Confirmed essential role of gas in the future with about 2% growth per year to 2040. Astonishing 5% growth of the global gas market in 2018.
Snam, International Gas Union (IGU) and The Boston Consulting Group (BCG) present the Global Gas Report 2019, the new edition of the annual report that examines key global gas market trends, looking at recent developments and assessing progress towards the leading role that gas is expected to play in the energy transition. This year's report special feature is a section on the Future of Gas in Europe, co-produced with key European gas infrastructure operators: DESFA, Interconnector UK, Teréga and TAG.
The demand has responded strongly to ample supply and liquidity. With LNG trade expanding, prices at key regional natural gas hubs have reached multi-year lows and gas has become affordable for more consumers, taking share from coal. That has driven a 5% increase in global demand in 2018, with a particularly strong growth in the US and China, and a 4% increase in global gas trade.
Now in its third edition, the report reaffirms the positive scenario for natural gas. Over the past five years, the market has grown on average by 2% per year and it is expected to maintain a similar growth rate until 2040 to reach 25% of the global energy mix, mainly due to its environmental benefits comparing to other fossil fuels, growing supply and increasingly competitive pricing.
This highlights the key role that cost competitiveness will play if gas is to deliver its full potential - notwithstanding the diverse set of benefits that it offers to a world that is in the process of an unprecedented energy transition. It is a unique and abundant fuel that can reliably supply the world's rapidly changing energy systems with more energy and support economic growth while helping to immediately cut emissions and improve air quality.
Snam CEO, Marco Alverà, said: 'Natural gas is currently in a sweet spot and has exciting prospects in light of the potential for replacing coal in electricity generation and of the gradual growth of renewable gases such as hydrogen and biomethane. In fact, natural gas and even more the growing potential of renewable gases are capable of reducing both CO2 emissions and pollution, enabling the energy transition to take place at affordable prices for all consumers'.
Professor Joe Kang, President of the IGU, noted: 'I am thrilled to see the two prominent trends of natural gas prices - as they are reaching lower levels and becoming more globalized, and I look forward to seeing the great benefits for a sustainable energy future, as gas is becoming more affordable in more markets'.
BCG Senior Partner and Managing Director, Alan Thomson, stated: 'The report highlights the critical role of the natural gas industry in helping to meet the Paris climate goal, through urgently reducing methane emissions, enabling a rapid transition away from coal, and scaling up new low carbon technologies'.
Natural gas can contribute to a cleaner global energy system. But it faces its own challenges, including the need for sustained investment to expand access to low cost gas reserves globally, and in transmission, storage and distribution infrastructure, especially in emerging economies where the use of gas is expected to grow significantly. Together with cost and availability, the gas sector's prospects will also be shaped by a strong push to improve its environmental impact - continued action is critical to reduce methane emissions and ensure data availability and transparency. Finally, government policies to sustain innovation are required to boost development of low carbon gas technologies - including renewable gas, hydrogen, and carbon capture, utilization, and storage (CCUS) - as they can provide an efficient pathway to dramatically reduce greenhouse gas emissions of the energy system over the long term.
The special section on the Future of Gas in Europe examines how the role of gas will be evolving across all sectors and how low-carbon technologies could impact the European energy system in the near future. It highlights the continued importance of natural gas infrastructure in the region, required to realize the benefits natural gas brings, including: improving network interconnectivity, supporting the integration of renewables, and scaling the development of low carbon gas technologies. In this section there is also a number of interesting case studies that explore renewable gases, reliability, and security angles of the future of gas in Europe.
This report demonstrates that it is entirely possible to achieve a sustained rapid growth for natural gas, in a sustainable energy future scenario, but it will require deliberate effort, commitment, and leadership from the industry and working alongside its partners and stakeholders.