Four hypotheses for a secure and affordable supply of clean energy
We need more energy with lower emissions – and at affordable prices. Keeping our sights on all these goals simultaneously – and, what’s more, during a global pandemic – is one of the biggest political challenges of our times.
2021 will see key decisions that will define our energy policy line long-term: fleshing out the European Green Deal and implementing the strategies for hydrogen, sector integration and methane emissions. The gas industry also has to step up to the plate: Europe has decided to transform its economy. That means our industry must also change – and will. Business as usual is not an option. The future of energy is
climate-friendly, secure, and affordable.
But how can we resolve the conflicting interests of climate protection, energy security and affordability? What does society expect from policymakers? And what does the industry expect? Wintershall Dea has formulated four hypotheses.
#1: We need more gas in the energy mix – not less!
Renewable sources alone will not meet our growing energy needs in the foreseeable future. Phasing out nuclear power and coal will make the problem greater. A clever energy mix is therefore vital. Natural gas is a perfect partner across all sectors: In the heat and electricity markets, in the industrial and transport sectors. Natural gas pays off for citizens: It is produced without subsidies and has a low market price. The use of natural gas is socially acceptable. And it also pays off for the climate: For instance, replacing all outdated heating systems in Germany with efficient gas heating systems could save at least 30 million tonnes of CO2 annually. That is almost twice as much as Berlin emitted in 2020.
#2: We need to establish a hydrogen market now!
Markets do not come about on their own. They have to be set up and organised. Hydrogen has the potential to put the energy transition on the right track. To enable that, policymakers must now expedite the establishment of a stable market. How hydrogen is obtained is not crucial. What counts is that it is produced in a climate-neutral manner. And that it gets to where it is needed. Hydrogen produced from renewable sources is currently neither competitive nor available in sufficient quantities. Perhaps that is also why it is termed the “champagne” of the energy transformation: Champagne is a lot of things – but not affordable for everyone. Unlike clean hydrogen from natural gas: It will soon be reliably available and will definitely be affordable for all of us.
#3: For natural gas and hydrogen to be able to perform to their full ability, the general political conditions must be right!
Whether it’s natural gas or hydrogen – policymakers must set the right course now. A CO2 price alone is nowhere near enough. As we move towards a green energy supply, we need a balanced mix of measures and sources. We need a technology-neutral energy policy that does not rashly exclude any potential. We need planning security so that industry can finally initiate urgent major projects, such as converting large steel mills so that they run on clean hydrogen. And we need investment security.
#4: Unilateral strategic decisions endanger Germany and Europe as industrial locations!
Industry must become greener and reduce its emissions. That goes without saying. Gas is a vital component of that: The amount of industrial electricity generated from natural gas has almost doubled in the last ten years. It now accounts for 50 percent. Natural gas is and will remain the backbone of industry. The energy transition can only succeed if it takes into account the triad of security of supply, competitiveness (of industry) and social acceptance (for private households).
Our society faces a great challenge. Wintershall Dea is part of the solution. We have the mission and the technological expertise to help protect the climate with clean energy. We are committed to Europe’s climate targets and have presented an ambitious programme so that we can produce even more cleanly in the future. We will reduce our methane intensity to 0.1 percent by 2025. Our entire upstream activities are to be climate-neutral by 2030. Our next step will be to also reduce emissions from combustion of our products by using hydrogen and through CCS (carbon capture and storage).
Our appeal to policymakers is therefore: Create an energy market that has a viable future and is socially responsible. And rely on Wintershall Dea to make a contribution to that!