The Future of Ireland's Gas Industry

Ireland's Gas Industry at a Crossroads

The gas industry in Ireland is undergoing significant transformation as the country navigates the challenging path towards a low-carbon future while ensuring energy security and affordability. As a central pillar of Ireland's energy infrastructure, the gas network delivers energy to over 700,000 homes and businesses and provides approximately 30% of Ireland's primary energy needs.

This article explores the key trends, challenges, and opportunities that will shape the future of Ireland's gas industry in the coming decades, from regulatory changes to technological innovations and the evolving role of gas in the broader energy landscape.

Current State of Ireland's Gas Industry

Ireland's gas infrastructure is relatively young compared to many European countries, with the natural gas network first developed in the 1970s following the discovery of the Kinsale Head gas field off the coast of Cork. Today, the network spans over 14,000 kilometers of pipeline, connecting cities and towns across the country.

The majority of Ireland's gas supply now comes from external sources, primarily the Corrib gas field (which began production in 2015) and imports from the UK via interconnectors. This import dependency has increased following the depletion of the Kinsale Head field, which ceased production in 2020 after 42 years of service.

Key facts about Ireland's current gas industry:

• Natural gas provides approximately 30% of Ireland's primary energy
• Gas generates around 50% of Ireland's electricity
• Over 700,000 Irish homes and businesses use natural gas
• The Corrib gas field meets approximately 30% of Ireland's gas needs
• The remainder is imported via interconnectors with the UK

Key Challenges Facing Ireland's Gas Industry

1. Balancing Climate Commitments and Energy Security

Ireland has committed to ambitious climate targets, including a 51% reduction in overall greenhouse gas emissions by 2030 and net-zero emissions by no later than 2050. This presents a significant challenge for the gas industry, which must reduce its carbon footprint while continuing to provide reliable energy.

At the same time, energy security concerns have intensified, particularly in light of geopolitical tensions in Europe and the vulnerability of import-dependent countries. As the Corrib gas field continues to deplete, Ireland's reliance on imported gas is projected to increase, raising questions about supply security and price stability.

2. Infrastructure Investment and Maintenance

Maintaining and upgrading the existing gas network requires significant ongoing investment. As the network ages, additional resources must be allocated to ensure safety and reliability. Meanwhile, decisions about new infrastructure must balance long-term climate goals with medium-term energy needs.

The challenge is particularly acute when considering the potential "stranded asset" risk – investments in traditional gas infrastructure may not achieve their expected return if policy or technological changes accelerate the move away from natural gas.

3. Regulatory Uncertainty

The regulatory landscape for gas is evolving rapidly in response to climate imperatives. The EU's Green Deal, REPowerEU plan, and various national policies create a complex regulatory environment that gas industry stakeholders must navigate.

In Ireland, the moratorium on new data centers in the Dublin region (due to electricity capacity constraints) and ongoing debates about the role of gas in new building developments illustrate the type of regulatory changes that can significantly impact the industry.

Opportunities and Transformative Trends

1. Renewable and Low-Carbon Gases

Perhaps the most significant opportunity for Ireland's gas industry lies in the transition to renewable and low-carbon gases, which allow the existing gas infrastructure to be repurposed for a low-carbon future.

Biomethane: Produced through the anaerobic digestion of organic materials such as agricultural waste, food waste, and purpose-grown energy crops, biomethane is chemically identical to natural gas but renewable. Ireland's strong agricultural sector provides abundant feedstock for biomethane production, creating an opportunity for rural economic development alongside carbon reduction.

Gas Networks Ireland has set a target of 20% renewable gas in the network by 2030, with a gas injection facility already operational in County Kildare. The Central Statistics Office reports that Ireland produced over 30 million tonnes of agricultural waste in 2020, much of which could potentially be converted to biomethane.

Hydrogen: Hydrogen, particularly "green hydrogen" produced using renewable electricity, represents another significant opportunity. Ireland's abundant wind resources make it well-positioned for green hydrogen production.

The existing gas network could potentially transport hydrogen, either as a blend with natural gas (initially) or as 100% hydrogen in certain sections of the network in the future. Gas Networks Ireland is already conducting research on hydrogen blending, with plans to initially introduce up to 20% hydrogen into the gas network.

2. Storage and Flexibility Services

As renewable electricity generation increases, the need for storage and system flexibility grows. Gas infrastructure can provide these services, helping to balance the intermittency of wind and solar power.

The conversion of excess renewable electricity to hydrogen (through electrolysis) for storage in the gas network – often called "Power-to-Gas" – represents a promising technology for sector coupling, allowing energy to flow between the electricity and gas systems as needed.

Following the closure of the Kinsale gas storage facility in 2017, Ireland currently lacks large-scale gas storage capabilities. Developing new storage solutions, potentially for both natural gas and hydrogen, represents another opportunity for the industry to enhance energy security.

3. Carbon Capture, Utilization, and Storage (CCUS)

For natural gas to have a place in a net-zero future, carbon capture technologies will be essential. Ireland's offshore geology, particularly depleted gas fields like Kinsale, could potentially be repurposed for carbon storage.

While CCUS technology is still developing and faces economic challenges, it could allow continued use of natural gas for certain hard-to-abate sectors while capturing and storing the associated emissions.

The Changing Role of Gas in Ireland's Energy Mix

Gas and Electricity Generation

Natural gas currently plays a crucial role in Ireland's electricity system, providing both baseload power and the flexibility needed to complement variable renewable generation. As Ireland works towards its target of 80% renewable electricity by 2030, the role of gas in power generation will evolve.

