For a sustainable energy supply

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1 For a sustainable energy supply The clear task of natural gas 1

2 2

3 We are facing important choices The world is facing critical choices. Take the energy issue, for example. In a short space of time the world population will grow from six to nine billion inhabitants. Will there be enough energy for everyone? And at the same time: will the energy be clean enough and sustainable enough to tackle climate problems? There are no easy solutions, for the energy of the future must not only be sustainable, it must also be affordable and abundantly available. Furthermore, speed is of the essence - we have to take steps now. Those steps should also leave as much scope as possible for different sustainable energy solutions, meaning that consumers themselves can also continue to choose between energy forms in the future. What choices can the Netherlands make now to ensure it has sufficient clean and affordable energy sources in the near future? Which alternatives are within our reach in the short term? The Netherlands occupies a special position; it is a genuine gas country. Fifty years ago, one of the biggest gas fields in the world was discovered in the north of the country. That s why natural gas forms the backbone of our current energy mix. And we have an intricate gas transport network underground, supplying energy to many companies and power stations and millions of households. This starting point forms an ideal basis for a sustainable energy supply in the future. This booklet outlines how we can get there in three steps: clean cleaner cleanest. Paul van Gelder CEO Gasunie 3

4 The basis for sustainable practices 4

5 Natural gas: clean and efficient Natural gas (CH4) has such a simple physical composition that it provides the greatest amount of energy with the lowest emission of greenhouse gas, CO2. That s why it is by far the cleanest fossil fuel. Natural gas contains no sulphur and releases no fine particles on burning, unlike coal. In this way, natural gas makes a sizeable contribution to reduction in CO2 emissions and to improvement in air quality. A large proportion of the reduction in CO2 emissions in Europe over the last ten years can be attributed to the use of natural gas. Gas-powered plants are cleaner and provide more energy g Gas 1 GWh thermal energy 200 tonnes CO 2 Coal 1 GWh thermal energy 360 tonnes CO GWh electricity 0.45 GWh electricity Power for 106 homes Power for 132 homes A home that is supplied by a coal-fired power station causes double the CO2 emissions of a home that receives the same amount of power from a gas-fired power station. Gas also provides more electricity. 5

6 The Netherlands has a unique gas transport network Underground throughout the Netherlands lies a high-quality gas transport network comprising 12,500 km of pipeline: the distance from Amsterdam to Tokyo. Gas is pumped through this network daily to millions of users almost all homes in the Netherlands have a natural gas connection. The energy supply revolves around this stable focal point. This national gas transport network works like a gas roundabout, with international pipeline connections, storage facilities, installations for the delivery of liquefied natural gas and numerous other facilities. This guarantees the supply and distribution of gas until far into the future. Gas roundabout step 1: clean APX We are working very hard on the gas roundabout to take the next steps in making the energy supply more sustainable. 6

7 Efficient energy transport On a very cold day, the national gas transport system transports around 500 million m 3 of natural gas. That is an amount of energy that is equivalent to 200 railway wagons fully loaded with coal, every hour of the day. This type of transport would take up a huge area above ground. Gas transport is also safe and efficient. Where capital investment is concerned, transporting energy in the form of gas is almost twenty times more economical than in the form of electricity. Gas transport: economical, safe and invisible Gastransport: goedkoopst, veiligst en onzichtbaar Underground gas transport Economical, clean, simple, cheap and safe Energy transport above ground Slow, high impact on environment Electricity grid High investment costs, takes up a lot of land Energy transport via underground natural gas pipelines is the cheapest, safest and least damaging alternative for the environment. More than half the transport of energy in the Netherlands takes place silently and out of sight, underground. 7

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9 There s lots of natural gas available Natural gas is the backbone of the Dutch energy supply. 60% of the electricity output from power stations is generated by using natural gas. The Netherlands can count on its own natural gas until far beyond 2050, judging by current recoverable supplies. In the near future, new technologies will make it possible to recover even more gas, for example from the North Sea. This means that actual reserves are even more extensive. Moreover, the Dutch gas network is connected to huge global gas supplies, via various supply routes. The International Energy Agency indicates that reserves will last for another two hundred years for sure. Natural gas can therefore guarantee a stable energy supply for the long term Share of gas in the energy mix 2010 Oil 6% Coal 20% Biomass 5% Uranium 4% Wind 4% Sun 1% Natural gas 60% 60% of the energy for electricity ectr it production in 2010 camef from natural gas 9

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11 800,000 Bcm Estimated and proven gas reserves and consumption Estimated reserves 180,000 Bcm Proven reserves Consumption in ,300 Bcm 6,200 Bcm 700 Bcm 1,300 Bcm 54 Bcm World Europe Netherlands According to the International Energy Agency, proven and estimated gas reserves worldwide are sufficient for at least two hundred years 11

12 Energy transition up to

13 Natural gas is becoming increasingly greener Natural gas can be mixed with sustainable, certified green gas produced from biological waste such as kitchen and garden waste or residual waste from agriculture. Because the Netherlands already has such a robust natural gas transport network, green gas can be easily added to it and delivered nationally. By 2020, the proportion of green gas within Dutch gas deliveries may be as much as 5%. That is equivalent to the gas consumption of more than a million households. Green gas CO2- absorption Manure, kitchen & garden waste etc. Fermentation installation Introduction int gas network Delivery via national gas network Green gas is 100% climate neutral; it does not compete with food production. Green gas certificates guarantee its origin. 13

