apples with apples, when we assess levelized costs. For example, power generated by solar panels right where it is used (let’s say in a house) has very different characteristics to the power generated by a centralised coal fired plant.  Simply basing the calculations on the capital and operating costs of the plant ignores issues of location, intermittency and carbon footprint that have to be taken into account.

These parameters can have a significant impact in calculating levelized costs.

Here’s an example:

-To ensure intermittent power supply can have the same characteristics as a dispatchable plant (one that produces electricity continuously), it needs some form of back up.
-If back up was provided by battery storage, the current cost would be at least €1 million per megawatt.  For a source needing back-up for 60% of the time, this  would lead to an increase in the levelised costs of production by around €25 per megawatt/hour. But for a source needing back-up for 90% of the time, the additional cost would be as high as €98 per megawatt/hour.   

The location of power production can also have a significant impact on costs. In Germany, last year industry paid, for the use of the power network, between €18 and €64 per megawatt/hour depending on the size and pattern of its consumption. These costs could be reduced significantly or removed all together if power production was located close to demand centres. The recently announced increase in cost of the Sued Link, the “Wind Power Line”, to €10 billion only reinforces the locational value.

Finally, even though currently it is low, the cost of carbon needs to be taken into account. (At the moment, the cost of carbon only adds a few euros per megawatt/hour to the cost of power produced from coal-fired generators).

Ultimately, the advent of a fully competitive power generation market in Europe will render the calculation of levelised cost obsolete. But in the meantime, decision makers use them to make policy choices: to make sure they make the best choices, we need to be sure we are comparing apples with apples.

Malcolm Rice-Jones is the Chair of GasNaturally's Power Generation Task Force

Accelerating towards a low-carbon future - a young professional's perspective on Europe’s energy future} Tue, 30 Aug 2016 00:00:00 GMT Europe’s energy future is, and will continue to be, about mitigating risk. Not only risk to the security of energy supply, or risk to competition and investment. But the larger (and potentially highly detrimental) risk of climate change. So what can we do, in fact WHAT SHOULD WE DO, to make sure that the Europe in 2030 does not resemble a Hollywood climate apocalypse film? Simply put, we need to look at clean alternatives and what is the best way to implement them.

In the aftermath of last year’s Paris climate agreement, the conversations about Europe’s energy future intensified. Yet, talk is cheap - signing a declaration to limit global warming “well below” 2°C above pre-industrial levels is not enough. It needs to be met with practical policies and a political attitude that encourages individuals, governments, industries, companies and cities to lower their emissions, while ensuring economic growth.

So where do we start in order to break the status quo and accelerate towards a low-carbon future? Well, a good starting point – one that includes a series of “easy wins” - can be identified in the types of fuels we use to power our homes, economies and cars. And it’s no secret that natural gas is a clean, low-emitting fuel that has diverse applications on its own, as well as a bridging component, a characteristic that other fuels lack. 

Every day, we use electricity to power our lifestyles and we also use some mode of transportation to get from point A to point B. Using an electric stove in Belgium is not the same as using one in Poland since the majority of electricity generated comes from nuclear, not coal – but it’s one illustration of many. The switch to natural gas in the right sectors and Member States will alleviate the amount of carbon and air pollution emitted.

As a sector that is responsible for one-third of Europe’s greenhouse gas emissions, decarbonising transport and increasing air quality is vital. This sector in particular would benefit from the use of LNG for maritime and heavy road transportation modes. The number of gas and electric vehicles is expected to increase as well.  But let’s not forget that an electric vehicle can be powered by electricity generated by coal!

The deadline to achieve Europe’s decarbonisation targets may appear far in the future (2030/2050), but the investment towards this transition needs to take place today.  Within the 2050 Energy Roadmap, it’s clear that coal is responsible for around 80% of CO2 emissions of the power sector and this needs to change. But if tackled, Europe can reap the benefits! As variable renewables (we see that in Brussels the sun does not always shine and the wind does not always blow) and smart grid technology expand, gas serves as a fuel anchor due to its flexibility and immediate availability.

