ofgem golden age of gas 2 july 2014
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Biomethane, CNG for Trucks and Shale Gas
2 July 2014
John BaldwinManaging DirectorCNG Services Ltd
The Golden Age of Gas
http://www.goldenageofgas.com/
The Golden Age of Gas (1)
1. CNG Services Ltd
2. Biomethanea) CO2 Removal Technologies & CV increase
b) Grid Entry Rules
c) Project Review
d) Green Gas Certificates
e) UK Market forecast
f) Biomethane Conclusions
The Golden Age of Gas (2)
3. CNG for Trucksa) Market for gas
b) Trucks
c) Benefits of the LTS
4. Shale Gasa) Extended Flow Tests
b) Building on biomethane
c) Proximity to Gas Grid
5. Conclusions
CNG SERVICES LTD
CNG Services Ltd
• Supports projects to inject biomethane into the gas grid– Didcot, Poundbury, Vale Green,
Stockport, Doncaster, Minworth, ReFood Widnes etc.
• Bio-CNG as a fuel for trucks– Own UK’s largest CNG filling
station– Sell Bio-CNG (20% biomethane)
• Support onshore gas developments
We work on innovation in natural gas
BIOMETHANE
Biogas Composition
• Methane 55 - 60%
• CO2 35 - 40%
• O2 0.1 – 0.4%
• N2 0.4 – 1.6%
• H2S 200 – 2,000 ppm
• H2O Biogas is saturated with water
• Siloxanes Typically present in sewage derived biogas
To get biomethane into the grid, need to remove all H2S,
most CO2 and dry the gas
Water Wash
• 99% of biomethane goes into grid, <1% methane slip
• 14 - 16m high towers
• Plant also removes H2S and siloxanes
• 3 suppliers active in UK
• Proven and low risk
• 3 variants now in UK
• Two stage with CO2 liquefaction (Haffmans , Springhill Nurseries)
• Two stage with RTO device to burn off 2% CH4 in off-gas (Air Liquide, Future Biogas, Doncaster) – now Air Liquide offer 4 stage with no RTO
• Three stage with <0.5% CH4 vented (DMT, Methapower, Envitec, MT-Energie))
• Well suited to plants with <1,000 m3/hr biogas flow rate
Membrane Separation
Chemical Absorption
• 99.8% of biomethane to grid, <0.2% methane vented
• Needs significant heat to raise steam to recover chemicals and hence good fit if excess heat available from biogas CHP
• Less electricity required
• Requires less propane as less CO2 remains
• 2 suppliers in UK though only 1 active (Purac, Crouchlands Farm)
• More expensive and complex than water wash and membrane
UK Suppliers
• Water Wash– Malmberg
– Chesterfield Biogas
• PSA– Schmack Carbotech
• Chemical Wash– Purac Puregas
• Membrane– Air Liquide
– DMT
– Envitec
– MethaPower
– MT Energie
– Pentair Haffmans
Propane Enrichment Propane mixing unit
Propane storage tanks
• The Gross Calorific Value (GCV) in the GB gas grid is 38.8 – 39.5 MJ/m3
• Typical biomethane GCV is 37 MJ/m3 (CH4 with 2% CO2/N2/O2)
• Enrich to Flow Weighted Average CV
• Typically 10% propane by energy, cost penalty of 2- 3 p/kWh
Gas Quality and CV Measuring Equipment
• Biomethane treated same as gas going from NTS into LTS
• This has no quality monitoring, just CV
• Biomethane projects measure all safety components
• GS(M)R
• NTS to LTS “Letter of Direction” not appropriate, adds cost and complexity, no consumer benefit (gas enriched to FWACV)
• Highly complex system for communicating data to Xoserve
• Work underway to develop simpler regime, reduce costs, promote competition
Didcot – UK’s First BtG Project
Biogas upgrader
Propane StorageGas bag
Energy & quality Measurement
Propane Injector
Telemetry
H2S and
Siloxane filters
Flow of biogas - 100 m3/hr
First gas to grid on 3rd Oct 2010
Anaerobic
Digesters
Poundbury
• UK’s first commercial project
• Membrane CO2 removal plant
• Gas injected into 2 bar grid
• 500kWe CHP
• Development is a JV between Duchy of Cornwall and some of its tenants