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15 Using energy more efficiently HEe halves the electricity bill Consumption for average household* HEe: a central heating system that also converts heat into power 1,200 1,000 total 2,200 per year Heat-power converter Gas Electricity city Electricity With HEe Heating 1,300 total 1,800 per year 500 Gas Hot water Gas Electricity *3,500 kwh electricity and 1,600 m 3 gas Technology is continually developing, making very efficient energy consumption possible. One example of this is the HEe boiler, an example of micro-chp, which supplies electricity in addition to heat. Any electricity generated that you do not need in your home yourself is delivered back to the network. When all homes have this type of mini power station running on gas, this will produce enormous energy savings. All the energy in natural gas will then be used to the full. 15

16 Climate objectives within reach By 2020, Europe aims to have reduced CO2 emissions by 20% compared to The Netherlands is also striving for 20% CO2 reductions by A combination of natural gas with new technology is the fastest, most economical solution. What s more, natural gas can make itself more sustainable in combination with green gas. kosten met gas Costs billion 96 billion Gas basis Commitment to efficiency, energy savings with a large proportion of green gas Electricity basis Commitment to a combination of wind energy, coal with partial CO 2 capture. The Netherlands can choose from different options to meet national and European climate objectives. Many investments are required along the whole chain if we are to grow into a more sustainable society, from the production of gas and electricity to its consumption by end users. 16

17 Working towards climate objectives with the help of gas as far as possible (gas-fired power stations, HEe boilers, cars powered by natural gas) will cost us the least investment. By choosing gas, we will save around 25 billion over the next twenty years compared to a situation in which we give priority to electric cars, nuclear energy and coal-fired power stations with CO2 capture. Moreover, solutions using gas are clearly technologically achievable. Gas roundabout step 2: cleaner HRE APX The gas roundabout is in position to introduce new forms of gas, such as green gas, and to make these available nationally. 17

18 Sustainable energy supply after

19 The proportion of green gas is increasing Soon it will also be possible to manufacture green gas in special, large power stations. The proportion of sustainable green gas may then rise to approximately 20% by 2030; by 2050 it may be as high as 50%, judging from the available quantities of biomass itself. Gas roundabout step 3: cleanest SMART GRID APX Gas is the backbone of a sustainable energy supply. 19

20 Gas in smart energy networks More and more frequently, energy is being generated by companies and households themselves. Homes have solar panels and small wind turbines as well as, increasingly, HEe boilers. Energy systems are becoming more and more interwoven. Computer technology puts consumers in a position of being able to handle their energy interactively and intelligently. So-called smart energy grids find smart ways to harmonise the supply and demand of heat, gas and electricity. In this way, all the available energy is utilised. Within these intelligent systems, gas also remains the stable basis that can balance out the peaks and troughs in demand. Smart grid Smartgrid Sustainable power station Supply can be quickly scaled up or down by using natural gas Opslag Storage Solar energy from companies, offices and homes Geothermal energy installations used by market gardeners Geothermal heat pump Wind turbines WKK W K CHP Micro-CHP Micro cro-c cro CH HP Digital market place placefor for supply and demand demand TAP Hybrid heat pumpmp pump CV P TEM KWH u BOD AAN G VRAA Electric car (storage) Smart meter: Connects appliances at low energy prices An intelligent energy network with several suppliers and an important role for natural gas. 20

21 Natural gas is part of the sustainable mix The energy supply from the sun and wind is sustainable but not always stable. The sun doesn t always shine and the wind doesn t always blow. But there is always a demand for energy. Natural gas will keep the energy supply stable. Natural gas power stations can react immediately, cranking up or slowing down supply according to demand. In this way, they can balance out peaks and troughs in the energy demand. Natural gas helps us to benefit from expensive sustainable energy in the best way possible Sustainable sources of energy may develop further in this way. Through its flexible position amidst all other types of energy sources, natural gas makes the energy transition possible and offers the consumer freedom of choice. Natural gas supports solar power and wind power Mon Tue Weds Thurs Fri Sat Sun Energy Energievr ievraag demand Supply from sun and wind Power stations running on gas that can be quickly scaled up or down supplement the energy demand Sun and wind only provide energy depending on the weather 21

22 22

23 This is how we see the future Over the coming years, Europe will rely increasingly on green gas and on gas reserves held by countries outside Europe. The Netherlands aims to fulfil a central role in this. As a gas roundabout, the Netherlands is becoming a logistical hub for the storage and transport of gas from different supply routes. This gives the Netherlands an independent position and makes a guaranteed energy supply possible. At the same time, gas opens up the potential for relatively quick and affordable sustainable practices. Greater efficiency and the increasing availability of green gas, solar power and wind energy means that the gas roundabout is becoming more and more sustainable. This forms a concrete vision for a long-term policy in order to make sustainable objectives a true reality. It is a challenging task for present-day policy-makers and, in particular, new generations, to get to work on. Gas is and will continue to be the logical partner for other sustainable energy sources: it s a clear task for natural gas. The clear task of natural gas 23

24 The clear task of natural gas N.V. Nederlandse Gasunie P.O. Box MA Groningen, The Netherlands March GUN UK

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