Witnessing EU policymaking, there are some positive sparks, while other ideas need to be thought through. We need to be mindful that Europe is not isolated, and to make progress towards a low-carbon Europe also requires global momentum. Will this come from the US? Or even China maybe? Regardless of the uncertainty at international level, Europe can be at the forefront of policy creation to bring about tangible change. We need to do better, and we can do better for my generation and younger generations to come. 

By Paula IwaniukDirector of Communications & Marketing, Young Professionals in Foreign Policy (YPFP) - Brussels

Combining gas and renewables can deliver ‘energy miracle’} Thu, 17 Mar 2016 00:00:00 GMT A lot is happening in the world of natural gas. Just recently, the European Commission published its gas strategy and the United States exported its first Liquefied Natural Gas. It is a clear sign of the role that gas plays and will have to play in Europe’s energy mix.

All of this is good news: And it is happening just a few months after the success of the COP21 Paris Climate conference. The political momentum created in Paris will trigger serious action, which will potentially revolutionise the way we think about energy. The present mix of clean technologies and costs however, is still not able to match that political will – nor, for that matter, to meet the energy thirst of a growing world population by itself.

In short, as Bill Gates recently said, “we need an energy miracle”.

We are not there yet. But we can start laying the ground for future progress. Natural gas has already delivered improvements in emissions and air quality. Admittedly, the US would have been in a much more difficult position in Paris, were it not for the emission reductions achieved thanks to more gas (and less coal) in producing electricity.

According to the International Energy Agency’s two degrees scenario, we will have to use more natural gas in 2040 than we did in 2013, to cover 22% of the world’s primary energy demand. The solution to the climate problem is not getting rid of gas, but using it intelligently – for example in partnership with renewables.

If the EU wants to play the leading role in global CO2 reductions it has always been seeking, it must make the right choices today.  Too many continue to support coal, relying on renewables to offset its huge CO2 harm – wasting most, if not all, the great benefits of hydro, wind and solar. The recent EU communication on ‘The Road from Paris’ would have been a good opportunity to show the way on this point.

The EU needs to make the most of the post-COP21 momentum and ensure it doesn’t lag behind by supporting outdated energies.

First of all, it should be clear about phasing out coal: gas emits half the CO2 and much less harmful particles in power production. More importantly, it brings the flexibility needed to integrate renewables – which are by definition variable – in the power market. To encourage that partnership, the EU should design a power system that facilitates the combination of gas and renewables.

Second: the EU needs to get its approach to gas right. Private investments will be needed, for example, to keep improving the gas network. To commit big money, companies will need clear signals that their products will continue to have a market. Again, a clear move from coal to gas would send that signal, while also encouraging new uses for gas, such as in shipping and heavy duty vehicles.

Finally, we should continue to pursue a long-term vision by investing now in new technologies that will make that “energy miracle” happen. Our industry is committed to playing its part by developing innovations like biogas, power to gas and, for the longer term, carbon capture and storage (CCS).

Innovation will foster even more the partnership between gas and renewables that are already building the right steps toward that energy miracle, as numbers are starting to show. According to the IEA, global greenhouse gas emissions were flat in 2015, the second year in a row, even though the global economy grew.

This is the year of delivery for the Energy Union. Let’s make sure we keep going in the right direction.

By François-Régis Mouton, originally published in Euractiv.

LNG puts Europe in the middle of the global gas market} Fri, 22 Jul 2016 00:00:00 GMT

Turning gas into a liquid to transport it more easily is not only changing the way we perceive gas transport, but also the very way we use gas.


Historically, big pipelines have been moving gas from far-away production areas to consumption markets within Europe. These pipelines have a huge capacity, but they are not flexible: you cannot change their route – a situation that often leads to a long-term relation between the producer of the gas and the consumer.

Now, Liquefied Natural Gas (LNG) is dramatically changing that picture, as it is turning gas into a commodity that can be moved virtually everywhere around the world.

