How we should really be using gas to tackle climate change

The natural and immediate inclination of emissions reduction practitioners and policy-makers is to substitute gas directly for coal in the power generation sector.  But this is a deeply flawed prescription.  For maximum advantage, we should rather use every single cubic foot of gas we possibly can to displace electricity in end uses.  Attention to this issue by policy makers can save untold gigatons of carbon emissions over the coming decades.

Natural gas is far from a perfect fuel.  Burning it creates GHG emissions.  Yet coal is far worse, and until the day is upon us when electric power systems have eliminated coal entirely, gas will play an important role in restraining its use.

Coal use is forecast by a number of international organizations to increase in the next decades, especially in large developing countries like China and India.  According to the Asian Development Bank developing Asia will increase its coal use by over 60% in the next 20 years, and the ADB forecasts that developing Asia alone will by 2035 create more carbon emissions than is believed sustainable for the entire planet, half of it from coal.

Growing recognition of the massive carbon emission consequences of such forecasts has unleashed a worldwide movement to displace coal-fired power generation with natural-gas fired generation wherever possible.

But there is a demonstrably better way to displace coal-fired generation using gas, one more far-reaching and far more effective across all relevant dimensions; and one particularly germane to the developing world:

Rather than displacing coal-fired generation with gas-fired generation, countries should instead deploy gas as deeply as possible into end uses in place of electricity.  Such opportunities are large and abundant, as shown later.  This is an entirely practical prescription that can easily multiply the climate change mitigation benefits of natural gas.  Further, the prescription promises to reduce the overall financial cost of energy supply systems.  It is a less costly, not a more costly solution.

The Rationale

A recent article in Energy Efficiency lays out the rationale in more detail.  But the core of the argument is that even newer, highly efficient gas-fired plants still waste 40% or more of the gas energy in the form of lost heat – energy that could instead be used to back out fossil fuel-generated electricity at the point of use.  In particular, a cubic foot of gas used to displace electricity in end use backs out more coal burned for power than the same cubic foot used for the same purpose in gas-fired generation.

The point is somewhat subtle, but a graphic depiction will inform your intuition.

Figure 1 (drawn from an Asian Development Bank study and also appearing in a recent book)illustrates.  Coal-fired generation operates at 40-45% efficiency for state-of-the-art super-critical coal plants.  Taking the 40% figure as illustrative, the top panel of Figure 1 shows that the coal energy used to produce electricity destined for final use suffers roughly 60% loss in the form of waste heat.  More critically, that waste heat has required in its production some 60% of the emissions involved in generating a unit of usable electric energy.  If this waste could be eliminated, so would 60% of the coal-based emissions.

The bottom panel shows how to do this.  Simply by using the gas directly for end uses that electricity might otherwise serve (about which more below), both energy losses and waste heat-associated emissions are eliminated.

The result is that each cubic foot of gas used to displace a unit of end-use electricity displaces about 2 ½ times the energy-equivalent amount of coal.  But if the gas is instead used in a 60% efficient power plant (CCGT, for instance), about 40% of each cubic foot is lost as waste heat, and so it takes 1/0.6 or 1 2/3 cubic feet to deliver the same unit of end-use electricity. The coal use saved via direct end-use application of gas expressed as a ratio to the coal saved by using gas use in power generation is therefore 2 ½  1 2/3 = 1 ½.

Alternatively stated, if the objective is to replace coal use with gas, it is 1 ½ times as effective to deploy gas in end uses for displacing coal-based electricity as it is to deploy it directly in gas-fired power generation.

The Practicalities

At the outset, it must be stipulated that in circumstances where coal-fired generation is located close to densely populated areas, displacing such generation with gas-fired capacity is entirely rational.  We see this happening in certain locations in China, for example.  Local pollution from coal plants and the attendant serious health concerns demonstrably justify this course of action for power plants near urban centers.

But the larger climate change mitigation problem calls for a correspondingly larger, more broadly-construed engagement with this fundamental opportunity.

The first practical question that arises is, “what, practically-speaking, are the opportunities for displacing electricity in end uses with natural gas?”

As it happens, the opportunities are decidedly large.  Gas can be used in numerous end-use applications including certain industrial processes; space heating and cooling; water heating; and powering appliances such as cooktops, ovens, clothes dryers, and refrigerators. Longer term, as fuel cell technology develops and becomes more cost-effective, it is possible to envision entire communities fueled by gas alone, with highly efficient gas-based fuel cells delivering the electricity to service electric lighting, televisions, electric motors, computers, modems, routers, servers, and all manner of communications devices.

The Energy Efficiency article referenced above analyzes this question in detail (ignoring the advent of fuel cells), showing that in the United States, some 64% of household use of electricity is in principle substitutable by gas, as is 32% of commercial building electricity use and 30% of electricity use by manufacturing.  These are enormous numbers in absolute energy use terms.  While the corresponding numbers have not been cranked (to my knowledge) for the developing world, it would be a major surprise if similar opportunities do not make themselves evident there.

