Gas in European decarbonisation pathways: future infrastructure challenges

Abstract

The European Union’s target to reach net-carbon neutrality by 2050 calls for deep changes to energy supply, including a sharp decrease in the consumption of natural gas. This master’s thesis evaluates the impact of carbon neutrality on the gas system, taking France and Germany as two case studies. It first identifies the gas trajectory in French and German decarbonisation scenarios, then explores the consequences of carbon neutrality on gas infrastructure and estimates the changes in methane price due to the increase in methane production cost and the decreased use of existing methane infrastructure. Our results show that gas supply and demand will radically change by mid-century, with biomethane, synthetic methane and hydrogen emerging as major energy carriers and input to industrial processes at the expense of natural gas. It appears that infrastructure planning is paramount to the achievement of carbon neutrality, all the while the issue of infrastructure is little addressed in decarbonisation pathways. A cost simulation is conducted taking two extreme cases for distribution network development. It suggests that methane price could increase up to 72% in France and 98% in Germany between 2030 and 2050 with the increase in methane production cost and in specific infrastructure costs.