At –162°C, gas becomes liquid and it takes 600 times less space than in its gaseous status. Then, LNG carriers – special ships with huge tankers able to handle low temperatures – can carry it anywhere in the world, making it possible to pick the most rewarding markets. And if demand in one market goes down, LNG cargoes can be easily rerouted to more lucrative ones.

Europe is in a good position to make the most out of this new opportunity, which is in fact an effective way to ensure diversity of gas supply and improve security of supply. There are 21 LNG regasification terminals in the Mediterranean Sea, the Atlantic Ocean and, now also, the Baltic Sea. Those 21 terminals can regassify nearly 200 billion cubic meters of gas per year – that’s roughly half of the EU gas demand. LNG comes from a variety of countries: Qatar, Algeria, Nigeria, Norway and now also from the United States. Cross-border interconnections are making LNG available directly or indirectly to nearly all European countries. LNG is an effective tool to handle sudden supply and demand variations – for example to supply more gas in case of a sudden spike in demand: with sufficient LNG on the market, the amount of gas available to consumers can increase very fast.

LNG is a global business, with its own market dynamics; LNG prices are now close to pipeline gas, making it attractive, and opening space for new business opportunities.

LNG is a cleaner solution for transport and it can help improve air quality, be it in trucks or ships. That’s why the strict sulphur emission limits in the North Sea and Baltic Sea have triggered interest in LNG-powered ships. Since the first ferry, Norway’s Gultra, sailed in 2000, more than 75 ships running on LNG have been built. Experts believe that this number will reach 1000 by 2020. The use of LNG in heavy duty vehicles is also increasing. Currently there are over 2,000 LNG-fueled trucks on the road across Europe, with around 80 refuelling points to service them.

The deployment of LNG in shipping and in heavy trucks has prompted the development of “small-scale” LNG infrastructure, opening even further business opportunities: tanks and ships for refuelling, LNG truck loading, LNG filling stations, together with the associated logistics.


Thierry Deschuyteneer is Vice-Chair of GasNaturally and Secretary General of Gas Infrastructure Europe (GIE)

Photo credit: GIE

Gas: Europe’s smart choice for heating} Thu, 09 Jun 2016 00:00:00 GMT Did you know that natural gas provides almost half of home heating in Europe, and that heating represents 70% of a household’s energy consumption? The introduction of natural gas into our heating system over the past decades has dramatically changed how we as Europeans heat our homes, businesses and schools, enabling us to live comfortably without emptying our wallets. And we do so while at the same time not compromising the environment. Through the use of modern gas condensing boilers, we can reduce CO2 by 20% compared to traditional gas boilers, while improving air quality since compared to other technologies they emit no PMs, SOX and NOX.

But the gas industry is looking further ahead. We focus on innovation to better meet the heating needs and consumer expectations of Europeans. The necessity to heat homes while producing even less greenhouse gas emissions is driving innovation in gas for heating further, helping meet national and EU objectives to use energy efficiently while  lowering emissions. 

You can find out why gas is the smart choice for heating in our latest GasNaturally animation, which was produced together with Eurogas.

Just one way the gas industry has already demonstrated its innovative thinking and focus on efficiency is through the introduction of new, high-efficiency boilers, which can boost energy efficiency by more than 20% and benefit consumers by lowering energy bills.

Gas is also a sustainable heating solution, made even cleaner by new technologies such as gas heat pumps, which can capture heat from the air, ground or groundwater using gas in a highly efficient way.

Another innovative trend is to integrate gas into complete heating and cooling solutions in homes, allowing different energy systems to work together to meet personalised consumer needs. Such a system might combine, for example, a gas condensing boiler and solar thermal panels, or a hybrid unit of a gas condensing boiler with an electric heat pump. This can optimise energy usage, while ensuring that consumers have the heating they need, when they need it.