Once fuel cells become economically available, regional microgrids can rely on variable renewable technologies for electricity supply, but instead of depending for backup from the electricity grid, can instead rely on a gas supply infrastructure for such backup – the gas grid.  And permitting ourselves to look at the very long term when fusion technology enables the supply of hydrogen for the “hydrogen economy,” a natural gas infrastructure already incidentally put in place can meet every single energy end-use need, electric or otherwise.

The opportunities available in industrialized countries are more limited, owing to rigid legacy infrastructure and legacy regulatory systems, but this is not the case for developing countries who in large part are building energy supply infrastructure from scratch.

The second practical question has to do with the economics of this proposed prescription.  Here we find a result to be relished by those who look to cost-effectiveness as determinative of the practicality of energy solutions.  Using gas in end uses instead of for power generation will save significant financial resources, resources in scarce supply for developing nations.

Looking at Figure 1, consider two alternate supply chains, one where domestic gas is supplied directly to end users and another where it is supplied to a power plant.  To supply gas to end users, the gas will be gathered and processed (usually in the field, to extract the natural gas liquids if it is “wet” gas).  Then it will be sent to a transmission pipeline (and sometimes to a storage facility) from whence it will be sent to distribution pipelines and then to individual lines that feed individual residential, industrial, and commercial establishments.

If the same gas is instead supplied to a power plant, it will likewise have been gathered and processed and delivered via pipeline to the power plant, so these costs are the same in the two alternatives (somewhat more for the power option, actually, as it needs 40% more gas to deliver the same end-use energy).  From there, the costs are not at all comparable.  It is much cheaper to then deliver gas to end users than to convert it to electricity in a high capital-cost power plant, send it across an expensive high-voltage transmission line, down-convert it to lower voltage in a costly sub-station, distribute it along an expensive distribution line, down-convert it again to end-use voltages, and deliver it to a household or other establishment.

Thus, using gas to displace electricity in end uses promises to substantially reduce the financial resources required to supply the same end use energy needs.  This, even while reducing emissions.

The third practical question that arises is, “what happens to this prescription when a country has limited gas supplies?”

In this case, the prescription remains unchanged.  Whatever gas resources a country may have available, it is clear that such resources can be extended for maximum benefit by using them to supply end uses.  Used instead for power generation, such resources will suffer losses in the form of waste heat.  Better to use scarce gas resources in a manner that extends their inherent energy value and lifetimes by deploying them in end uses where they suffer far less in the way of energy losses to the creation of waste heat.

On top of this, gas scarcity is unlikely to be problematic as the natural gas resources of the developing world appear to be massive.  In fact, the ADB study cited previously, relying on analysis from the US Energy Information Administration, reports that the Peoples’ Republic of China has the world’s largest technically recoverable shale gas resources.  Canada, Argentina, Mexico, and South Africa fill out the top 5, while India, Pakistan, and Indonesia boast large resources of unconventional gas in the form of coal bed methane.  But limited gas supply, if it happens that such resources prove difficult to develop, does not negate the wisdom of using whatever is available to displace electricity wherever possible.

The Energy Efficiency articlecited previously addresses a number of other questions that may have arisen in your mind.

Another Illustration of the Phenomenon’s Benefits

To drive the point home, consider the hypothetical case where gas has entirely displaced coal in power generation.  What, then, is the best use of a new cubic foot of natural gas?

Figure 2 illustrates for gas-fired generation assumed to be state-of-the-art 60% efficient:

Even in an electricity supply scenario where gas is the only remaining fossil fuel used, deploying it in end uses instead of using it for power generation saves 40% of the energy (and eliminates the emissions associated with useless waste heat generated in power generation).  Accordingly, a cubic foot of gas used to displace the energy-equivalent electricity displaces 1/0.6 or 1 2/3rds the gas that would be used to generate that electricity.

Alternatively stated, if the objective is to minimize gas-based emissions, it is 1 2/3rds times as climate-effective to deploy gas in end uses displacing electricity as it is to deploy it directly in gas-fired power generation.

The unavoidable conclusion is that the movement to displace coal-fired generation with gas-fired generation is an understandable but flawed one, given that abundant opportunities exist to more effectively displace coal by using gas in end uses.

Conclusion

Using whatever natural gas is available to displace electricity in end uses stands to spare the global climate gigatons of carbon emissions.

There is an urgent need for policy makers and energy/sustainability practitioners to engage this issue and to entertain the corresponding new policy choices.  Urgent.

This article is published in collaboration with The Energy Collective. Publication does not imply endorsement of views by the World Economic Forum.

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Author: Harry Saunders is an energy and sustainability economist with over 40 years in the field.

Image: Cuban farmer Daniel Garcia, lights a bio-gas stove at his farm in the province of Pinar del Rio in Western Cuba October 6, 2012. REUTERS/Enrique De La Osa.