Xcel unveils its goal of carbon neutral natural gas by 2050

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Xcel Energy is targeting net-zero carbon emissions from its natural gas system by 2050, an ambitious goal but with significant challenges.

The company joined only a handful of U.S. gas utilities on Monday in announcing plans to extract carbon from Minnesota and other states, including replacing some of the gas with hydrogen, a cleaner alternative .

“It’s really an evolution from a business perspective,” said Bob Frenzel, CEO of Xcel. “This is just the next big part of the economy where we can show leadership in reducing emissions.”

Minneapolis-based Xcel, Minnesota’s second-largest gas utility and largest electricity supplier, was one of the first US companies to set targets for 100% carbon-free energy by 2050. Achieve this electricity target will be difficult enough for Xcel; the gas greening project should be even more so.

Electricity produced from fossil fuels can be replaced more easily – and at a lower cost – with renewable energy than natural gas can be for heating. Cleaner substitutes for natural gas are now quite expensive or criticized for not being good enough for the environment.

“Xcel Energy’s announcement that it will set targets for achieving zero net greenhouse gas emissions from its gas business is commendable, but it’s just the start,” said Joe Dammel, director of decarbonization of gas at Fresh Energy, a St. Paul’s clean energy group. in a report.

“To meet climate goals, the gas system must decarbonise by mid-century, which is why it is crucial that we now focus on what the future of gas will look like and make the right investments. . “

Net zero generally refers to the notion that increases in carbon emissions from an industrial process are offset by an equivalent amount of carbon reductions.

“We will limit as much as possible the amount of greenhouse gas emissions (from the gas),” Frenzel said. He added: “We are not going to do anything that compromises the reliability of the system or the affordability of the product.”

Xcel’s net zero gas plan begins with actions that can be taken quickly, including stepping up efforts to detect and stop leaks on its distribution network; and buying gas only from “certified low emissions” suppliers.

In recent years, there have been several efforts to certify natural gas suppliers using environmental measures such as methane emissions. “There are more sustainable and less sustainable producers of natural gas,” Frenzel said.

On the demand side, Xcel’s net-zero plan includes gas conservation measures, including incentives for electrical appliances and water heaters, as well as electric heat pumps to supplement or replace gas heating.

Xcel also plans to launch pilot programs to test both “green” hydrogen and renewable natural gas (RNG) in its gas distribution system. The company, although it has not released any details, is planning five to eight hydrogen projects.

“We are in an exploratory phase at a number of our existing sites to use hydrogen,” Frenzel said.

Green hydrogen refers to hydrogen produced by renewable energy or nuclear power, rather than the conventional method of burning natural gas. The first currently costs two to almost four times the second.

President Joe Biden’s clean energy package before Congress includes hydrogen tax credits similar to credits used for years to boost wind power. “We think there will be tailwinds from federal legislation,” Frenzel said.

Hydrogen is an important topic in future clean energy scenarios; it could be used to replace natural gas for heating and power generation.

Xcel, helped by a federal grant of $ 10.5 million, already has a hydrogen pilot project on Prairie Island. It will produce hydrogen by electrolysis, using steam from its nuclear energy production.

In electrolysis, an electric current is used to separate water into its components of hydrogen and oxygen. Hydrogen electrolysis can also be done with renewable energies, especially wind in the Upper Midwest.

Yet the use of hydrogen faces many challenges, including the fact that gas pipelines have to be adapted to heavy use of hydrogen – an expensive endeavor. Currently, Xcel’s system can handle a mixture of only 5-20% hydrogen.

Renewable natural gas may have even more challenges, although Xcel and CenterPoint Energy – Minnesota’s largest gas supplier – are pushing the concept forward.

Renewable natural gas is produced by breaking down organic waste through anaerobic digestion. Once free of impurities, it can be injected into existing natural gas pipelines. Manure from dairy farms and livestock operations is a major source of biogas; food waste too.

However, renewable natural gas has come under criticism from clean energy and environmental groups, who say it lacks a robust accounting system to measure carbon intensity – the amount of greenhouse gas. of greenhouse emissions from the production, distribution and consumption of a fuel.

Some forms of renewable gas are not carbon neutral, they say.

Currently, renewable natural gas is considerably more expensive than fossil gas – and the adequacy of its supply, even in the long term, is questionable.

“It’s a part of the solution, but not a huge part of the solution,” Frenzel said.

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