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Natural Gas:Status, Challenges and Opportunities for Heating Fuels Systems in Ontario Keith Boulton Director Energy Conservation Strategy Union Gas
Status: Natural Gas Basics • Natural gas is the cleanest burning conventional fuel: • 45% less CO2 than coal • 30% less CO2 than oil • Domestically available: • 98% of natural gas consumed in Canada & US is produced in North America • Efficient: • 90% of natural gas’ energy value is delivered to customers • Customers today use 40% less natural gas than 40 years ago • Abundant: • Over 100 years of proven supply
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
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 • right fuel for the right application
Emergence Of NA Shale Resource Shale reserves are helping to provide 100+ years worth of supply
Future Supply into Ontario /Dawn Declining Western Canada Supplies New Supplies – US ROCKIES New Supplies - MARCELLUS New Supplies –MID-CON & GULF COAST SHALES
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: • $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
15.5% Transmission & Distribution Loss1 Gas Water Heater Total gas water heater efficiency: 49.0%* (.59 energy factor) 84.5% Full Fuel Life Cycle Cost Comparison Electric Water Heater Total electric water heater efficiency: 28.3%** (.88 energy factor) 32.3% 35.5% Generation Efficiency1 3.2% Transmission & Distribution Loss1 • 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
Major Gas Fired Power GenerationOntario Power Market Growth Phases Ontario long Term Energy Plan Potential to ~15,000MW ~9,000 MW ~6,700 MW Increasing Natural Gas Penetration in Ontario ~4200 MW ~3,100 MW ~1,000 MW Union Franchise Enbridge Franchise Other
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”: • CHP and Micro-CHP • Micro-grids • District Energy Systems • On-site integration of natural gas and renewables: passive solar
A Vision for Integrated Community Energy Diagram from Tokyo Gas
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: • Improve Efficiency • Optimize Exergy • Manage Heat • Manage Waste • Use Renewable Sources • Use Grids Strategically
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: • 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
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