Flame 2014 - Views from the speaker zone

Energy & Utilities

June 11, 2014

It is a pivotal time for the European gas sector, with a range of views on whether the sector faces continued decline, or potential resurgence. FTI Consulting professionals joined senior gas sector professionals at the 2014 Flame conference and sought the views of some of the industry’s most prominent experts on the future of gas.

Edouard Sauvage, Director of Strategy, GDF SUEZ

1. In light of the 2030 policy framework for climate and energy proposed by the European Commission, how might the future of gas evolve?

A great deal of the future of primary gas demand in Europe will be determined by the development of gas for power, hence the ability of the legislators to strengthen the European carbon market. Indeed this market based instrument should play its role and deliver a price signal which should incentivise the use of low carbon technologies, such as gas, instead of higher emitting fuels. It is very important that gas has a great future in Europe in order to accompany the development of renewables. That’s why it is urgent to restore the functioning of the EU ETS and to place it as a key element of the 2030 framework. At the same time, it is really important to ensure a fair remuneration of gas power plants by installing capacity remuneration mechanisms coordinated at EU level. Policy makers need to consider all of the side effects and consequences when considering new initiatives. For this to happen policy makers should engage in credible discussions with industry members, which take account of the merits of natural gas in meeting climate change goals.

2. What are the prime drivers for future customer energy demand?

Customer gas demand will be determined by two main drivers; energy efficiency, and substitution between fuels. For the latter, innovation plays a key role. Micro-cogeneration, stirling engines, gas and hybrid heat pumps could have a role to play in the medium term in competing with residential energy solutions. The development of the gas-to-transport segment will also be significant, in particular for fuelling trucks or ships by river or sea. GDF Suez LNG Solutions is already very active in providing this services to transport and shipping companies in the Netherlands.

Howard Higgins, Managing Director, Macquarie Capital Funds (Europe) Limited

1. In light of the 2030 policy framework for climate and energy proposed by the European Commission, how might the future of gas evolve?

Gas has and will have a role to back up the renewables. However in a back-up role gas is uneconomical and the renewables subsidies will need to be reversed into gas.

2. What are the prime drivers for future customer energy demand?

In my view European demand is flat and potentially declining. I’ve just bought a new energy optimisation system for our home in the UK which will reduce our energy consumption by 60%- fully controllable heating and hot water through the iPhone and linked to the local weather. Smart meters are dead before they take off!


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