BAKU, Azerbaijan, Aug.4
By Leman Zeynalova – Trend:
The gas industry needs to use the current downturn and low prices to ‘sell’ the merits of the product – that gas is plentiful, clean, reliable and competitive and should be a platform fuel to support sustainable economic growth for decades to come, Trend reports referring to Wood Mackenzie.
The company’s Global Gas team believes that gas will be the most resilient of the fossil fuels through the transition, a relative winner because of its low carbon intensity on burning.
“Gas will have to contend with intensifying competition among fuels, disruption from new technologies and decarbonisation policies designed to undermine fossil fuels’ dominance of energy supply. The risks to demand vary by region,” said Wood Mackenzie.
Europe, where policy to reduce GHG emissions will continue to eat away at demand, according to the company.
“Today, gas demand is around 500 bcm a year, 10 percent down from the peak a decade ago. Policy has already improved energy efficiency and incentivised renewables which have displaced gas (and coal) in the power market.”
“We estimate 45 bcm, or 12 percent of gas demand, will be lost by 2040 across these three sectors, mainly to heat pumps, energy efficiency and hydrogen. New gas demand of 20 bcm from transport (CNG) and ship bunkering (LNG) may be a partial offset and contribute to CO2 reduction by displacing oil. Europe’s overall carbon emissions will fall more than 40 percent by 2030 on our forecasts, but don’t deliver the Green Deal’s 50 percent to 55 percent target. That suggests downside risks to our European gas demand numbers.”
The US, where peak gas demand looms in the mid-2030s, says Wood Mackenzie.
“Demand has boomed in the last decade, cheap shale gas squeezing coal out of the power market, winning market share in the industrial sector and sparking a renaissance in petrochemicals. Domestic gas demand growth, though, slows through the 2020s as these sectors become saturated and solar investment ramps up. LNG exports becomes the growth segment.”
“Asia, where hopes for sustained gas demand growth are firmly pinned. LNG imports of 340 bcm a year meet almost half the region’s gas demand. Asia’s economic growth and higher gas penetration will see LNG imports double by 2040. Coal still dominates the primary energy mix in Asia at around 50 percent, higher still in China; while gas use at 11 percent is less than half that in Europe and the US.”
Gas should be the winner with air pollution high on the agenda for most Asian governments and decarbonisation strategies gaining traction, according to Wood Mackenzie.
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