Renewable power pumps gas [NGW Magazine]
Gas pipeline operators that have committed to lowering emissions are looking at new ways to achieve this. A few of these midstream players on both sides of the Atlantic are starting to invest in renewables to help power their natural gas transmission infrastructure.
Companies taking this step in the US include Williams and Enbridge, while in Europe, Lithuania’s Amber Grid recently announced a new solar initiative. Other midstream firms could well follow suit, given that they are already taking other steps to reduce emissions. A recent example is TC Energy’s Wisconsin Access Project, which entails meter station upgrades and compressor station modifications designed in part to lower emissions.
Drivers
There are two major drivers behind this new uptake of renewables for powering gas transmission – the improving economics of renewables and efforts to meet environmental goals.
“The current investment trend is a function of both [economics and environmental targets] as the cost of solar generation has continued to decline while public investors are increasingly advocating for more attention to environmental impact and emissions targets,” Tudor, Pickering, Holt & Co.’s (TPH) director of infrastructure research, Colton Bean, told NGW.
He said it is difficult to predict how the picture would evolve with any certainty, given that the use of renewables for gas transmission infrastructure is at such an early stage. Nonetheless, “we would expect to see increasing investment,” Bean said. “Solar is likely to be more viable given significantly less land use than wind. We may also see a geographical skew to installations as solar irradiance is not uniform across the country/world.”
According to the latest data from the International Renewable Energy Agency (Irena), the global weighted-average levelised cost of electricity (LCOE) of utility-scale solar photovoltaics fell 82% between 2010 and 2019. The cost of concentrating solar power (CSP) fell 47% over the same period, while onshore wind costs declined by 39% and offshore wind by 29%. These figures back up the assertion that renewable energy – and solar in particular – is becoming an ever more affordable option.
On the environmental side, the pressure – and potential incentives – to pivot to renewables will be greater in those countries and regions that have adopted official targets for reducing emissions. This year the number of countries adopting long-term targets of “net zero” greenhouse gas (GHG) emissions has risen. However, the economic fallout of the Covid-19 pandemic may yet cause some of them to back-track if the cost of pursuing such targets remains high.
Nonetheless, numerous countries are at least talking about how to pursue a “green recovery” from the pandemic, and this will help accelerate the uptake of renewables by various industries, including oil and gas. Investments in renewables are being spurred in some countries through incentives such as tax credits and subsidies, and more of these will be needed for green recovery scenarios to play out.
Early movers
Limiting the uptake of renewables is the intermittent nature of the power they generate. This is illustrated by some of the early projects to use solar to help power gas transmission infrastructure.
In Williams’ case, for example, the company says on its website that its solar initiative builds on its gas-focused strategy. “Natural gas-powered generation of electricity brings reliability to the US electric power grid and allows for growth in renewable energy,” Williams says. “Investments in intermittent solar power are made viable by the benefits of combined cycle back-up on the grid and tax credits.”
In a press release in late May, Williams also noted that its plans to develop solar installations to provide electricity for its existing gas transmission and processing assets were possible thanks to “generous” federal and state tax credits. The company is in the process of identifying locations where solar power installations are both economic and can be primarily sited on company-owned land adjacent to existing infrastructure.
Initial sites have been identified in Alabama, Colorado, Georgia, Louisiana, New Jersey, North Carolina, Ohio, Pennsylvania and Virginia. The solar installations are due to start up from late 2021.
The company said that in total, its facilities draw an average of over 400 MW of electricity, which it now buys from the grid. It expects that once its solar installations are online, agreements with local utilities will allow it to sell excess solar power not used by its own facilities back to the grid.
Enbridge, meanwhile, has already had one solar plant recently completed that was designed to help power its Lambertville compressor station in New Jersey, on the Texas Eastern Transmission pipeline system. Completion of construction on the solar plant was announced in mid-October and described by Enbridge and infrastructure company Merit SI as the first project of its kind in the US.
The 2.25-MW solar plant is expected to reduce GHG emissions by more than 58,500 metric tons over the project’s lifetime. An Enbridge spokesperson told NGW that the solar project was anticipated to provide roughly a quarter of the power needed for electric compression at the compressor station, with the remaining power needs continuing to be met by the local power grid.
The spokesperson noted that gas “complements a larger-scale deployment of weather-dependent renewables” and remains a constantly available and low-cost source of energy. Enbridge continues to look for opportunities to further integrate renewables with its gas operations, however.
“We are making progress on evaluating other locations along our pipeline footprint to build similar solar self-power facilities. We currently have 16 compressor stations with electric motor drive compressor units in the US and are examining each location for viability,” the spokesperson said.
“This project will help pave the way for our natural gas pipeline operations to be even more environmentally focused,” added Enbridge’s director of market innovation, Caitlin Tessin.
In Europe, meanwhile, Amber Grid announced in late October that it had partnered with Eternia Solar to install solar plants worth €980,000 ($1.1mn) at its existing sites. The Lithuanian company said that once the solar capacity is installed, it will generate around 40% of the electricity for its needs from renewable sources. This equates to about 1.3 GWh/year, out of the company’s total demand of 3 GWh/year.
“Producing renewable energy for the needs of the Lithuanian gas transmission system, we will make our contribution into clean environment creation and the strategic choice of Lithuania to increase the share of renewable energy sources in the energy sector,” stated Amber Grid’s CEO, Nemunas Biknius. He added that this initiative would allow for a “significant” cut to the company's electricity costs.
Europe has stricter targets than the US for reducing emissions, with an EU-wide net zero emissions target by 2050. If this is to be achieved, it is expected to require a variety of initiatives, as well as significant policy support.
Under these circumstances, the pressure on European gas transmission operators to reduce emissions by various means – including the use of renewables – appears likely to intensify.
Thus, if Amber Grid’s solar project achieves both its stated environmental and cost-cutting goals, this could boost the likelihood of other European midstream players following suit. On the other hand, some European gas transmission companies are starting to focus on integrating hydrogen into their operations, and this may become their priority. Given the growing momentum behind the energy transition, it will likely not be long before a clearer picture of the next steps emerges.