Electrification and the future of Natural Gas...are you ready?



We at AIQUEOUS had a great time playing in the snow a couple of Sundays ago! We got up to four inches depending on the part of Austin, and the kids on my block (including my daughter) headed out for snowball fights and building snowpeople. (This is 2021, folks.)


Not surprisingly, my natural gas-fired furnace got a good workout last Sunday and the rest of this past week. And my natural gas-fired oven warmed the kitchen and the rest of the living space with the turkey we roasted Sunday afternoon--all of which was good news for Texas Gas Service, I’m sure.


AIQUEOUS as a company focuses on addressing climate change, and for those who haven’t yet had this debate at home, there is a big push to reduce or eliminate natural gas use at homes and buildings across the United States to cut U.S. carbon emissions--targeting space heat, hot water, and cooking. Instead of Texas Gas Service getting my business on a snow day, I would replace my furnace with a heat pump (I wouldn’t need a cold-climate unit), get a heat pump water heater, and replace my oven and range with an electric and induction unit, respectively.


Because Texas wind power capacity has been growing steadily and peaks at night, my nighttime electricity use would shift to a nearly zero-carbon source, Austin Energy would get more of my business, and I would be doing my part to combat climate change.


Right?


Why are some cities banning natural gas new buildings?

Energy-related carbon emissions in 2019 dropped by roughly 3% from 2018 (changes in 2020 are still pending but are estimated to be 10% lower than 2019). The majority of the drop from 2018 to 2019 – two-thirds of it – came from homes and buildings. None of that drop came from the “direct consumption of fuels used for heating [or] cooking”; all of it came from reductions in electricity use “and – more importantly – a decrease in the CO2 emissions per kilowatt hour (sic) of electricity consumed.” In other words, we are seeing reductions in carbon emissions from less carbon-intense sources of electricity, not from changes in the direct use of natural gas.


Combining these trends with increasing zero-carbon goals across the country, a number of municipalities are passing ordinances to ban natural gas in new construction. Berkeley, California is credited as the first to do so in 2019, and the map below shows – as of May 2020 – in which states local governments are pursuing similar bans. The primary goal of these bans is to shift energy use toward lower-, and eventually, zero-carbon sources of electricity.




Is “electrification” the way to zero carbon?

As with many things, the answer to that question is, “it depends.” If you want to lower carbon emissions by switching heating and cooking from natural gas to electricity, then you need to be able to: (a) provide enough heat with electricity, (b) afford to make that switch, and (c) have a source of electricity that emits less carbon than the direct use of natural gas. This Sierra Club map below highlights those states where improving heat pump technology, combined with hydro, wind, solar or nuclear power, can lower emissions relative to natural gas use. But this map – and remember this is a Sierra Club map – shows it’s not “one size fits all.”


Not surprisingly, the natural gas sector isn’t ready to pack its bags. Market analysts are quick to point out that full building electrification – not just new building stock but also existing building stock – faces “significant technical and economic hurdles.” As regulators are requiring natural gas utilities to invest in safety upgrades and distribution infrastructure, gas utilities are arguing that these costs should be repaid and not just by those who can’t afford to shift away from natural gas.



Can we afford electrification? (Can we afford not to?)

There is an awareness and concern that these carbon initiatives have the risk of increasing energy costs and energy burden on customers who can’t move to electricity and even, perhaps, those who do. Organizations such as Energy Efficiency for All are mapping out strategies to ensure social equity in the transition to a lower- or zero-carbon economy.


We do need to understand these consequences before we set them in motion. Shifting customers away from natural gas will raise prices for those customers who remain, and upgrading the electric grid to accommodate increased use could also increase electricity prices. Boston Consulting Group performed an analysis of the costs of electric grid upgrades for electric vehicles and found that, without careful planning, rates could increase by up to 12%. But, with thoughtful planning, new technology deployment and customer engagement, rate increases could be kept to 2% or less.


Ultimately, we need to remember that whatever investments we do not make to anticipate climate change impacts will instead be invested to mitigate consequences, and those investments are anticipated to be larger.


What can we do?

Whether at an energy utility, water utility, or as a customer of either, you need to evaluate your options and make an informed choice.


I’ve been living at my home for over 12 years, and I know that I’m nearing the end of my HVAC system’s useful life. I fall into the “best” category for the climate change benefits of electrification, so I am evaluating a conversion to a heat pump and heat pump water heater when I need a new system. Given that my wall oven unit just failed (and I am waiting for the repair contractor as I write this), I know that I’ll need to make a decision fairly soon. But the “added” cost of electrification will be minimal, if anything, given that I’ll need to replace my existing units already.


Here at AIQUEOUS, we invite you to “Learn More” by signing up for our upcoming webinar in February – we are planning sessions for both energy and water utilities on how to navigate this transition to lower-carbon economies and the options that you have available in terms of programs, technologies, and customer engagement. Please keep an eye out for those invitations in early February!


References

https://www.eia.gov/environment/emissions/carbon/


https://www.eia.gov/energyexplained/hydrogen/production-of-hydrogen.php


https://www.iea.org/reports/world-energy-outlook-2020/achieving-net-zero-emissions-by-2050


https://www.morningstar.com/articles/1017172/is-natural-gas-heating-going-the-way-of-buggy-whips


https://www.spglobal.com/en/research-insights/featured/path-to-net-zero


https://www.bbc.com/future/article/20200922-how-london-could-achieve-net-zero-carbon-by-2050


https://www.sierraclub.org/articles/2020/04/new-analysis-heat-pumps-slow-climate-change-every-corner-country


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