Stepping on the gas

Stepping on the gas

Depleted natural gas reservoirs are being hailed as the energy storehouses of the future. Spearheading this technology in Central Europe is Austrian-based RAG Energy Storage. Report by David Porteous.

Europe’s energy supply sector is on the threshold of an exciting future due to market liberalisation and regulatory changes. Natural gas and, just as importantly, its infrastructure will play
a central role in this new era.

Natural gas remains an essential part of the energy mix because it has the best climate performance out of all conventional energy sources. When burnt, it releases 25 per cent less greenhouse gas than oil and 30 to 35 per cent less than coal. It is efficient as a fuel for power generation and for heating – modern domestic condensing boilers have efficiencies as high as 98 per cent. The transport is operated via an invisible underground grid, directly connected to the consumers, which is clean and congestion-free.

The world has vast natural gas reserves, but reservoirs can also be reused as an energy storage facility after its production period. This allows natural gas to be stored in vast amounts. In comparison,
there is no way of preserving wind power and sunlight on a large scale. As a result, stored gas can be used to balance fluctuations in renewable energy production especially since gas power
plants react instantly to demand or supply changes.

Roh l-Aufsuchungs Aktiengesellschaft (RAG), which made its first gas discovery in 1956, has been developing depleted natural gas reservoirs in this way since 1982. Its underground gas storage
facilities are located in the Austrian provinces of Salzburg and Upper Austria. Today, RAG is Europe’s fourth largest technical operator of underground gas storages.

Synthetic Gas Reservoirs – rock formations formed millions of years ago – which have been developed into storage facilities, allow not only the storage of natural gas but also synthetic or biogas. A new technology called ‘power to gas’ makes it possible to convert surplus wind and solar energy to produce hydrogen or methane. After storing such synthetic gases in underground gas storage, the gas can be withdrawn whenever needed.

“This technology allows the further integration of renewable energy sources into the energy mix,” said Georg Dorfleutner, Managing Director of RAG Energy Storage. “Furthermore, it supports an integrated view for electricity and gas, which brings efficiency to the future infrastructure development, especially for transmission.”

In January 2013, RAG formed RAG Energy Storage to market RAG’s storage capacities and develop new products and services in a specialised company. The company’s name was chosen with an eye to
this wider role of utilising underground gas storage facilities to store energy from a variety of sources.“Two years ago little was known about energy storage but now it is key to Europe’s supply security,” said Mr Dorfleutner. “Gas storage facilities will have a crucial part to play due to increasing wind and solar power generation resulting in large over-supplies and shortages which have to be utilised or balanced.

“The higher the share of renewables in the energy mix, the larger are the gas stocks that must be held in reserve to enable standby power generation to step in whenever weather conditions prevent
wind turbines or solar arrays from producing electricity.

“Physical storage capacity becomes more and more important for energy trading. Our flexible storage services can be used to support conventional supplies to consumers but also for short-term intraday and complex structured transactions.”

Strategic Location
Austria has a well-developed pipeline grid and, due to its strategic location, it is linked to the rest of the European transit system. In April 2014, RAG Energy Storage connected its Austrian storage
facilities directly to Germany. RAG Energy Storage plans to make the most of Austria’s geography and geology to expand its gas storage capacity. The company says this is the only way for Austria to achieve sufficient liquidity,flexibility and security of supply, and hold on to its position as a key energy trading hub.

To meet growing market demand for gas storage capacity, RAG Energy Storage, together with its parent company RAG, maintains an ongoing elaboration programme to determine which former gas fields are suitable for conversion into storage facilities. Its current total capacity is in excess of 650,000cu m/h (7.3 GW). New developments may result in the creation of an additional
100,000cu m/h (1.1 GW) withdrawal capacity by 2017.

Committed to complete transparency, RAG Energy Storage posts current storage levels and the quantities recently injected into and withdrawn from RAG-owned facilities both on its website and on the
European transparency platform AGSI+ (www.transparency.gie.eu.com).

Influential Voice Mr Dorfleutner is Vice-President of Gas Storage Europe (GSE); this role and his activities on behalf of its umbrella organisation Gas Infrastructure Europe (GIE) have given RAG an important voice at European level during discussions on new regulations and market liberalisation.

He said: “Our aim is to meet the challenges of a new energy world by offering storage products and services that are tailored to the needs of our customers. We will continue to develop innovative
solutions that are designed to facilitate value added gas transactions.

There is huge competition in Austria’s storage market but we endeavour being the frontrunners. “The vast quantities of energy that can be held in depleted gas reservoirs and their unparalleled flexibility will make them a mainstay of the energy supply chain.

“Using gas as an energy carrier is turning it into a smart product and broadening the scope of how we use it; besides heating we will see new sectors to take over the clean and efficient gas technology. A major market to come will be transport and mobility using compressed or liquefied natural gas (CNG/LNG). Thus storage of gas–natural gas, synthetic gas and biogas–will play an increasingly
significant role in Europe’s energy mix.”

www.rag-energy-storage.at

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