Friday, 5 March 2021

Angela Ogier – Group Strategy and Corporate Development Manager 

We all know the benefits of gas: continuous hot water, efficient water and space heating and the good old kiwi barbecue.  

Natural gas and LPG are clean burning fuels, with much lower CO2 emissions than coal and create virtually no local air pollution from particulates. Natural gas and LPG are a critical energy source for over 19,000 commercial and industrial customers such as restaurants, hotels, greenhouses, hospitals and steel makers. Firstgas Group’s 2,500 km of high-pressure gas pipelines and 4,800 km of distribution pipelines, as well as our network of Rockgas LPG sites, deliver energy to more than 425,000 kiwis everyday.

However, we also know that gas needs to change to help New Zealand to cut its greenhouse gas emissions and meet NZ’s net zero carbon target by 2050.  Firstgas Group has been working on this challenge for a while as we think gas has a key role to play in New Zealand’s future energy.

Shaping the future of gas – hydrogen, biogas and BioLPG

Firstgas Group is investigating some promising replacements for natural gas and LPG:• Biogas is a direct replacement for natural gas and is produced by anaerobic digestion of organic waste (food waste, food processing waste, sewage – anything you can compost).• Hydrogen can be burnt like natural gas or used in a fuel cell to produce electricity and is produced through the electrolysis of water.• BioLPG is a direct replacement for LPG and is produced from waste oil products during the manufacturing of renewable diesel and other biofuels.

Biogas and hydrogen are zero carbon while BioLPG can be zero carbon depending on the feedstock and sources of energy.  There are also other technologies to produce synthetic renewable gases, which are less mature.  We’re keeping an eye on these other technologies to understand their potential and how they can support the market in the future.

Biogas – ready to deploy right now

Bigoas is essentially methane – so it can be burnt in hot water heaters and boilers currently available on the market.  When it’s produced it’s 50% methane and 50% CO2 so it doesn’t burn as cleanly as gas from the pipeline which is 95% methane.  However, the technology to ‘scrub’ and pressurise the gas is well understood and has come down in price due to extensive growth in the industry overseas.  This means it’s now possible to treat biogas and make it pipeline spec (biomethane) using equipment that comes pre-packaged in a shipping container.  There’s also a CO2 stream that is valuable – it can be used for drinks manufacture, industrial processes or fed into a greenhouse to enhance plant growth.

Over the past 20 years there has been massive growth in biogas production overseas – particularly in the UK, Germany and Denmark. In fact in Denmark biogas now makes up 10% of its natural gas, going up to 25% in summertime.  That’s why the technologies around biogas production and upgrading to inject into the gas network have been improving and coming down in cost.

Biogas is already produced at 20 sites in New Zealand – landfills and wastewater treatment plants – where it is burnt to provide heat and power for the site.  We already produce enough to provide around half of residential gas needs in NZ.  It’s currently not injected into the gas grid; but that’s what we want to change.  

Firstgas Group has partnered with Beca Engineering, Fonterra, Lion and EECA to carry out a technical study of the potential of biogas. Together we are investigating how we can unlock the potential for injecting biomethane (cleaned biogas) into our existing gas network. Not only would this have benefits in terms of maximising the value of suitable waste streams, but it would also partially decarbonise the gas network.  It would also provide a means for gas users to decarbonise their operations without having to change out appliances.  This study is well underway with results due in April 2021.

Hydrogen – the next cab off the rank

Hydrogen has huge potential and can be produced at scale using electricity and water and there are no emissions.  Current thinking is that up to 20% hydrogen (by volume) can be mixed with methane and burned in existing gas boilers and hot water heaters.  This means that we could potentially start putting this blend into customers’ homes without changing any appliances.  Beyond that we would need to start changing appliances, which is similar towhat happened when New Zealand switched from ‘town gas’(coal gas) to natural gas in the 1970s.

The good news is that there is a huge amount of research going on overseas on this point.  The UK and Australia both have programmes testing appliances and gas connections on both hydrogen blends and 100% hydrogen. There are also hydrogen boilers and ‘hydrogen ready’ boilers in advanced development and testing stages.  While a conventional gas boiler will need to be replaced when we convert to hydrogen, a hydrogen ready boiler can be switched over by a technician. Finally, gas network owners are undertaking a huge amount of R&D to look at safely converting their networks and trials are ongoing in gas distribution networks.

As most of our gas standards rely on the UK and Australia, we can use their research for our appliances and networks in most cases.  Firstgas Group is tapped into these programmes and plans to make research available as it comes to hand.  

Firstgas Group is also two years into our own Hydrogen trial study.  In 2019 we received a Government Provincial Growth Fund grant to understand the feasibility of transporting hydrogen in our gas networks, how we would convert the networks and what we still need to test. This work is largely complete and will be released in late March.  It provides a concrete platform for our testing and development programme.  It also helps us paint the picture for potential hydrogen producers and users.  We think it will be a valuable contribution to making a zero emissions gas grid, a future reality.

BioLPG – ready and waiting

BioLPG is another product that is already established overseas with 180,000 tonnes being produced annually – that’s just over twice New Zealand’s LPG needs.  Mostly, it’s produced in a biofuel refinery when renewable diesel or biofuels are produced from waste vegetable oil.  There are also other production methods emerging, but these are less widespread.  Using current production methods, bioLPG produces 80% less carbon than conventional LPG.  However, if we improve the carbon efficiency of the feedstocks and energy in the refining process, we think it could be zero carbon soon.  And just like biogas, there’s no need to change out equipment as it’s a direct replacement for conventional LPG.

As a member of LPGANZ, Firstgas Group is supporting studies into bioLPG across the industry.  We’re also looking at how we can support production here or import bioLPG to supply our Rockgas customers.

At Firstgas Group we think the future of LPG and natural gas in a zero carbon New Zealand is strong.  Since we’ve already done a substantial amount of work in this area, we think we’re well placed to respond to the zero carbon challenge.

About Firstgas Group 

Firstgas Group is committed to helping New Zealand achieve net zero carbon emissions by 2050 and is a member of the Climate Leaders’ Coalition. We proudly represent leading companies; Firstgas, Rockgas, Flexgas and Gas Services NZ. 

Together we lead the delivery of natural gas and LPG in New Zealand. As responsible stewards of our gas distribution and transmission networks, we support a diverse and resilient energy system, serving 300,000 customers across the North Island and more than 125,000 customers using Rockgas LPG nationwide. Firstgas owns and operates more than 2,500 kms of high-pressure gas transmission pipelines that are essential to supplying natural gas to large industrial customers and 4,800kms of gas distribution networks, across the North Island. Rockgas delivers LPG from a network of nine branches and 27 franchises and can also pipe LPG straight to customers connected to reticulated gas networks in Christchurch, Queenstown and Wanaka. Flexgas owns and operates the Ahuroa gas storage facility and Gas Services NZ provides expert pipeline maintenance services across the gas industry.