Decarbonizing Natural Gas End Uses in Minnesota

This fall e21 plans to launch a stakeholder engagement process to consider the role of natural gas utilities and the natural gas system in a decarbonizing economy. Sign up below to stay involved.

What is the role of natural gas utilities and the natural gas system in a decarbonizing economy? This spring I joined colleagues from CenterPoint Energy, the Great Plains Institute, Fresh Energy, and the City of Minneapolis on a team to explore that question as part of the Rocky Mountain Institute’s annual e-Lab Accelerator. Together, we planned for a Minnesota process that could bring key stakeholders together to work on this issue. The rest of this post digs into the team’s discussions.

Broadly, the team was tasked with considering how Minnesota might move forward with efforts to decarbonize energy end uses that are currently fueled by natural gas. Given the complexity of Minnesota’s energy needs and uses, we discussed:

1. The range of possible low or no-carbon fuel and technological options to meet Minnesota’s natural gas heating and process loads, and
2. The process needed to support successful, timely, cost-effective decarbonization of natural gas end uses in Minnesota.

The State of Minnesota and several individual cities have aggressive economy-wide carbon emissions reduction goals intended to mitigate climate change and its effects (not to mention the growing number of states, cities and companies nationally and globally doing the same).

We can’t meet these carbon emissions reduction goals without addressing emissions resulting from natural gas, which is no easy task. In Minnesota, addressing natural gas emissions is particularly challenging because of our extreme cold weather, which creates a high heat load that is mostly met today by natural gas-fueled heating equipment. Additionally, Minnesota is home to high levels of industrial end uses that are fueled by natural gas.

In our state and elsewhere, conversations around carbon emissions reductions tend to focus heavily on electrification — switching end uses from fossil-fueled to electricity — without looking deeply at a broader set of fuels and technologies. As our electric supply becomes increasingly less carbon-intensive and electric utilities pledge deeper carbon emissions reductions in the coming decades, electrification offers great promise to decarbonize many end uses. And as the grid decarbonizes, electric technologies such as cold climate air source heat pumps, water heaters, electric cooking ranges, and electric dryers will likely offer significant carbon reductions over their natural gas-fueled counterparts.

But we may need more than one solution for decarbonizing natural gas end uses.

Air source heat pumps are not yet technically capable of meeting the full heating needs of most existing Minnesota buildings. Likewise, there are not yet practical, cost-effective electric substitutes for many industrial processes, such as asphalt and cement manufacturing, ethanol production, thermal oxidizers, and processes requiring high-pressure steam. Moreover, it is not yet clear whether Minnesota’s current electric system would be able to affordably and reliably meet the heating and process loads that are now served by natural gas.

A number of emerging low-carbon technologies and fuels offer promise in decarbonizing natural gas end uses. Some could use the natural gas distribution system (e.g., power-to-hydrogen, power-to-gas, and renewable natural gas), and may fit well within the existing natural gas utility business model (e.g., geothermal district system). Others, such as electrification, would not necessarily use the existing natural gas transmission and distribution system, and therefore would not offer a clear or traditional role for natural gas utilities. One category of “technological” options (e.g., power-to-gas, power-to-hydrogen) may also integrate well with and help to optimize the existing electric system to improve electric operations since they could both use excess renewable electricity that might otherwise be curtailed and convert it into a usable gas that could be injected into existing pipelines.

Here in Minnesota, CenterPoint Energy has proposed a pilot project to sell renewable natural gas (RNG), biologically produced methane released from decomposing organic matter (e.g., agricultural and municipal organic waste as well as landfill gas). This pilot project is an initial effort by the company to provide a lower-carbon product to its customers and help them reduce carbon emissions. However, CenterPoint’s pilot did not assuage some stakeholders’ concerns around the carbon footprint (due mainly to potential methane leakage across transmission, distribution, and service lines) and scalability of RNG in the building sector. A potent greenhouse gas, methane carries risks of combustion and negative effects on indoor air quality and human health. CenterPoint Energy’s RNG proposal is pending approval by the Minnesota Public Utilities Commission.

Among the many emerging fuels and technologies that could reduce or eliminate emissions from natural gas end uses, the team considered:

• Air source and ground source heat pumps
• District energy systems (including, but not limited to ground source heat district energy systems)
• Local biogas
• Nationally sourced renewable natural gas
• Power-to-hydrogen
• Power-to-gas
• Efficient Wood Pellets
• Carbon capture technology

The team determined that a statewide potential study would help to better understand the technical and economic potential for each technology above. To draw effective comparisons, we recommend a full greenhouse gas accounting for each fuel and technology. Such a study could be completed by an independent third party, with review and guidance from a technical advisory committee made up of Minnesota stakeholders and experts.

Potential next steps

To ensure the successful and timely decarbonization of Minnesota’s natural gas end uses, we will surely need greater technical knowledge. Beyond that, Minnesota will need to engage stakeholders ranging from policymakers to regulators, clean energy and environmental advocates, consumer advocates, and local community groups, to develop one or multiple shared visions of Minnesota’s energy future that can help inform all parties of their opportunities, challenges, and potential actions.

Like the e-Lab Accelerator team, this effort will benefit from the engagement of a diverse range of interests and opinions. We believe there is both room and urgency to address all key points of view, collaboratively develop pathways towards the state’s energy future, and identify both near-term and long-term actions to get us there.

In collaboration with the groups that were part of this e-Lab Accelerator team, the Center for Energy and Environment and the Great Plains Institute (co-conveners of the e21 Initiative) are working to launch a yearlong stakeholder engagement process that is expected to begin in fall of 2019. If you’re interested in staying in touch on that process, please fill out this online form.