Rather than providing baseload power, gas plants will increasingly serve as flexible backup for renewables, operating when wind and solar generation is low. This change in operating pattern – from consistent running to more intermittent use – presents both technical and economic challenges for gas-fired power stations.

In the longer term, these plants may transition to using hydrogen or biomethane, or incorporate carbon capture technology, allowing them to continue providing flexibility in a low-carbon electricity system.

Residential and Commercial Heating

The future of gas for heating in buildings is subject to ongoing debate. While heat pumps are being promoted as the primary technology for decarbonizing home heating, there are questions about their suitability for all building types, particularly older properties with poor insulation.

Renewable gases could offer an alternative pathway for decarbonizing heating in certain buildings, allowing continued use of existing gas boilers and infrastructure while reducing emissions.

The Irish government's National Retrofit Plan aims to upgrade 500,000 homes to a BER B2 rating by 2030, which will significantly reduce heating demand. However, the remaining energy needed for heating will need to come from low-carbon sources, potentially including renewable gases.

Industrial Energy Use

For certain industrial processes, particularly those requiring high-temperature heat, gas remains difficult to replace with current technologies. These "hard-to-abate" sectors, such as cement, glass, and certain food processing operations, may continue to rely on gaseous fuels in the medium to long term.

The challenge here is to transition these sectors to renewable gases or implement carbon capture solutions to minimize emissions while maintaining industrial productivity.

Regulatory and Policy Outlook

Several key policy developments will shape the future of Ireland's gas industry:

EU Policy Framework

The European Union's climate and energy policy, including the European Green Deal and the "Fit for 55" package, will significantly influence Ireland's approach. The EU's gas market decarbonization package, published in December 2021, includes measures to facilitate the uptake of renewable gases and prepare gas infrastructure for decarbonization.

National Energy Policy

The 2021 Climate Action Plan outlines Ireland's approach to reducing emissions across all sectors. For the gas industry, key elements include:

• Increasing the proportion of renewable gas in the network
• Ending new connections to the gas network for new homes from 2023
• Supporting research and development in low-carbon gas technologies
• Developing a policy framework for the development of anaerobic digestion

The upcoming Carbon Budgets, which will set binding limits on greenhouse gas emissions for different sectors of the economy, will also significantly impact the gas industry's decarbonization pathway.

Energy Security Considerations

In light of recent energy market disruptions, energy security has risen up the policy agenda. The National Energy Security Framework emphasizes the importance of diverse energy sources and the potential role of indigenous renewable gas production in enhancing security.

Innovation and Investment Opportunities

The transformation of Ireland's gas industry creates numerous opportunities for innovation and investment:

Renewable Gas Production

The development of biomethane production facilities presents opportunities for farmers, waste management companies, and energy producers. The SEAI estimates that Ireland has the potential to produce up to 13 TWh of biomethane annually from sustainable feedstocks, representing approximately 28% of current gas demand.

Hydrogen Technologies

Investment in electrolyzers for green hydrogen production, hydrogen storage solutions, and hydrogen-ready equipment for end-users represents another growth area. The EU aims to produce 10 million tonnes of renewable hydrogen by 2030, creating a significant market for hydrogen technologies.

Smart Gas Networks

The digitalization of gas infrastructure, including smart meters, advanced monitoring systems, and predictive maintenance technologies, will enhance efficiency and help integrate renewable gases into the network.

Hybrid Heating Solutions

Systems that combine electric heat pumps with gas boilers for peak demand could provide a transitional solution for decarbonizing heating while making optimal use of both electricity and gas networks.

Industry Response and Adaptation

Gas industry stakeholders in Ireland are already responding to these changes:

Network Operators

Gas Networks Ireland has published its vision for a net-zero carbon gas network by 2050, focusing on the gradual replacement of natural gas with renewable gases. The company is investing in research and pilot projects for biomethane injection, hydrogen blending, and network adaptations.

Gas Suppliers and Service Providers

Energy suppliers are increasingly offering "green gas" products and carbon offset options to customers concerned about emissions. Service providers, including FermeSovve Gas, are developing expertise in renewable gas technologies and hybrid systems to ensure they can support customers through the energy transition.

Industrial Users

Large industrial gas users are exploring options for decarbonization, including energy efficiency measures, process electrification where feasible, and the potential use of renewable gases or carbon capture technologies.

FermeSovve Gas: Preparing for the Future

At FermeSovve Gas, we're actively adapting to the changing landscape of Ireland's gas industry:

• Training our engineers in new technologies, including hydrogen-ready boilers and hybrid heating systems
• Advising customers on the most future-proof solutions for their heating and energy needs
• Participating in industry working groups on safety standards for renewable gases
• Monitoring policy developments to ensure our services remain aligned with Ireland's energy transition

Conclusion

Ireland's gas industry stands at a pivotal moment. While facing significant challenges from climate policy, regulatory changes, and competition from electrification, the industry also has opportunities to reinvent itself through renewable gases, system flexibility services, and innovation.

The transition will require substantial investment, policy support, and technological development. However, by embracing change and focusing on decarbonization, Ireland's gas industry can continue to play a valuable role in the country's energy system for decades to come.

The future is likely to see a more diverse, flexible, and integrated gas system – one that works in harmony with renewable electricity generation, utilizes indigenous renewable gas resources, and provides energy security while contributing to Ireland's climate goals.