Under the goal of "double carbon", the natural gas industry plans a new development path



Under the constraint of "double carbon" goal, natural gas, which has been committed to becoming the main energy of our country, is facing new changes in the development environment.

Although natural gas is a clean energy in fossil energy, it has no advantage compared to new energy in carbon reduction. Where will the industry go in the future?

At the recent natural gas industry development forum hosted by Sinopec, experts gave their opinions.

During the "14th Five-Year Plan" period, natural gas is still an important starting point for carbon emission reduction

China has proposed that carbon dioxide emissions should peak before 2030 and strive to achieve carbon neutrality by 2060. This means that the domestic energy industry will comprehensively transition to the clean and low-carbon direction, and the gradual replacement of fossil energy by non-fossil energy is the general trend.

As one of the main members of fossil energy, natural gas faces the challenge of carbon emission reduction on the one hand, and has the advantages of stability and cleanliness on the other hand.

At the forum, experts agreed that natural gas emissions of pollutants and carbon emissions are lower than coal, its past contribution to the environmental improvement of big cities deserves recognition.

"From the point of view of heating, Beijing's use of gas centers instead of coal-fired cogeneration units has effectively reduced urban pollutant emissions and achieved clean heating." Peking University energy Research Institute experts for example.

Many experts believe that before China's carbon peak, natural gas will still be an important starting point for carbon reduction in the domestic energy system.

"Under the 'double carbon' goal, natural gas is one of the main energy sources to replace coal and oil." As a 'bridge' between fossil and non-fossil energy sources, consumption of natural gas is likely to peak around 2040." Tian Lei, a researcher at the China Academy of Macroeconomic Research, said.

Bai Jun, vice president of Beijing Gas Research Institute, believes that natural gas is the only fossil energy with greater growth potential in China. During the "14th Five-Year Plan" period, natural gas can basically achieve inertial development, and the demand for gas will maintain a certain growth rate.

The data released by the relevant ministries also confirms the above judgment to a certain extent. According to Li Fulong, director of the Development Planning Department of the National Energy Administration, in the first half of this year, China's natural gas market demand was strong, with a year-on-year growth of 21.2%, an increase of 23.5% over the same period in 2019, and an average growth of 11.1% over the same period in two years, basically reaching the average annual growth level of the "13th Five-Year Plan".

Supporting the large-scale development of new energy will become an important option for the natural gas industry

In terms of future development direction, experts believe that supporting the large-scale development of new energy will become an important option for the natural gas industry.

At present, China is building a new power system with new energy as the main body, and in the future, with the access of new energy power sources with a large proportion of volatility, China's new energy consumption and power system peak adjustment will face greater pressure.

According to experts from the Energy Research Institute of Peking University, as of the end of 2020, the penetration rate of new energy generation in China has exceeded 9%, when the penetration rate of new energy generation reaches more than 10%, the adjustment capacity and flexibility of the existing power system will be difficult to meet the needs of stable operation of the system, and the flexibility of the system including source, network, load and storage should be improved.

"The unit carbon emission of gas power is about 50% of that of coal power, and it is an important option for peak power supply." Tian Lei said that under the "dual carbon" goal, natural gas can become an important support for the construction of a new power system with new energy as the main body.

In this context, Dong Xiucheng, executive director of the China Institute of International Low Carbon Economy at the University of International Business and Economics, believes that there is a certain development space for the downstream utilization of natural gas industry in the later stage, but it may gradually move toward power generation as a regulator for the safety and stability of power grid operation.

Taking into account the characteristics of the current development of China's natural gas industry, experts from the Energy Research Institute of Peking University expect that in the future, China's new gas and electricity will focus on the west-east gas transmission along the region, as well as the central and eastern coastal areas with high price endurance and good gas source implementation.

In addition, Tian Lei believes that the hydrogen energy route based on renewable electricity will play an important role in the future industrial, transportation and power generation sectors, which is also an important condition to support the future development of non-fossil energy and the continuous improvement of the level of electrification. Hydrogen production from natural gas is the lowest carbon emission of fossil energy hydrogen production process, has a unique advantage in leveraging hydrogen energy utilization, and has the potential to become the priority support for cultivating hydrogen energy industry chain.

There are still problems to be solved in the development of natural gas industry under the goal of "dual carbon"

It is worth noting that experts pointed out that under the "dual carbon" goal, the natural gas industry to achieve considerable development, there are still some problems to be solved.

In terms of price, the cost of gas electricity generation is still high, which may hinder the development of the industry to a certain extent.

The reporter learned from the forum that at present, the electricity price around our country is about 2.2 to 2.7 yuan per cubic meter, at this gas price level, the power generation cost of gas-fired power plants in typical areas of our country is about 0.56 to 0.58 yuan per KWH of electricity, of which the fuel cost accounts for about 70% to 75%.

"Due to the relatively high on-grid price of gas electricity, the number of power generation hours during the 13th Five-Year Plan period was only maintained at a low level of 2,600 to 2,800 hours." Peking University energy research Institute expert said.

In terms of supply, according to experts, China's natural gas is highly dependent on foreign countries at present. "The natural gas industry should take the initiative to increase supply, reduce costs and raise prices." Bai Jun said.

At the policy level, the reporter noted that for the problems existing in the natural gas industry, the relevant departments are also taking multiple measures to promote solutions.

Recently, the National Development and Reform Commission issued the "Natural Gas Pipeline Transportation Price Management Measures (Interim)" and "Natural Gas Pipeline Transportation Pricing Cost supervision and Examination Measures (interim)", which marks the formal landing of the new method of pipeline transportation price management.

"Pipeline transport is a key link between upstream supply and downstream consumption. The new measures will help promote fair and open pipeline transport services, open and transparent fees, facilitate the effective connection and fair competition of upstream and downstream market players, and promote the flow of natural gas resources." Bai Jun said.

In terms of increasing natural gas supply, the National Energy Administration recently organized a meeting to vigorously promote oil and gas exploration and development in 2021. The meeting stressed that it is necessary to continue to increase the intensity of oil and gas exploration and development and investment, actively cultivate new driving forces for oil and gas storage and production, and form a strong synergy of all aspects to jointly support oil and gas storage and production.

Bai Jun suggested that in the next step, China should also speed up the construction of energy market systems such as power spot market and auxiliary service market, so that the value of flexible peaking power sources such as gas and electricity can be truly reflected in the transaction price; Make good use of both domestic and foreign markets, expand natural gas supply channels in various ways, and increase support for the development of unconventional natural gas such as biological gas.