The Future Of Gas

A debate is going on over the future of gas.

Just a few years ago, the then UK government’s chief scientific adviser, Professor David Mackay, predicted that an ‘all electric future’ would be the only way to decarbonise the UK economy to meet 2050 goals. Yet today, we are relying on a new generation of gas fired power stations to avoid the lights going out whilst the coal fired plants are shut down.

For once, common sense prevailed. The cost of expanding and reinforcing the electricity grid to cope with the surges in peak winter heating demand would be astronomic, probably more than £100 billion. Not to mention the fact that natural gas is easily and cheaply stored whereas electricity is hard and costly to store. The gas grid is a premium piece of national infrastructure and should be adapted to a low carbon future, not consigned to the scrap heap of history.

There have been two recent and differing views on the future of gas. National Grid is currently releasing a series of reports entitled “The future of gas” with the latest one, in February 2016, subtitled “Supply of renewable gas”. More recently, in a keynote speech, Bloomberg New Energy Finance founder Michael Liebreich noted that the global uptake of solar power and wind power is happening faster than anyone predicted and yet this world still needs to accelerate its rebalancing of the energy mix away from fossil fuels in line with our 2050 carbon targets.

At the same time the wholesale price of natural gas for next day delivery has fallen recently to 26.48p per therm, a fall of 44% in a year. Yet strangely supply of natural gas continues to rise with increasing production from Norway, Russia and (even) the North Sea, plus LNG from both Qatar and in the near future from the USA. Delivered natural gas prices are dropping for homes and businesses and should stay low for the next few years (if your supplier hasn’t reduced your gas price by 44% in the last year, then remember to ask them why not!).

Wholesale electricity prices have also fallen but by not nearly so much. The reason for this is principally down to market structures, green levies and the fact that electricity has to be created through one of a number of generation processes, most of which today are fairly inefficient. Coal fired power stations, for example, throw away between 60% and 70% of the energy in the coal as heat in the cooling towers. Gas fired power stations waste between 45% and 60% of their energy as heat. Whereas microCHP boilers operate at over 90% efficiency, losing less than 10% of the heat up the flue. And, unlike heat pumps, they don’t put additional strains on the electricity grid, in fact they reduce them by generating at the point of use and so freeing up capacity to be used elsewhere.

What does that mean for microCHP technologies and for Inspirit in particular?

In fact it is probably the best possible news for us and for our technology. In the short term natural gas is the obvious fuel source to use to power a Stirling engine, with more than 80% of UK buildings connected to the gas grid. (For off gas grid buildings, we are looking at an LPG version.) Natural gas prices have dropped and are likely to remain low for the time being. Electricity is now up to 5x more expensive than gas. So a high efficiency micro combined heat and power boiler running off natural gas makes perfect sense in the short to medium term. It also means our commercial and residential customers get extraordinarily cheap electricity from their electricity generating boilers.

In the longer term, Stirling engines are supremely fuel flexible, as they are powered by heat and not directly by gas. That means that any fuel which produces heat can be used to drive a Stirling engine. The most obvious fuel is biomethane (injected into the gas grid from biodigesters dealing with food waste and farm waste) and bioLPG (for off gas grid properties). If projects such as the Leeds city gate hydrogen project take off, then our Stirling engine could be adapted to run on hydrogen. Heat from biomass and even solar heat can be used, although these are likely to be more niche applications. What this means is that renewable heat and renewable electricity can be produced at the same time at the point of use, so avoiding grid losses and making the very most of scarce renewable fuels.

MicroCHP boilers are also highly suited to traditional UK building types, both residential and commercial.

The UK has a high proportion of brick buildings, including many millions which have been built with little or no insulation. Brick buildings tend to survive for hundreds of years and in the UK many of these use high temperature radiators for heating. They are simply unsuited to heat pumps which use low temperature radiators and other forms of electric heating, due to their high heat loss characteristics. These older brick buildings are structurally sound but need a robust source of efficient heating which microCHP boilers are best placed to offer.

That’s why we talk about microCHP being the next generation boiler, a straightforward replacement for or addition to existing boilers with the significant benefit of low carbon electricity being generated at the same time.

We believe that gas will be around for many years yet, certainly long enough to power the next generation of heat and power boilers. Great potential is there for that gas to be increasingly low carbon: a win-win for our technology and for the environment.