August 2019, Vol. 246, No. 8

Spotlight on Utilities

Study Shows Natural Gas Crucial to Emission Reduction Goals

A study commissioned by Pacific Northwest-based distribution company NW Natural shows natural gas plays a pivotal role in helping the region safely meet emission reduction goals more affordably.

However, experts throughout the region have stressed that achieving an ambitious Washington state-proposed 80% carbon-reduction goal below 1990 levels by 2050 will be difficult and require efforts on several fronts.

Among the most significant of those fronts: Addressing emissions caused by producing electricity, which accounts for over 20% of Washington’s statewide total – 20 million metric tons of CO2. 

Not surprisingly, the study conducted by Energy and Environmental Economics (E3) found the most cost-effective route to achieving such a large-scale clean-up would be to eliminate all coal generation with a combination of renewables (11,000 megawatts) and natural gas generation (7,000 megawatts).

“Renewable natural gas takes waste streams that produce emissions and puts them to use as clean energy, dramatically reducing greenhouse gasses that contribute to climate change,” said NW Natural President and CEO David H. Anderson. “The good news is that we already have plans in place to put RNG into our pipeline system, which is one of the most modern in the nation.”

E3 also found that by increasing renewable natural gas injected into the existing system by 25% and delivering it directly to homes for heating needs, instead of using it to generate electricity, the region can achieve its climate goals without a large increase in the number of new power plants. 

Currently, NW Natural’s natural gas sales to residential and commercial customers account for about 5% of Oregon’s emissions. The company provides natural gas service to 2 million people in more than 140 communities in Oregon and Southwest Washington.

“With the innovations we’re already pursuing, like renewable natural gas, we are poised to play a vital role in helping the communities we serve meet their climate goals and achieve deep decarbonization,” Anderson added.

Separately, the report found banning construction of new natural gas plants would prove ineffective. Such a development would increase costs of the carbon-reduction effort by $1.2 billion a year, while total emissions would remain nearly unchanged because older plants would be forced to run more often – and far less efficiently.

NW Natural hired E3, in part, to answer the question of how its gas system can ensure reliable energy on the coldest winter days, while dramatically driving down greenhouse gas emissions over the next three decades. 

According to the research, significant new investments will be needed to address winter peak demand from electric space heating, including the expansion of the electricity system in the form of upgraded distribution systems, as well as winter peak capacity resources. 

In the scenarios addressing the transition to electric heat in buildings, the widespread deployment of electric heat pumps leads to between a fivefold to tenfold increase in the incremental amount of natural gas generation capacity needed by 2050, relative to the direct use of natural gas. This would equal 17,000 to 37,000 megawatts (MW) of additional peaking capacity required by 2050. 

For some of this winter peaking, gas-fired electric generation might be displaced by energy storage, demand response or technology innovation, E3 said. For the sake of comparison, the entire hydro-electric system in the Pacific Northwest represents about 33,000 MW of installed capacity. Ensuring winter peak reliability will be a key planning challenge to address, if building heating needs are increasingly electrified.

In one scenario, natural gas heat pumps are brought to market on a wide scale by 2025. These operate under similar principles as electric heat pumps and can achieve annual coefficient of performances (CoPs) of over 1.4 annually for space heating and 1.3 annually for water heating, without relying on electric resistance heating during extreme cold temperatures. 

E3 consulted with NEEA, a regional energy-efficiency organization working to commercialize the technology, to better understand the characteristics of natural gas heat pumps. One notable characteristic of NEEA’s preferred heat pump technology is that it is well suited to provide both space- and water-heating from a single system.

E3 concluded that in each scenario the Northwest electricity system must meet higher electricity demands due to population and economic growth demands, greenhouse gas constraints and electrification measures that increase electricity demands, particularly winter peak demands.

“Today, natural gas sales to our residential and commercial customers accounts for about 5% of Oregon’s emissions,” Anderson said. “With the innovations we’re already pursing, like renewable natural gas, NW Natural is poised to play a vital role in helping the communities we serve meet their climate goals and achieve deep decarbonization.” P&GJ

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