Biomethane and hydrogen production could save 217 billion euros

Natural gas will play an increasingly central and strategic role in the energy transition in Italy and Europe, both in supporting the growth of other renewable energy sources, and as a source of renewable energy itself, alongside biomethane and hydrogen.

According to a recent study conducted by the Gas For Climate consortium, a potential 270 billion cubic meters of biomethane and hydrogen could be produced by 2050, which could generate 217 billion euros in savings annually compared to an alternative decarbonisation scenario that does not take gas into account. This saving is mainly due to the maintenance of the gas infrastructure, which is expected to still have a valuable role by 2050, transporting biomethane and hydrogen. The European gas transmission and distribution (T&D) network consists of approximately 260,000 km of high-pressure network of which 200,000 km are operated (mainly) by transmission system operators (TSOs), plus approximately 1.4 million km of medium and low-pressure pipelines operated by distribution system operators (DSOs). Gas infrastructure ensures the reliability and flexibility of the energy system.

Cost savings per unit of energy are highest in the heating of buildings, where renewable gas is used combined with electricity by means of hybrid heat pumps, in buildings that are connected to gas grids today. Also, the use of renewable gas in electricity production generates significant energy system savings because it avoids costly investments in solid biomass power or even costlier battery seasonal storage.

Biomethane and power to methane can supply up to 1,170 TWh at strongly reduced costs, consisting of 1,010 TWh of biomethane and 160TWh of power to methane. Navigant’s analysis shows that by 2050 all biomethane can be zero emissions renewable gas, in the sense that any remaining life cycle emissions can be compensated by negative emissions created in agriculture on farms producing biomethane. Based on the assessment of potential biomethane cost reductions, production costs can decrease from the current € 70–90/MWh to € 47–57/MWh in 2050. These costs reflect large-scale biomass to biomethane gasification close to existing gas grids, as well as more local biomethane production in digesters.