• Achieving 98% availability
Prince Charles opened the project in Nov 12Flow of biogas – 500 m3/hr
First gas to grid – October 2012
Vale Green 1
• Hybrid Membrane and Cryogenic CO₂ separation plant
• Separated CO₂ used to grow more tomatoes
• 75% gas to grid with a 490kWh CHP
• 7 bar gas grid
Flow of biogas – 600 m3/hr
First gas to grid – August 2013
Future Biogas - Doncaster
• Agricultural feedstock
• 80% gas to grid
• 499 kWh CHP
• Membrane CO2 removal plant
• 7bar gas grid
• First project in National Grid area
Flow of biogas – 900 m3/hr
First gas to grid – October 2013
ReFood Widnes
• Food waste feedstock
• 100% gas to grid
• Water-wash CO₂ removal plant
• 1bar MP gas grid
Flow of biogas – Estimated 2,000 m3/hr
First gas to grid – Q2 2014
• Is there a better gas to grid project on Planet Earth? Probably not….
Severn Trent Water Minworth
• Sewage feedstock
• 20% gas to grid – with existing 7MW CHP
• Water-wash CO₂ removal plant
• 20 bar LTS grid
• Blending allowed so minimal propane
Flow of biogas – Estimated 1,200 m3/hr
First gas to grid – Estimated Q2 2014
REAL Green Gas Certificate Scheme
• Designed to allow ‘tracking of biomethane from injection point to customer’
• Integrity - no ‘double counting’
• Separate from the gas to provide flexibility
• Can only be used once
GGCS is the UK’s Not for Profit Green Gas Certificate scheme
Barrow Shipping
AD DeveloperOrganicMaterial
Gas Distribution
Network
‘Certificates’
Normal grid gas
Purchase of biomethane
energy
Inject gas into grid
Processing via Anaerobic Digesters
CNG Services and Barrow Shipping Ltd
Clean-up plant and grid injection
Gas can be used to fuel
trucks on CNG
Sale of CNG in Crewe
CreweCustomers
8 Projects signed up with Barrow Shipping and REAL GGCS
Brit European
• Provide transport services for JCB
• Run 36 dual fuel diesel-CNG trucks
• Purchase Green Gas Certificates to demonstrate gas sourced from UK organic feedstock
Biomethane projects per year 2010-2015
Could have over 60 projects before 2016
19
1 12
4
25
43
0
5
10
15
20
25
30
35
40
45
50
2010 2011 2012 2013 2014 2015
ProjectsProjects per Year Speculative Cumulative
Annual Biomethane to Grid and RHI for 2012-2015
Biomethane to grid may be largest RHI technology
£778,719£4,510,803
£60,717,023
£156,412,959
£0
£20,000,000
£40,000,000
£60,000,000
£80,000,000
£100,000,000
£120,000,000
£140,000,000
£160,000,000
£180,000,000
0
1
1
2
2
3
2012 2013 2014 2015
TWh/annum Annual RHI
Total TWh per annum RHI per annum
Benefits - CO2 Impact
• Forecast 1.8 TWh injected into gas grid in 2015
• 130,000 tonnes of gas
• 130 x (44/16) = 360,000 tonnes of CO2 saved at the burner tip
• Marginal gas to UK is Qatar LNG
• The 130,000 tonnes of biomethane displaces 130,000 tonnes of LNG– 15% higher CO2 than UKCS gas on a “Well to Tank” basis
– 7-9% CO2 vented in Qatar
– So around 50,000 tonnes on top
• So, around 400,000 tonnes/annum benefit
• Material contribution towards 2020 renewable energy targets
Benefits – Using the Gas Grid
• UK has great gas grid– 85% of domestic market connected to
grid
– 95% of industry
– Power generation back up to wind
• To build gas grid and central heating etc would cost around £100 billion
• Vital UK asset
• All our Grid Owners are very supportive and have created an attractive regime to allow projects to go ahead at lower cost/quicker
Proportion of Projects in Each Feedstock Category
GGG Feedstock Category Number projects in Category %
Sewage Sludge 6 10%
Agricultural 29 49%
Food Waste 13 22%
Industrial Food Processing 9 15%
Biodegradable 2 3%
Unknown 0 0%
Total Projects 59
Sewage Sludge Agricultural
Food Waste Food Processing
Biodegradable
