Gas supply flexibility plays an increasingly important role in ensuring heat & electricity supply security, including in renewables-rich markets, where gas-fired power plants play a key back-up role.
Extreme weather events, together with the rapid expansion of weather-dependent renewables highlights the growing role of natural gas in ensuring energy supply security.
In the US, winter storm Heather drove up natural gas demand to an all-time high of 4 bcm/d at beginning of last year, as cold temperatures boosted space heating requirements by 70%, while the call on gas-based generation soared by 40% in just few days. Gas supply flexibility was primarily ensured through storage withdrawals.
In India, sizzling summer heatwaves drove up gas-fired powgen by around one-third though May-July 2024, as rising cooling needs boosted electricity demand.
Once again, gas-fired power plants played a key role in meeting higher electricity demand. incremental gas demand was largely met through flexible LNG procurements.
In Brazil, dry hydro conditions led to a steep decrease in hydro power output, which boosted gas-fired power output by nearly 600% between June and October of last year. Here, once again flexible LNG supplies were at the rescue, enabling gas-fired power plants to provide back-up to the power system.
And in Europe, the dunkelflaute episodes at end of last year, highlighted the intimate interplay between wind variability and gas flexibility. While wind power output plummeted, gas-based generation surged by 80% yoy in the first half of November to provide back-up. Gas storage sites played a key role in ensuring adequate gas supplies.
All these events highlight that besides the expansion of natural gas demand, there is also a qualitative change in its role: providing back-up in an increasingly complex and weather-dependent electricity system.
Hence, there is a need to carefully assess the investments required in the assets enabling flexible gas supplies, including gas storage and reserve mechanisms.
What is your view? How will the role of natural gas change in the coming years? How can natural gas support the integration of renewables, while contributing to a more secure energy system?
Source: Greg Molnar