Looking ahead, ‘smart’ energy systems will be the cornerstone of these kinds of innovative heating solutions. By using smart systems, we can connect appliances and technologies, offering the benefits of gas and in parallel providing complete flexibility to the consumer. For example, as you may have already seen, ‘connected’ customers can control their home heating remotely through applications on their smart phones. This digitalisation of energy allows consumers to be in the driving seat. They receive value in terms of costs and energy savings and according to their individual needs. At the same time, their choices can reduce greenhouse gas emissions, a win-win situation.

As one of the most innovative industries in Europe, we will continue to evolve to meet both consumer needs and environmental challenges, and to collaborate across energy sectors to create smarter energy systems in the future. We’re confident that innovations in gas will continue to deliver clean, affordable and more efficient heating and cooling solutions to all Europeans. 

In fact, we want to maintain our dialogue with stakeholders about the role of gas in heating and increasingly in cooling. For this reason, on 14 June we are organising an Energy Day Workshop. This meeting is taking place at the European Parliament during the EU Sustainable Energy Week. The Workshop is hosted by MEPs Salini, Saudargas and Zanonato. For more details about it do consult the Events webpage of GasNaturally.


Kyriakos Gialoglou

GasNaturally Vice-Chairman

EU Affairs Director, Eurogas

Natural gas, driving Europe’s mobility forward} Wed, 01 Jun 2016 00:00:00 GMT The Natural Gas Vehicles Association joins GasNaturally, highlighting the industry’s innovation potential.


Natural gas is key to our daily lives: it heats our homes, produces our electricity and powers our industries. It can also be key to fuel our mobility, and make it cleaner.

That’s why NGVA Europe has decided to join GasNaturally and is looking forward to working with the other members to further raise the profile of natural gas – and gas vehicles – in Europe together.

Many important developments are currently under way at the political level as well as within the gas industry. They will determine the role that natural gas will play in the fuel mix of the future, and the fuel that will power our transport.

Natural gas is the most obvious candidate for quick wins today. And together with electricity and hydrogen, it also provides opportunities for integrating more renewables in the transport sector in the future.

As a fuel, natural gas is already widely available throughout Europe; the products and technologies to use it in vehicles are mature and available on the market; gas infrastructure is well-developed and reliable; renewable Synthetic Natural Gas (SNG), also known as power-to-gas, and further use of blends of natural gas with biomethane are an important focus for energy and automotive companies. Liquefied Natural Gas (LNG) can become the preferred solution to reduce emissions from heavy-duty vehicles and ships, while Compressed Natural Gas (CNG) is already being used in cars, vans, buses. Many different models are on the market today from established manufacturers. They can help to reach the target of a 30% CO2 reduction by 2030 in the non-ETS (Emission Trading Scheme) sectors, which include transport.

To put it simply: natural gas should be at the forefront of cleaner mobility towards 2050. It can reduce noise pollution as well as NOx and PM emissions.

In fact, policy makers are increasingly more interested in natural gas as fuel. Market rules and technology neutrality should be the starting point of the political discussion. To achieve the ultimate goal of decarbonising our transport in a cost-efficient way, we should take into account costs – of the fuel, the vehicles and the components – and the different levels of a variety of emissions.

We are still far from that.

CNG and LNG offer great opportunities for cities in the EU that are increasingly facing air quality issues. For them to take full advantage of such opportunities, we need to bring the market for gas vehicles up to scale. This can happen only if no single winner is picked from the start. All alternative fuels will play a role in the future, different technologies will serve different purposes and natural gas engines need to be able to compete on an equal footing.

NGVA Europe´s members stand for a proud and ambitious industry, eager to invest, grow and play an important role in providing sustainable mobility for our society.

As a new GasNaturally member, we look forward to actively contributing to this initiative which highlights gas’ role towards “Make a clean future real.”

