How to cross the desert
16 Jun 2021 - ConferenzaGNL
by Diego Gavagnin
The G7 which ended a few days ago confirmed the ambitious objectives that the democratic market economy countries have set for the containment of climate change by 2050. Trying to interpret the final statement and also the words of Prime Minister Draghi, the greatest attention is seems to have been given at the intermediate stage of 2030.
And it can only be so, in a rational approach. After that, it is difficult to imagine such a development of new energy carriers, primarily the “all-electric” or hydrogen, capable of guaranteeing the objectives set for nine years from now. The Commission itself predicts that by 2050 hydrogen will cover no more than a quarter of European energy consumption.
The pragmatic approach mainly concerns transport, the sector that certainly must be attacked first, because its proportional weight on the total emissions that must be abated by 2030 is great.
There are huge incentives at European level for the development of new carriers. There is great euphoria. It is unclear who and how here in Italy “will direct the traffic”, to avoid the waste we have witnessed in recent years and which we still pay in the bill for incentives for renewable sources, which could have had the same development with much lower costs.
In any case, it is more necessary than ever to clarify the distinction between incentives and subsidies. We cannot imagine the new “net zero” economy paid at the bottom of the list. Beware of state “dirigism”, said Draghi, if we understand his words. And there are those who spoke of “crossing the desert” for the next few years.
So, without abandoning dreams, aspirations and rational forecasts, the first shower of reality that must be done is to look at how the market is moving, to see and analyze the free choices of private investors, who by definition do not like to throw money away. as it is much more likely that those who use the money of others (ours) do and do not risk going bankrupt.
Here we refer to companies, especially small and medium-sized private companies, which in recent years have chosen LNG as a fuel for heavy sea and land transport, as well as for powering isolated industries and networks, far from gas pipelines. All of them, more or less, also look to electricity, hydrogen, ammonia and whatever else scientific and technological research will be able to make available under comparable price and logistics conditions.
In the meantime shipowners, transporters and distributors continue to order LNG ships, where a real boom is underway, LNG trucks, to build service stations and to work out how to get the raw material, for example not yet available in Italy. In the silence of the “big” press and national politics, the first Italian LNG coastal depot came into operation in recent days, which had to be supplied from Croatia.
Overwhelmed by the enthusiasm for the new advancing, natural gas has become a dirty word. Even at the level of European institutions, the use of methane to replace coal-fired plants is now being contested, even though there is no credible alternative (unless there is a great return of nuclear power). In passing, someone reported days ago that photovoltaic modules made in China, which dominate the world market by price, exploit electricity production from coal …
Are those who insist on investing in LNG crazy? No. Only rational. Whatever the regulations for the next few years, whoever will be the decision maker cannot fail to acknowledge that the first candidate for zero emissions is precisely liquid methane. Not only because the race to replace it with bioLNG has begun, with synthetic gas (hydrogen plus carbon dioxide) which allows the use of existing infrastructures and the use of LNG fuel cells.
Even more than all this, investors are aware that those who know how to make and use LNG well are on the right track to then be able to integrate or replace it with everything else. It is no coincidence that the first most significant hydrogen trials are found in the Baltic and Scandinavian countries, which chose LNG as a marine fuel ten years ago.
The case of the Piedmont (Italian region) environmental management company is significant. After years of experimenting with the collection of waste with electric vehicles, it decided to switch to LNG. It is with this approach that you can also cross the desert.