IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v126y2019icp480-493.html
   My bibliography  Save this article

Is there a future for the gas network in a low carbon energy system?

Author

Listed:
  • Hickey, Conor
  • Deane, Paul
  • McInerney, Celine
  • Ó Gallachóir, Brian

Abstract

This paper evaluates the potential low carbon opportunities for and challenges to the utilisation and financial performance of Ireland's gas distribution network within a series of low carbon scenarios. There has been a limited amount of academic literature published on the future implications of gas demand on gas networks. This paper takes the unique perspective of assessing the stranded asset risk to a utility operating a gas network in the context of a low carbon energy system. Building on established emissions reduction scenarios, a financial model is developed from an integrated energy system model to understand the financial risks associated with continued investment in gas networks. We find that higher network tariffs are required for consumers in the future to cover network costs, even though gas consumption grows relative to current consumption levels in low carbon scenarios with carbon capture and storage.

Suggested Citation

  • Hickey, Conor & Deane, Paul & McInerney, Celine & Ó Gallachóir, Brian, 2019. "Is there a future for the gas network in a low carbon energy system?," Energy Policy, Elsevier, vol. 126(C), pages 480-493.
    • Handle: RePEc:eee:enepol:v:126:y:2019:i:c:p:480-493
    DOI: 10.1016/j.enpol.2018.11.024
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S030142151830747X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2018.11.024?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Chignell, Simon & Gross, Robert J.K., 2013. "Not locked-in? The overlooked impact of new gas-fired generation investment on long-term decarbonisation in the UK," Energy Policy, Elsevier, vol. 52(C), pages 699-705.
    2. Chiodi, Alessandro & Gargiulo, Maurizio & Rogan, Fionn & Deane, J.P. & Lavigne, Denis & Rout, Ullash K. & Ó Gallachóir, Brian P., 2013. "Modelling the impacts of challenging 2050 European climate mitigation targets on Ireland’s energy system," Energy Policy, Elsevier, vol. 53(C), pages 169-189.
    3. Unruh, Gregory C., 2002. "Escaping carbon lock-in," Energy Policy, Elsevier, vol. 30(4), pages 317-325, March.
    4. Hausfather, Zeke, 2015. "Bounding the climate viability of natural gas as a bridge fuel to displace coal," Energy Policy, Elsevier, vol. 86(C), pages 286-294.
    5. Dodds, Paul E. & McDowall, Will, 2013. "The future of the UK gas network," Energy Policy, Elsevier, vol. 60(C), pages 305-316.
    6. Duffy, David & McQuinn, Kieran & Morley, Ciara & Foley, Daniel, 2016. "Quarterly Economic Commentary, Summer 2016," Forecasting Report, Economic and Social Research Institute (ESRI), number QEC20162, march.
    7. Anandarajah, Gabrial & Strachan, Neil, 2010. "Interactions and implications of renewable and climate change policy on UK energy scenarios," Energy Policy, Elsevier, vol. 38(11), pages 6724-6735, November.
    8. Richard Loulou & Maryse Labriet, 2008. "ETSAP-TIAM: the TIMES integrated assessment model Part I: Model structure," Computational Management Science, Springer, vol. 5(1), pages 7-40, February.
    9. Leung, Dennis Y.C. & Caramanna, Giorgio & Maroto-Valer, M. Mercedes, 2014. "An overview of current status of carbon dioxide capture and storage technologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 39(C), pages 426-443.
    10. Jos� I. Mu�oz & Derek W. Bunn, 2013. "Investment risk and return under renewable decarbonization of a power market," Climate Policy, Taylor & Francis Journals, vol. 13(sup01), pages 87-105, March.
    11. Tietjen, Oliver & Pahle, Michael & Fuss, Sabine, 2016. "Investment risks in power generation: A comparison of fossil fuel and renewable energy dominated markets," Energy Economics, Elsevier, vol. 58(C), pages 174-185.
    12. McGlade, Christophe & Pye, Steve & Ekins, Paul & Bradshaw, Michael & Watson, Jim, 2018. "The future role of natural gas in the UK: A bridge to nowhere?," Energy Policy, Elsevier, vol. 113(C), pages 454-465.
