Raúl Suárez has barely been at the helm of Nedgia for just 40 days, the company owned by Naturgy that manages one of the most essential and unknown businesses for Spaniards: the networks that supply gas to homes and businesses.
This expert in gas and electricity networks has as its first objective to connect the third gas network in Europe, with almost 60,000 kilometres, to renewable gases, which he considers “the spearhead of the energy transition”.
The last two years have been those of greatest prominence for gas. But Nedgia, his networks and his business remain unknown.
The best thing that can happen to the gas networks is that they are unknown to the general public. That means they work fine. That everyone receives gas without problems in their homes and in their businesses. Networks are the backbone of energy systems, they supply gas from any provider. Nedgia is the company that makes it possible for you to enjoy energy in your home.
Is there any part of the rise in gas prices in this crisis that can be blamed on the networks?
None. Quite the opposite. Distribution costs are regulated costs. In fact, they have been decreasing each year and are not expected to increase.
The European Union has declared war on natural gas. How does it affect a company that is the “backbone” of the gas system?
We believe that the engine of the new European ambition to transition to decarbonised energy is biogas or biomethane (both terms are used), and for this reason we must encourage its takeoff. The war in Ukraine has forced Europe to face the challenge of balancing what in the sector is called the trilemma energetic. In other words, moving towards the reduction of emissions while guaranteeing security of supply and energy independence without neglecting that these challenges must be achieved while guaranteeing economic and social sustainability and affordable energy costs.
“That the gas networks are unknown is good, it means that everything works well”
Does squaring the circle seem more than a trilemma?
We must refocus the way to reduce emissions. This effort is embodied in the RePower document that the EU approved to deal with the consequences of the war. The binding objective has been set for 10% of the gas circulating on the continent in 2030 to be renewable. That is why at Naturgy we understand that renewable gases are the engine of the new energy ambition.
What role will Naturgy play in this transition?
We are going to focus our growth on promoting the development of biogas plants. Biomethane in the first place, and in the future we will work to inject green hydrogen into our networks to be able to link them to the users.
Green hydrogen or biomethane?
They are not incompatible things. Hydrogen is an energy that has a promising future, but it still has to face great challenges of technological development and economic viability. It must find a way to produce on an industrial scale in order to lower its current costs and be competitive for industrial and residential customers. It is necessary to invest in the present so that this can be a reality in the energy mix of the future. It is not a present solution.
Of course. Biomethane is a renewable gas that is obtained from waste. It already has a mature technology that is deployed all over the world. Germany has more than 11,000 plants. France puts one into service every week and has shown that it is profitable. Spain only has five plants and that is the country with the third largest biomethane potential in the entire EU. We have to focus on developing that potential.
“Spain has the third largest biomethane production potential in the entire European Union”
Is there a lack of business or political interest?
None of them. Biogases come to solve a problem that the industrial fabric of livestock, agriculture and even urban waste treatment has latent in many territories today. Hence the great potential that he mentioned. Both businessmen who have this waste and investors interested in us helping them in this transformation to inject these renewable gases into the network are calling us. We currently have 180 requests for interest. Our interest is to connect both needs and boost generation.
Are the authorities the ones who look the other way?
What has happened so far is not worth spending time on. The important thing is that the Government is sensitive to the great opportunity that biogases offer from the energy point of view and also to the positive externalities that it generates, especially in rural areas. We are working with the Generalitat, which is taking its commitment to biogas very seriously. It is a model to stand out at a national level. He is very clear that it is a good solution to the great problem of waste that he has in the agricultural environment.
What are you doing to promote it or what should be done in the country as a whole?
Catalonia has just published a specific regulation. With an initial provision of 25 million euros to take advantage of livestock waste and organic waste to obtain biogas. At the national level, the first step is to reflect this opportunity in the National Energy and Climate Plan that the Government will review in the coming months. In which, at least, it sets a challenge that 10% of the gas circulating through the network in 2030 be biogas, in line with what is established by the EU. Then Spain must take a good look at what they have done and what are the mechanisms that countries like France and Germany have implemented to promote this development.
And what have they done?
Encourage their production with incentive schemes, which are very heterogeneous.
If biomethane production is already financially profitable, why consider public aid?
Every fledgling mechanism needs some stimulation at the beginning. They can be grants, contract for difference schemes, investment aid, compensation schemes. But what drives?
“The connections to export gas work at 43%, we have room to produce more and export it”
Is the Nedgia network ready to deliver biomethane to Spanish homes now?
Unlike what happens with hydrogen, to transport biomethane you do not have to make any adjustments to the current gas network. We have the most modern network in Europe. Households and industries would not have to do anything either. Everything would work the same as it does now with natural gas. With the difference that the gas consumed would be much more respectful of the environment.
With this potential that points to the production of biogas, is it a problem that the gas connection with France, Midcat, has not materialized?
We currently have two gas interconnections with France which, despite market tensions this year, are operating at 43% of their capacity. We have margin to produce gas and export it. In this sense, we will not have any problem to release the excess gas.