How does a gas company achieve net-zero? By increasing energy efficiency and electrification, substantially replacing fossil gas with renewable natural gas (RNG), and deploying emerging low-carbon technologies, says Quebec-based gas utility Énergir, in a series of moves that have sparked curiosity and scrutiny from outside experts.
Énergir recently released its 2023 Climate Resiliency report [pdf], which outlines a plan to reach net-zero emissions by 2050 for each of its three subsidiaries: Énergir in Quebec, and Green Mountain Power (GMP) and Vermont Gas Systems (VGS) in Vermont.
All three companies “strive to be proactive leaders in the fight against climate change thanks to the energy they distribute (and, where applicable, produce) while supporting their customers and society with innovative solutions that decarbonize their activities,” the report states.
Their reach is significant: In Quebec, Énergir manages an 11,000-kilometre network to distribute roughly 97% of the province’s natural gas consumption for about 212,000 households and businesses in more than 340 municipalities. GMP distributes more than 76% of the electricity used in Vermont by more than 273,000 customers, while VGS reaches some 55,000 as the state’s sole gas distributor.
The report was informed by projected scenarios and expert advice by Dunsky Energy + Climate Advisors, a research and analysis firm that focuses on accelerating the clean energy transition at scale.
“Reasonable people can disagree on individual components of the pathway (which will no doubt evolve),” company president Philippe Dunsky posted on LinkedIn. “But the fact that a gas utility is publishing a clear and honest vision of decarbonization, one that involves hard choices AND a clear endgame in terms of emissions—is laudable.”
Énergir claims that its system in Quebec, which it says is in good condition, the vast territory it covers, and its relative resilience to climate change put the company in a position to make a positive contribution to the energy transition. The Quebec strategy boils down to increasing energy efficiency and electrification to cut back natural gas use by 50%, replacing two-thirds of its remaining natural gas supply with RNG (essentially biogas), and decarbonizing the remaining natural gas use—particularly for industrial clients—with a mix of hydrogen fuel and carbon capture and storage (CCS) technologies. According to the report, the continued use of natural gas is important in Énergir’s system to help “meet peak and seasonal energy needs at the best cost, especially in a cold climate like Quebec’s.”
The company says it has already achieved its regulatory target of reaching 1% RNG delivery in Quebec for fiscal year 2023, and claims it is well positioned to meet the targets of 2% for 2024 and 5% for 2026.
But that might be too much reliance on RNG—a fuel that several industries and stakeholders are competing for, Normand Mousseau, scientific director at the Trottier Energy Institute, told The Energy Mix. On top of concerns about whether there will be enough RNG capacity to meet Énergir’s expected needs, he said tensions among stakeholders across the RNG supply chain—about who can claim the environmental attributes for producing, using, or distributing the fuel—could get in the way.
Moreover, gas in buildings, even RNG, is incompatible with a net-zero target, Mousseau added. There are practical challenges to using CCS to decarbonize gas used for heating buildings—and there will be cheaper options than RNG for heating buildings. Though some studies suggest it is technically possible to pair CCS with natural gas in buildings, he said it’s not realistic to do so at scale.
Énergir, for its part, states that “the technologies that help reduce greenhouse gas emissions from this sector are technically and commercially viable.”
Mousseau said the Trottier Institute has been critical of Énergir’s 2022 partnership with Nature Energy to develop biomethane facilities in Quebec. The report touts the plant for increasing the availability of RNG, but Mousseau maintains it “is not compatible with our climate objectives.”
Énergir’s plans to increase energy efficiency do hold up, Mousseau added, though increasing consumer efficiency is low-hanging fruit for regulated energy companies like Énergir, whose bottom line is determined by returns on infrastructure to bring energy to customers—not by the amount of energy those customers use.
“Energy efficiency is the keyword, and all these distributors use it because energy efficiency doesn’t change,” he explained. If customers use a bit less electricity, the distributor doesn’t care because “what matters is how much infrastructure you have…if you sell less gas, you will just charge more, especially if you know that the electricity company cannot replace you or will not want to heat with electricity.”
Outside Quebec, Énergir’s Vermont subsidiaries are benefitting from the state’s regulatory environment, including initiatives that expand access to battery storage and heat pumps. Compared to Quebec—where electricity distribution is dominated by government-owned Hydro-Québec—the regulatory environment in Vermont is more dynamic and allows for a more integrated approach to the energy system.
Énergir does acknowledge it will benefit from Vermont’s recent Affordable Heat Act, which encourages people to adopt low-carbon and economical heating method. Customers could even benefit from the state’s adoption of aggressive GHG reduction targets, the utility says, because Green Mountain Power, a longtime leader in the clean energy space, “is already well positioned to offer decarbonized solutions to Vermonters that will grow load, which will reduce pressure on rates.”
