Most energy companies in Germany, Austria and Switzerland are planning to reduce investments in their gas grids, as nearly all have given up hope on using them for transporting hydrogen in a climate-neutral future, according to a survey by business consultancy Horvath cited by news magazine Der Spiegel.
“The assessment that gas networks will no longer play a central role in the future is becoming increasingly widespread,” the consultancy said in a report seen by the magazine. “Stagnation and decline prevail in the gas business.”
As Germany nears its 2045 net-zero deadline, fossil gas will have to be largely phased out. Theoretically, Germany’s gas grid could be repurposed to carry climate-neutral fuels such as biogas or so-called green hydrogen produced with renewable energy sources.
But these alternative fuels are expected to be prohibitively expensive and inefficient when it comes to heating buildings. More than 90 percent of the country’s gas distribution grids are set to become useless, experts have estimated.
Horvath surveyed 91 utilities in German-speaking countries, 65 percent of which said they wanted to cut gas grid investments in the coming years. 61 percent said they expected to significantly reduce or even decommission their gas networks by 2040.
Only four percent of respondents still see potential for completely converting gas pipelines to hydrogen, half of last year’s share in the annual survey. In contrast, two-thirds of survey participants plan to at least double their spending on electricity storage.
During Germany’s national controversy over how to transition to a climate-neutral heating less than three years ago, many firms still warned against writing off the future of gas pipelines, as they were hoping to use them for green hydrogen in a climate-neutral future.
Germany’s gas networks are almost 600,000 kilometres long and have provided operators with reliable income streams.
Germany is currently preparing rules that will enable local utilities to phase out gas grids as they plan for a climate neutral future, allowing them to cut off consumers without their consent if they are warned years in advance.
In contrast, two thirds of the companies are planning to at least double spending on battery storage. Utility association VKU said suppliers should be able to give customers a five-year notice of planned disconnections from the gas grid, instead of the ten-year minimum notice period currently planned.
A recent survey by sector association VKU found that 46 percent of municipal utilities and local energy suppliers didn’t know what will happen to their gas network.
The association surveyed more than 600 companies, and one fifth stated that they would fully decommission their gas networks and switch to district heating and heat pumps. Almost one in four municipal utilitiesintend to combine decommissioning and conversion to green gases such as hydrogen or biomethane.
Clean Energy Wire. Reproduced with permission.