December 12, 2023
GIE and Frontier Economics have released a study on maintaining the security of gas supply while decarbonising our infrastructure with renewable and low-carbon gases. The study aims to contribute to implementing a robust and well-connected infrastructure system for renewable and low-carbon gases.
Background and Objective of the Study
The European Commission has set ambitious hydrogen production and consumption goals in the coming years. Extensive use of hydrogen would require a new system alongside the existing natural gas and biomethane infrastructure. In establishing the hydrogen infrastructure, it will pose a significant challenge to strike the balance between speed, cost-efficiency and security of supply (SoS).
Therefore, the aim of this study is to investigate how gas infrastructure operators may – via coordination – integrate more renewable/low-carbon gases in a cost-efficient way while maintaining SoS in the gas system. By addressing these challenges and exploring potential solutions, this study contributes insights into the ongoing efforts to adapt and evolve European gas infrastructure to meet the ambitious sustainability goals.
Focus and Structure of the Study
The focus of the study lies on challenges to the transition to renewable and low-carbon gases, in particular hydrogen, arising in the short term until circa 2030, which can be addressed via better coordination between market players.
The study is structured in two stages. The primary objective of stage one is to discern and outline the key challenges encountered by infrastructure operators in effectively managing a cost-effective transition while maintaining SoS in the gas system. The second stage of the study aims to derive possible solutions to the challenges derived in the first stage. The coordination-related measures to mitigate the different challenges together form an enhanced coordination scenario with four categories of solutions:
“Infrastructure is an enabler to make an emerging market like the hydrogen market grow. It is, therefore, relevant to build an economically efficient system for importing, storing and transporting renewable and low-carbon gases. In this process, we cannot ignore the continuing importance of our well-developed gas infrastructure for society and must therefore ensure SoS of methane in the transition.”
Catherine Galano, Associate Director at Frontier Economics
“The past few years represent a critical part of Europe’s energy transition. The role of renewable and low-carbon gases in enhancing decarbonisation while fostering energy resilience has been acknowledged and accelerated. On the other side, the regulatory framework to enable investment decisions at EU level has been shaped. It is now time to implement targets and bring ambitions to reality.”
Torben Brabo, GIE President
“We see more and more gas infrastructure operators kick-starting infrastructure projects for renewable and low-carbon gases, especially hydrogen. This will result in the integration of increasing volumes, which will serve both energy security and climate neutrality. This study presents good guidance to infrastructure operators on how to efficiently manage the transition period in the coming years.”
Ralph Bahke, GIE Board Member
Editorial notes
Gas Infrastructure Europe (GIE) is the association representing the interests of European gas infrastructure operators. GIE members are active in the transmission, storage, and regasification of renewable and low-carbon gases, including natural gas and hydrogen, via LNG terminals. Gathering around 70 industry entities from 27 European countries, GIE perfectly embodies the multiple transitional decarbonisation pathways of the EU regions. The association’s vision is that by 2050, the gas infrastructure will be the backbone of the new innovative energy system, allowing European citizens and industries to benefit from a secure, efficient and sustainable energy supply.
Media inquiries & interviews:
Gabrielle Lelievre, GIE Communication Manager
gabrielle.lelievre@gie.eu | +32 478 78 34 83 | www.gie.eu
Frontier Economics is one of the largest economic consultancies in Europe. We provide analytical expertise in various sectors and services on high-profile and intellectually challenging projects. We apply our economic toolkit to help governments, regulators, energy companies, and their financial and legal advisors solve complex problems, drawing on our expertise in strategy, regulation, valuation, and competition policy. We are at the forefront of thinking and practice in energy and environmental economics.
Media inquiries & interviews:
Alex Charlwood, PR Consultant
alex@arclex.com
Gas Infrastructure Europe (GIE) is the association representing the interests of European gas infrastructure operators active in gas transmission, gas storage and Liquefied Natural Gas (LNG) regasification. GIE is a trusted partner of European institutions, regulatory bodies and industry stakeholders. It is based in Brussels, the heart of European policymaking. GIE currently represents 70 member companies from 26 countries. GIE’s vision is that by 2050, the gas infrastructure will be the backbone of the new innovative energy system, allowing European citizens to benefit from a secure, efficient and sustainable energy supply.
