Natural Gas: Status, Challenges and Opportunities for Heating Fuels Systems in Ontario Keith Boulton Director Energy Conservation Strategy Union Gas 1 Status: Natural Gas Basics • Natural gas is the cleanest burning conventional fuel: • • • Domestically available: • • • 90% of natural gas’ energy value is delivered to customers Customers today use 40% less natural gas than 40 years ago Abundant: • 2 98% of natural gas consumed in Canada & US is produced in North America Efficient: • • 45% less CO2 than coal 30% less CO2 than oil Over 100 years of proven supply Union Gas. For the energy. Union Gas Distribution Area 3 Union Gas. For the energy. Status: Natural Gas in Ontario • 3.2 million residential, commercial and industrial customers serviced by Enbridge Gas Distribution and Union Gas Ltd. • In the residential market: 95+% of customers use it for heating • 85+% use it for domestic water heating • 20-25%% use it for cooking • 20-25% use it for clothes drying • 4 Union Gas. For the energy. Opportunities: Energy Efficiency • Since 1997, through DSM programs, Union Gas has helped customers: • save 820 million cubic meters of natural gas • • 1.6 million tones of CO2 emissions – the equivalent of taking more than 295,000 cars off North American roads Moving from a “programmatic” view of energy efficiency to a “market transformation” view, ie: • high efficiency furnaces • • Energy Star for new homes Importance of full fuel cycle cost analysis • 5 right fuel for the right application Union Gas. For the energy. Emergence Of NA Shale Resource 6 Shale reserves are helping to provide 100+ years worth of supply Union Gas. For the energy. Shale Projection 7 Union Gas. For the energy. Future Supply into Ontario / Dawn 8 Union Gas. For the energy. Opportunities: Fuel switching water heaters, dryers, furnaces, ranges: 10 year potential • 1,100 MW (DD) to 6,400 MW (CD) saved • 6 million tonnes of GHG emission reduced (gross) • Average cost per MW saved: • • • 9 $58,000 (CD) to $335,000 (DD) 10% (CD) to 60% (DD) of gas fired generation per MW 3% (CD) to 20% (DD) of renewable generation per MW Union Gas. For the energy. 15.5% Transmission & Distribution Loss1 Gas Water Heater Total gas water heater efficiency: 49.0%* 84.5% Full Fuel Life Cycle Cost Comparison (.59 energy factor) Electric Water Heater Total electric water heater efficiency: 32.3% 28.3%** (.88 energy factor) 35.5% Generation Efficiency1 3.2% Transmission & Distribution Loss1 1. • ** Natural Gas and Electric Residential Appliance Efficiency and GHG Emissions: A Complete Fuel-Cycle Perspective Assuming a 40 Gal natural gas water heater with an EF of 0.59 Assuming a 40 Gas electric water heater with an EF of 0.88 10 Union Gas. For the energy. Major Gas Fired Power Generation Ontario Power Market Growth Phases CES Coal Closure Early Movers Lennox Conversion • SRCP 505 MW 2003 • BBPS 550 MW 2004 • IOL 95 MW 2004 • St. Clair 577 MW 2008 • GEC 1005 MW 2008 • Sithe Goreway 839 MW 2009 CES Ministerial Directive • Portlands 550 MW • EWC 84 MW • HHGS 680 MW • Thorold 236 MW • York Region 393MW 2009 2009 2010 2010 2011 • 1050 MW 1998 • 1050 MW 2000 • Nanticoke Ignition 1998 11 NUG Market Union Franchise • Union North 777 MW 1990-1997 • Union South 185 MW 1996 Enbridge Franchise Other Union Gas. For the energy. Going Forward: Integrated Energy Systems • • • The majority of natural gas power generation in Ontario is still confined to large scale centralized systems Decentralized and integrated energy systems is the next path to lead Fundamental to this thinking is to move from the current discussions of “smart grid” to a wider view of constructing a “smart energy network”: • • • • 12 CHP and Micro-CHP Micro-grids District Energy Systems On-site integration of natural gas and renewables: passive solar Union Gas. For the energy. Smart Electric Grid 13 Union Gas. For the energy. A Vision for Integrated Community Energy Conceptual Scheme of the Smart Energy Network Diagram from Tokyo Gas 14 Union Gas. For the energy. Quality Urban Energy Systems of Tomorrow • • The Canadian Gas Association was instrumental in founding QUEST five years ago The mission is to have every community in Canada operating as an integrated energy system: • • • • • • 15 Improve Efficiency Optimize Exergy Manage Heat Manage Waste Use Renewable Sources Use Grids Strategically Union Gas. For the energy. Opportunities: Biomethane • • Biogas from anaerobic digestion and gas from landfill sites can be upgraded to biomethane and injected into the natural gas system Enbridge & Union are working jointly to establish a Biomethane Reference Gas Price: • • 16 Enable the biomethane market by establishing appropriate pricing and supply contracts Looking to the future new “gasification” technologies can further transform the market by allowing biomass to be moved via pipeline Union Gas. For the energy. Natural Gas future in Ontario Over the last decade, natural gas has often been referred to as a “bridge fuel”—going forward it is a “foundation fuel” • The transformation of Ontario to a lower carbon future requires the flexibility of natural gas • The significant infrastructure of the natural gas transmission and delivery system in Ontario needs to be leveraged through integration with community energy systems • As “green gas” sources are developed (biogas and gasification of biomass), the existing infrastructure can help in directly delivering a lower carbon future • 17 Union Gas. For the energy.