Biomethane Market Forecast
• UK total gas demand now is around 800 TWh/annum• Around 50% domestic heating, 25% power gen and 25% industry
• Stretch maximum biomethane by 2030 is around 20 TWh
• For heat in cities there are few practical/economic alternatives• Biomass (air quality), heat pumps (do not work in very cold weather), district heating (too
late to dig up cities)
Biomethane to Grid Conclusions
• It has taken 6 years but the regime looks good:
• Over 50 projects in next 3 years is possible, all technologies
• Majority of biomethane from waste feedstock
• Around 2 TWh in 2015
• UK total gas demand 700 TWh
• 130,000 tonnes of LNG not imported
• Focus on reducing capital costs
• Grid Entry Unit costs reduced by 50% in last 5 years
• New processes being developed for high pressure connections
• 7 active biomethane equipment providers in UK – competition
• Membrane plants have potential to be significantly lower cost
UK biomethane market growing fast, delivering significant benefits and helping meet 2020 renewable energy targets
CNG FOR TRUCKS
HGV Sector Provides Best Opportunity for CNG
Cars are not the target for natural gas – trucks relatively few in number, limited other options, use a lot of diesel and cause significant GHG emissions
Fuel options in each sector
32
Dual Fuel
• Dual fuel trucks are available• Hardstaff/Mercedes Benz
• Clean Air Power/Volvo
• Prinz/DAF/MAN/Mercedes Benz
• Euro 5 dual fuel a good way to start a shift to CNG
Dedicated CNG – 340 bhp
Dedicated CNG tractors are coming….first 5 in UK in autumn 2014
Dedicated CNG – 400 bhp
Expected to give 20% lower CO2, very low NOX and particulates50% less noise
• Entry for Niche Vehicle Competition (3rd July 2014)
• Dedicated CNG Kenworth with Cummins 12 litre gas engine
• Trial in UK (CNG/LNG)
• Low noise ideal for moving shale gas waste water
UK Gas SystemLocal Transmission System
LTS is a vital national asset - ideal for CNG – it would cost >£15 billion to build NTS/LTS – these assets can help reduce diesel demand and reduce
CO2 from trucks
Benefits of Using LTS
• Lower pressure lifto Reducing electricity used in compression
o Reduces number of stages of compression from 5 to 2
• Higher flow rateso Compressors run for less time, lower maintenance
o Very high capacity per CNG station
• No leakage of gas in LTSo Higher pressure grids made with Carbon Steel pipes
• Dry Gaso No gas drier needed
The 6,000 km of 20 – 35 bar LTS means that 95% of major UK distribution centres are within 2 km of the ideal energy source is a vital national asset
Energy Used in Compression
As the grid (inlet) pressure increases the electricity used in compression decreases and higher flow rates of above 2,000m3/hr are possible which
reduces the running hours of compressor and/or provides very high capacity
CNG Conclusions
• OEMs now making trucks that run on natural gas• Dedicated - Scania
• Dual fuel - Hardstaff, Clean Air Power, Prinz, G-Volution
• Gas Distribution Networks supportive• Great gas grid
• Oil – gas price differential• Never been as large as today - gas 25% of cost of oil on an energy basis
• CNG-diesel duty differential • Fixed for 10 years
• CNG very good for depot based distribution
• Shale gas may be abundant and low GHG
UK set for growth in CNG for Trucks
SHALE GAS
UK Oil Production and Demand 1990 - 2020
UK oil production UK oil demand
This is the Elephant in the room......Question - How does UK plc afford this extra import bill of around £40 billion/year
DECC forecasts that by 2025, UK will be importing around 1 millionbarrels of oil per day, almost all for road transport
Answer – Don’t Import It!
