Backers of manufactured methane say it could replace natural gas and help California meet its goal of 100% carbon neutrality by midcentury, but skeptics call it an unrealistic way gas companies are trying to hold onto the value of their plants and pipelines as demand decreases.

The issues were addressed last week during an industry webinar and separately in a meeting of the Western Energy Imbalance Market’s Regional Issues Forum, both held May 5.

During the events, proponents said synthetic methane can be produced with carbon captured from the atmosphere using excess renewable power, making it “carbon neutral.” They want California to recognize power-to-gas (PtG) as a non-polluting energy source under its renewables portfolio standard program, which requires all of the state’s electricity to come from carbon-free resources by 2045.

California has renewable power in abundance, often with high curtailment rates. In April, for instance, CAISO reported a record of more than 318 GWh of solar and wind curtailment — the product of a shoulder month with high output and low demand coupled with reduced load because of the COVID-19 crisis.

“Any power system that has huge amounts of solar or wind in it, trying to push the 100% envelope, they will have as a necessary consequence huge amounts of overgeneration,” said Joseph Ferrari, general manager of North American market development with Wärtsilä, a Finnish company that specializes in repurposing thermal generation infrastructure. “This is surplus electricity that just has to be dumped. There’s really nowhere for it go.

“However, we can put it to use,” Ferrari said during the Wärtsilä-sponsored webinar. “We can take that excess renewable energy to power electrolyzers, which take water and make hydrogen. We can take some of that excess renewable electricity and capture carbon directly from the air. And, finally, we can use more of that renewable electricity to power a methanizer process,” which combines hydrogen and carbon to make methane.

“There’s no fossil fuels involved, and there’s no net increase in atmospheric carbon,” he said. Existing gas plants can burn the fuel and current pipelines can carry it. It can be stored long-term or liquefied for transport.

A small percentage of hydrogen produced in the process can be added to methane without compromising generation or jeopardizing pipelines, the company and other proponents say.

An Optimal Path?

In a Wärtsilä white paper Ferrari and three co-authors called PtG an “optimal path” for California to become carbon neutral by 2045 — the goal established by Senate Bill 100 — or even five years earlier. (See Calif. Clean Energy Measure Goes to Governor.)

The California Public Utilities Commission recently approved large increases in targets for renewable energy and storage, particularly batteries, to help meet the state’s ambitious goals. (See CPUC Approves Big Boost in Storage, Solar Targets.)

But serious doubts remain about the ability of renewables and battery storage to meet California’s energy needs. The state still relies heavily on gas generation to meet peak demand and to compensate during times of prolonged cloud cover and low wind, both common in winter.

CAISO has made it a top priority to fill an expected capacity shortfall starting this summer and worsening next year. Imports from outside the state are becoming limited with coal plant retirements and growing demand in other Western states. The shortfall is expected to occur primarily during peak evening demand in summer as solar goes offline. (See CAISO, CPUC Warn of ‘Reliability Emergency’.)

Storage is key, but the current industry standard is four-hour batteries, not enough to cover prolonged shortages, Karl Meeusen, CAISO senior adviser for infrastructure and regulatory policy, said during the webinar.

“We need to make sure that that’s not all we get,” Meeusen said. “We need to have a diversity of storage duration —from four, six, eight and even longer hours — for availability of resources.”

PtG advocates say synthesized methane can be stored for months and used for long run-times to cover seasonal shortfalls in summer and winter.

Meeusen stopped short of saying CAISO endorses synthetic methane, but he said all options need to be considered to maintain reliability and reach 100% carbon-neutral status.

Wärtsilä argues it has the answer in manmade methane.

“As fossil fuels are phased out, thermal assets [can be converted] to renewable fuel to form a large, distributed long-term energy storage system with durations of weeks, not hours, providing seasonal balancing and security of supply during extreme weather events,” the company’s white paper says. “Benefits of this approach include reaching RPS goals by 2040, five years ahead of schedule, and net-zero carbon by 2045.”

Calpine, one of the major owners of natural gas generation in California, also argued for the introduction of renewable natural gas at the EIM’s Regional Issues Forum.

“Gas capacity retention is part of a cost-effective resource mix to meet aggressive [greenhouse gas reduction] goals, the company said in its presentation. “Gas is needed even with a large storage buildout.”

Avoiding Stranded Assets

Skeptics, however, argue making methane is too costly and uses too much renewable power. They say owners of natural gas infrastructure just want to preserve the value of their assets as buildings are electrified and gas gets phased out.

“As fewer people use gas, it will become so expensive to run the gas system that people will flee,” said Merrian Borgeson, a senior scientist with the Natural Resources Defense Council.

Owners of plants and pipelines are worried about seeing their assets stranded in the future, but instead of making methane, “our view is that gas companies are going to have to look at how to contract their infrastructure,” Borgeson said.

In April, the California Energy Commission released a report by Energy and Environmental Economics (E3) and the University of California Irvine’s Advanced Power and Energy Program that concluded PtG is problematic for widescale use. E3 also presented on the future of natural gas in the West at the RIF.

To meet California’s climate goals, use of fossil fuels such as natural gas will need to decrease 80% by midcentury, it said. E3 said it hadn’t found a solution that eliminates pipeline gas altogether, making some form of renewable gas a likely alternative. (Biomethane, produced from cow manure and other sources, is less expensive but limited by nature.)

The study concluded that using only curtailed renewables could not synthesize enough methane to meet demand. Far more renewable electricity would be needed to produce enough manmade gas to replace natural gas at current demand levels, it said.

Another major problem is cost. E3 estimated that synthetic methane could run as high as $86/MMBtu in 2050 compared with $5/MMBtu for natural gas. Nearly 80% of all homes in California use natural gas, but faced with far higher gas bills, customers may decide that switching to electric furnaces and water heaters makes financial sense.

“Building electrification is likely to be a lower-cost, lower-risk long-term strategy compared to renewable natural gas,” including manufactured methane, E3 said.

Addressing the situation now could help avoid having gas assets “not used or not useful” in the future, it said.

“By taking a long-term view of the state’s climate goals and evaluating the role of the natural gas infrastructure in that future, this research allows the state to potentially avoid stranded assets in the gas system,” the study said.