Matthias Maedge, Secretary General

“The huge potential and benefits of natural gas engines are not sufficiently rewarded”

Three moves to get the EU power market right} Wed, 13 Apr 2016 00:00:00 GMT The European Union will this year have to come up with good ideas on how to best use – and integrate – energy sources as different as wind, solar, hydro, nuclear, coal and gas to produce the cleanest, cheapest and most reliable electricity possible. In short: it will propose how to best design Europe’s future energy market. EU energy ministers kicked off the discussion in April.

Any decision will have major implications on the energy sources that Europe will use to produce power in the coming decades. The prize of having a low-carbon power sector by 2030 is substantial, with a real opportunity to move the EU significantly towards its target of a 40% reduction in carbon emissions by 2030. 

For this to happen, the European Commission, whose proposals on the issue are expected by the end of the year – will have to take a number of decisions.

First: the EU’s power markets need to change, so as to push highly polluting, inflexible coal and lignite power plants, accounting for nearly 75% of the sector’s carbon emissions, into retirement. Existing gas fired plant could generate all the electricity produced by coal and lignite fired power stations by simply increasing their utilization rates from 26% to 68%. Ultimately, new build renewables plant could generate some of this electricity. This would have the advantage of dramatically reducing CO2 emissions, improving air quality and human health while increasing efficiency.

Second: the new renewable electricity will likely be produced in a different place from where it will be most needed (far from big industries or cities, for example). To ensure that power can easily be transported to where it is needed, sufficient interconnections and transmission lines will be required.

Given local opposition to overhead lines, such as seen recently in Bavaria (with a typical high voltage transmission project taking 15 years to implement in Europe) and concerns about their exposure to adverse weather, the EU might have to think about using underground cables, which, however, come at a (significantly higher) cost.

On the other hand, the gas network is already available and can provide energy storage and transportation for the renewable sector, thanks to the conversion of electricity into gas – the so-called Power to Gas. This unique capability can contribute to the decarbonisation of the energy system, while avoiding the huge costs of reinforcing the electricity grid.

It will also provide an increasingly valuable balancing and flexibility service to the electricity system through management of intermittency. All of this, of course, will have to be combined with efforts to build a truly integrated EU energy market, where sources compete on an equal basis.

Third: the power system has to have enough flexibility to handle peak demand, making sure that there are no blackouts, even when everyone has lights and air conditioning on, washes laundry, cooks while watching TV etc.  

For the time being, the EU only needs 65% of existing non-variable (“dispatchable”) capacity to meet peak demand. But this could get close to 100% by 2030 if no new firm capacity is added, as the highly polluting, inflexible plants retire. That’s assuming that power demand continues to stagnate rather than grow, i.e. there is a continued emphasis on energy efficiency to ensure power demand remains decoupled from economic growth and that sectors such as heating aren’t electrified.

Lowering the peaks in demand by working with consumers to shift their consumption to off-peak periods will contribute, but will be unlikely to provide a complete answer. Power storage, although progressing, is not expected to solve the problem any time soon.

It is therefore likely that the EU will need to add additional, flexible power plants, able to cover peak demand. Prices – i.e. the prospect of price spikes during periods for which there is a shortage of electricity on offer – should provide the initial incentive.

But for such an approach to be effective, the market has to be allowed to function properly, with no subsidies distorting price signals.  Providing a financial incentive for having power plants available to handle unexpected variations in demand or supply, even if the capacity isn’t then used (what the sector calls “capacity remuneration mechanisms”) is one option of last resort. 

If such mechanisms are introduced, they should preserve market competition, reflect the costs incurred by those who develop that capacity and, over time, be harmonised across the EU, in line with current State Aid Guidelines and the EU’s Climate and Energy objectives, and should therefore include criteria to support low carbon intensity, flexibility and reliability.  

Although these challenges are difficult, they can be solved, allowing us to achieve the prize of a low carbon power sector for Europe. On April 11, EU energy ministers kicked off the discussion on the issue, with some encouraging signs. Now, it’s up to the European Commission to move forward on the right track.

Malcolm Rice-Jones is the Chair of GasNaturally's Power Generation Task Force.

Photo Credit: National Grid