    13. Gross, Robert & Blyth, William & Heptonstall, Philip, 2010. "Risks, revenues and investment in electricity generation: Why policy needs to look beyond costs," Energy Economics, Elsevier, vol. 32(4), pages 796-804, July.
    14. Assoumou, Edi & Maïzi, Nadia, 2011. "Carbon value dynamics for France: A key driver to support mitigation pledges at country scale," Energy Policy, Elsevier, vol. 39(7), pages 4325-4336, July.
    15. Duffy, David & McQuinn, Kieran & Foley, Daniel, 2016. "Quarterly Economic Commentary, Autumn 2016," Forecasting Report, Economic and Social Research Institute (ESRI), number QEC20163, march.
    16. Paul Simshauser, 2014. "The cost of capital for power generation in atypical capital market conditions," Economic Analysis and Policy, Elsevier, vol. 44(2), pages 184-201.
    17. Chiodi, Alessandro & Gargiulo, Maurizio & Deane, J.P. & Lavigne, Denis & Rout, Ullash K. & Ó Gallachóir, Brian P., 2013. "Modelling the impacts of challenging 2020 non-ETS GHG emissions reduction targets on Ireland′s energy system," Energy Policy, Elsevier, vol. 62(C), pages 1438-1452.
    18. Das, Anjana & Rossetti di Valdalbero, Domenico & Virdis, Maria R., 2007. "ACROPOLIS: An example of international collaboration in the field of energy modelling to support greenhouse gases mitigation policies," Energy Policy, Elsevier, vol. 35(2), pages 763-771, February.
    19. Richard Loulou, 2008. "ETSAP-TIAM: the TIMES integrated assessment model. part II: mathematical formulation," Computational Management Science, Springer, vol. 5(1), pages 41-66, February.
    20. Duffy, David & McQuinn, Kieran & Morley, Ciara & Foley, Daniel, 2016. "Quarterly Economic Commentary, Spring 2016," Forecasting Report, Economic and Social Research Institute (ESRI), number QEC20161, march.
    21. McQuinn, Kieran & Foley, Daniel & Kelly, Elish, 2016. "Quarterly Economic Commentary, Winter 2016," Forecasting Report, Economic and Social Research Institute (ESRI), number QEC20164, march.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. D'Adamo, Idiano & Falcone, Pasquale Marcello & Gastaldi, Massimo & Morone, Piergiuseppe, 2020. "RES-T trajectories and an integrated SWOT-AHP analysis for biomethane. Policy implications to support a green revolution in European transport," Energy Policy, Elsevier, vol. 138(C).
    2. Federica Leone & Ala Hasan & Francesco Reda & Hassam ur Rehman & Fausto Carmelo Nigrelli & Francesco Nocera & Vincenzo Costanzo, 2023. "Supporting Cities towards Carbon Neutral Transition through Territorial Acupuncture," Sustainability, MDPI, vol. 15(5), pages 1-31, February.
    3. Daniel Then & Patrick Hein & Tanja M. Kneiske & Martin Braun, 2020. "Analysis of Dependencies between Gas and Electricity Distribution Grid Planning and Building Energy Retrofit Decisions," Sustainability, MDPI, vol. 12(13), pages 1-42, July.
    4. Daniel Then & Christian Spalthoff & Johannes Bauer & Tanja M. Kneiske & Martin Braun, 2020. "Impact of Natural Gas Distribution Network Structure and Operator Strategies on Grid Economy in Face of Decreasing Demand," Energies, MDPI, vol. 13(3), pages 1-33, February.
    5. Löffler, Konstantin & Burandt, Thorsten & Hainsch, Karlo & Oei, Pao-Yu, 2019. "Modeling the low-carbon transition of the European energy system - A quantitative assessment of the stranded assets problem," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 26, pages 1-15.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Blanco, Herib & Gómez Vilchez, Jonatan J. & Nijs, Wouter & Thiel, Christian & Faaij, André, 2019. "Soft-linking of a behavioral model for transport with energy system cost optimization applied to hydrogen in EU," Renewable and Sustainable Energy Reviews, Elsevier, vol. 115(C).
    2. Hall, Lisa M.H. & Buckley, Alastair R., 2016. "A review of energy systems models in the UK: Prevalent usage and categorisation," Applied Energy, Elsevier, vol. 169(C), pages 607-628.
    3. Chiodi, Alessandro & Gargiulo, Maurizio & Deane, J.P. & Lavigne, Denis & Rout, Ullash K. & Ó Gallachóir, Brian P., 2013. "Modelling the impacts of challenging 2020 non-ETS GHG emissions reduction targets on Ireland′s energy system," Energy Policy, Elsevier, vol. 62(C), pages 1438-1452.
