Natural Gas Needs Central Role in Germany

There is a large potential for Germany to cut its climate emissions in a cost-effective way through the increased use of natural gas, said Statoil CEO Helge Lund at a joint Statoil/Wintershall event in Berlin on 24 June.

Switching from coal to gas in the power sector is the most significant option to cut emissions, as this can save more than 50% of emissions per kilowatt-hour of electricity produced.  

“I think it is both timely and necessary for German to develop a plan for how natural gas can contribute to fulfilling the ambitions of the Energiewende (energy transition). Increasing the use of natural gas will be beneficial both for the German economy and for the climate,” Lund said. 

On June 24, the Statoil CEO addressed about 120 special invited guests—including members of the German Parliament, energy industry, business associations, think tanks and academia— in Berlin at the event “Natural gas as a climate protection engine. Does Energiewende need a gas market strategy?” co-hosted by Statoil and the German company Wintershall represented by CEO Rainer Seele. 

Uwe Beckmeyer, parliamentary state secretary at the Federal Ministry for Economic Affairs and Energy,  and Federal Foreign Office state secretary Stephan Steinlein represented the German government. 

Decarbonization tool 

A study on the potential of natural gas as a decarbonization tool in Germany was presented by the Institute of Energy Economics at the University of Cologne. The study, which has analysed the most economically efficient ways of mitigating CO2 in Germany, shows that natural gas is best positioned in the power and heating sectors. 

Today around 45% of Germany’s power is generated by burning coal, while gas only contributes 10%. According to the study commissioned by Statoil and Wintershall, the coal-to-gas switch is nearly the only option to cut power sector emissions in the current power fleet. 

The study also shows that natural gas can play a pivotal role in decarbonizing the heating sector. Emissions of 18 million tonnes of CO2 (around 2% of German’s annual emissions) can be reduced at negative costs (both CO2 and cost savings for end users) per ton of CO2. This can be done by replacing old and inefficient heating systems. 

“This clearly demonstrates that in order for Germany to reach its 40% reduction target in 2020, gas needs to increase its share in the energy mix, and the use of coal needs to be strongly reduced,” said Lund. 

Lund underlined that a robust CO2 price is needed in driving cost-efficient emission reductions. 

“Through the process of establishing an EU energy and climate framework towards 2030, Germany should take the lead in ensuring that the EU emission trading scheme becomes Europe’s main tool for decarbonization. In addition, I encourage Germany to design a plan for how increased use of natural gas can contribute in fulfilling the ambitions of the Energiewende,” said Lund.

Second-largest supplier

Germany is one of Statoil’s most important markets for gas produced on the Norwegian continental shelf. Statoil is the second-largest supplier to Germany, delivering gas via three pipelines (Europipe I, Europipe II and Norpipe) and has a market share of around 20%. Statoil has a track record of more than 35 years of reliable gas supplies to Germany.

This autumn Statoil will establish an office in Berlin to engage even more actively in the German energy policy discussions.

During his visit to Berlin, Lund will also speak at the BDEW Kongress. This is one of the major energy conferences in Germany, gathering more than 1,000 delegates.