BGS say that Bowland alone gas resources could be 1,500 TCF - assume 10% recoverable = 3 TCF (84 BCM)/annum for 50 years
(UK annual demand around 80 BCM)
Lancashire 350 million years ago
Imagine an inland sea where Preston is today...... is this going to be one of the 10 largest gas fields on planet earth?
A bit of the gas leaked out and was captured in a different strata ....we call this gas “South Morecambe” – our largest gas field to date, mostly produced
Bowland shale at 4,000 feet thick
Most US shale at 300 feet thick
Morecambe Gas
• In 1973, Gulf (now part of Chevron) drilled through the South Morecambe gas field– They said it was dry….
• John Bains of British Gas looked at the logs and identified 600 feet of pay!– Clever chap
• Probably the single most important event in the history of Centrica, BG Group and National Grid
• 172 BCM of gas = 69 billion therms• Worth £50 Billion at today’s gas prices• Key to UK energy from 1985 - 2000
I was a graduate trainee on South Morecambe commissioning...with hindsight the whole of Morecambe was just an early indication of the shale
gas available in Lancashire.....
Largest Gas Fields
Who knows where Bowland shale will fit?
Bowland shale may be oneof largest gas fields onearth
Injecting gas from onshore production into
the gas grid?
• Wytch Farm• Biomethane• Never been done to NTS
Wytch Farm
Gas Distribution Network – for Extended Flow
Tests
• Used for biomethane• Flows of 3,000 m3/hr likely (equal to around 9 million th/annum)
National Transmission System – for LNG
Displacement Flows• For large volumes
The NG 2012 Ten Year Statementshows the decline in flows from StFergus, Teesside, Barrow:http://marketinformation.natgrid.co.uk/Gas/CapacityReports.aspx
By far the best place in UK to find shale gas is under Lancashire – NTS capacity available
Capacity in the NTS
Gas Quality Requirements
• Gas Safety (Management) Regulations set out gas quality, basic parameters for shale gas producers are:
– No H2S
– Dry gas
– Wobbe within a range
– Total inerts (CO2/N2) limit (7%)
• North Morecambe, for example, has high N2 and has to liquefy methane to reduce the N2
• Shale gas may be like Southern North Sea gas?
• NTS Network Entry Agreement has no restriction on Calorific value
• GDN entry may need enrichment with propane or blending (level of ethane and inerts is key) due to increase in grid average CV in last 30 years due to decline in Southern North Sea gas and replacement with high CV Norwegian gas and LNG
The key cost issues are high levels of H2S, CO2 and N2
Shale Gas GHG compared to LNG
Lancashire shale likely to be 30% lower GHG compared to LNG
Shale Gas Conclusions
• Location:
– NW in particular is very attractive for gas due to existing gas grid, capacity available
– Developments can be quicker than people think
• Gas Quality:
– Probably straightforward
• UK regime for gas injection is good, getting an NTS or lower pressure connection is unlikely to be critical path
• Biomethane market is perfect model for Extended Flow Tests, start to finish in less than a year
• Shale gas into NTS, then out of LTS to run trucks - perfect
We have waited 350 million years, we are ready!
GOLDEN AGE FOR GAS
Conclusions
• Low GHG Options– Biomethane
– Bio-SNG
– Power 2 Gas
– H2
• Shale Gas– Qatar LNG pays no tax, Lancashire gas likely to pay 60% tax
– 30% lower GHG
– Jobs
• CNG for Trucks– Use LTS, shale gas, biomethane
– Lower GHG, improved air quality, low noise
The Golden Age for Gas – without it, you can’t have wind/solar