    4. Levasseur, Annie & Bahn, Olivier & Beloin-Saint-Pierre, Didier & Marinova, Mariya & Vaillancourt, Kathleen, 2017. "Assessing butanol from integrated forest biorefinery: A combined techno-economic and life cycle approach," Applied Energy, Elsevier, vol. 198(C), pages 440-452.
    5. Dodds, Paul E., 2014. "Integrating housing stock and energy system models as a strategy to improve heat decarbonisation assessments," Applied Energy, Elsevier, vol. 132(C), pages 358-369.
    6. Chiodi, Alessandro & Gargiulo, Maurizio & Rogan, Fionn & Deane, J.P. & Lavigne, Denis & Rout, Ullash K. & Ó Gallachóir, Brian P., 2013. "Modelling the impacts of challenging 2050 European climate mitigation targets on Ireland’s energy system," Energy Policy, Elsevier, vol. 53(C), pages 169-189.
    7. Merkel, Erik & Fehrenbach, Daniel & McKenna, Russell & Fichtner, Wolf, 2014. "Modelling decentralised heat supply: An application and methodological extension in TIMES," Energy, Elsevier, vol. 73(C), pages 592-605.
    8. Welsch, Manuel & Deane, Paul & Howells, Mark & Ó Gallachóir, Brian & Rogan, Fionn & Bazilian, Morgan & Rogner, Hans-Holger, 2014. "Incorporating flexibility requirements into long-term energy system models – A case study on high levels of renewable electricity penetration in Ireland," Applied Energy, Elsevier, vol. 135(C), pages 600-615.
    9. Hugues, Paul & Assoumou, Edi & Maizi, Nadia, 2016. "Assessing GHG mitigation and associated cost of French biofuel sector: Insights from a TIMES model," Energy, Elsevier, vol. 113(C), pages 288-300.
    10. Liu, Xi & Du, Huibin & Brown, Marilyn A. & Zuo, Jian & Zhang, Ning & Rong, Qian & Mao, Guozhu, 2018. "Low-carbon technology diffusion in the decarbonization of the power sector: Policy implications," Energy Policy, Elsevier, vol. 116(C), pages 344-356.
    11. Jalil-Vega, F. & Hawkes, A.D., 2018. "Spatially resolved model for studying decarbonisation pathways for heat supply and infrastructure trade-offs," Applied Energy, Elsevier, vol. 210(C), pages 1051-1072.
    12. Trutnevyte, Evelina, 2016. "Does cost optimization approximate the real-world energy transition?," Energy, Elsevier, vol. 106(C), pages 182-193.
    13. DeCarolis, Joseph & Daly, Hannah & Dodds, Paul & Keppo, Ilkka & Li, Francis & McDowall, Will & Pye, Steve & Strachan, Neil & Trutnevyte, Evelina & Usher, Will & Winning, Matthew & Yeh, Sonia & Zeyring, 2017. "Formalizing best practice for energy system optimization modelling," Applied Energy, Elsevier, vol. 194(C), pages 184-198.
    14. Fais, Birgit & Sabio, Nagore & Strachan, Neil, 2016. "The critical role of the industrial sector in reaching long-term emission reduction, energy efficiency and renewable targets," Applied Energy, Elsevier, vol. 162(C), pages 699-712.
    15. Dubreuil, Aurelie & Assoumou, Edi & Bouckaert, Stephanie & Selosse, Sandrine & Maı¨zi, Nadia, 2013. "Water modeling in an energy optimization framework – The water-scarce middle east context," Applied Energy, Elsevier, vol. 101(C), pages 268-279.
    16. Di Leo, Senatro & Pietrapertosa, Filomena & Salvia, Monica & Cosmi, Carmelina, 2021. "Contribution of the Basilicata region to decarbonisation of the energy system: results of a scenario analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 138(C).
    17. Blanco, Herib & Nijs, Wouter & Ruf, Johannes & Faaij, André, 2018. "Potential for hydrogen and Power-to-Liquid in a low-carbon EU energy system using cost optimization," Applied Energy, Elsevier, vol. 232(C), pages 617-639.
    18. Ettore Bompard & Daniele Grosso & Tao Huang & Francesco Profumo & Xianzhang Lei & Duo Li, 2018. "World Decarbonization through Global Electricity Interconnections," Energies, MDPI, vol. 11(7), pages 1-29, July.
    19. Dai, Hancheng & Mischke, Peggy & Xie, Xuxuan & Xie, Yang & Masui, Toshihiko, 2016. "Closing the gap? Top-down versus bottom-up projections of China’s regional energy use and CO2 emissions," Applied Energy, Elsevier, vol. 162(C), pages 1355-1373.
    20. Balcombe, Paul & Speirs, Jamie & Johnson, Erin & Martin, Jeanne & Brandon, Nigel & Hawkes, Adam, 2018. "The carbon credentials of hydrogen gas networks and supply chains," Renewable and Sustainable Energy Reviews, Elsevier, vol. 91(C), pages 1077-1088.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:126:y:2019:i:c:p:480-493. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.