End clap announced for natural gas
The multiannual energy program, which sets the course for France to achieve carbon neutrality by 2050, is clear as to the future of natural gas: “Natural gas is a fossil fuel which, at this title, should be removed from the 2050 energy mix ”. Along with reducing consumption, achieving this objective will necessarily have to go through the development of renewable gases. Biogas, biomethane, green hydrogen… decarbonisation efforts are pushing us to explore all avenues. If all these technologies are supported by an incentive policy (purchase prices, calls for projects, etc.), they are progressing in dispersed order.
Biogas is progressing at a relatively regular pace, in particular for its recovery in the form of electricity, which today represents most of the production units. But the number of sites injecting biomethane into natural gas networks is exploding. In just over a year, the number of installations has doubled. At the same time, vehicle natural gas (NGV), and its biobased equivalent (bioNGV) is becoming a real alternative to conventional fuels for heavy mobility and is attracting more and more carriers and mobility operators. As for renewable hydrogen, everything remains to be done. Its development is currently anecdotal but initiatives are multiplying. More than 120 projects are in the assembly or construction phase (source VIG'HY), with applications mainly in mobility.
Change scale
The future of these sectors rests on their price competitiveness. And for the moment we are not there. All the players are engaged in a speed race, fueled by the arrival of large energy companies, to massify their production and reduce their costs. The aim is to preempt the market and attract funds, especially grants. CRE anticipates more than € 500 million in aid for the injection of biomethane in 2021, ie double that of 2020. For carbon-free hydrogen, the national strategy provides for an envelope of € 7 billion by 2030.
The cost reduction margins are real in biomethane, but relatively narrow because the size of the installations is limited. The step is high and time is running out… before a possible turn of the screw. On the other hand, for hydrogen, the levers are much more important. The manufacture of an electrolyser has not yet entered the industrial phase and the race for gigafactory projects is on.
Risk of runaway
This financial windfall augurs promising opportunities for the multitude of players interested in these sectors. However, some ambitions could well be thwarted.
In biomethane, the outlook is very good. The 2023 targets will, in all likelihood, be greatly exceeded. But a scenario comparable to that of photovoltaics should not be ruled out. The boom and bustle phase of the market that we are currently experiencing could be followed by a sudden slowdown caused by a tightening of public support to limit the inflation of the budget envelope.
Regarding hydrogen, most prospects point to rapid and very significant development. Of course, it is an energy that has real environmental advantages and the support is massive. But the uncertainties and challenges to be overcome are also significant. Technically, carbon-free technologies are immature. They must prove themselves. Economically, carbon-free hydrogen is far from competitiveness. For some uses, especially for light mobility, hydrogen arrives late ...