Natural gas, particularly LNG, will be critical in the shift to a lower-carbon future. (Image source: Adobe Stock)

A new Horizons report from Wood Mackenzie highlights the role of gas in the energy transition, supporting renewables and accelerating the shift away from coal

The report, titled "The bridge: Natural gas's crucial role as a transitional energy source" argues that despite the growth of renewable energy, natural gas remains fundamental to meeting global energy needs and reducing emissions in the medium term.

"Gas demand has surged by 80% over the past 25 years, now meeting almost a quarter of the world's energy needs," said Massimo Di Odoardo, vice president of gas and LNG research at Wood Mackenzie. "Its success lies in the scale of global resources, low production costs, ease of storage and dispatch, and comparative environmental advantages."

Despite growing electrification, increasingly delivered by renewable power sources, and the adoption of emerging low-carbon technologies, progress is currently too slow to achieve net-zero emissions by 2050. With coal still accounting for 30% of the world’s energy needs, shifting to gas as a transition fuel is a compelling option.

Key findings

Key findings from the report include:
• Gas produces only half the carbon dioxide of coal and 70% of oil when burned, and generates considerably less pollution, making it the cleanest fossil fuel option.
• Replacing coal with natural gas has already helped deliver substantial CO2 reduction and can help decarbonise markets across Asia which remain dependent on coal.
• Gas-fired plants are key to provide reliable and flexible supply supporting the integration of intermittent renewable energy sources.
• Natural gas can act as a catalyst for advancing other lower-carbon technologies, including carbon capture and storage (CCS) and low-carbon hydrogen.

Challenges 

The report also highlights challenges facing the gas industry, such as high LNG prices acting as a brake on adoption in Asia.

“In China and India, where gas usage is mainly used for peak shaving, gas demand is still expected to grow by almost 100 bcm through to 2050 in the power sector, offering the most practical option for ensuring flexibility as renewable investments surge,” said Di Odoardo. “Without a carbon price of around US$100/tonne, reducing China’s and India’s dependency on baseload coal looks like a massive ask. But the prize could be a reduction of more than 300 Mt of CO2 by 2035.”

Its CO2 and methane emissions also need to be addressed to ensure it remains attractive as a bridging fuels, although the reports points out that LNG has around 60% lower GHG intensity than coal.

The report concludes that natural gas, particularly LNG, will be critical in the shift to a lower-carbon future, bridging the gap as emerging low-carbon technologies strive to reach critical mass.

Only 9% of hydrogen projects have reached FID. (image source: Adobe Stock)

A new report from the UK’s Energy Industries Council (EIC) finds that energy industry confidence in reaching global net-zero targets is declining sharply, with policy instability, financial uncertainty and slow project approvals cited as obstacles to progress

Only 16% of senior energy executives interviewed for the EIC’s Net Zero Jeopardy Report II now believe the world can achieve net zero by 2050, down from 45% last year, with growing concerns over the lack of clear regulatory frameworks, underinvestment in clean technologies and delays in bringing projects to the final investment decision (FID) stage. Only 14% of respondents believe their country will meet 2030 climate goals, down from 16% in last year’s report. Globally, 5% believe interim targets will be met, compared to 11% a year ago.

A key issue is financing, with investors cautious about backing new clean technologies, particularly in sectors such as hydrogen, carbon capture and storage, and grid infrastructure. Executives say that while the private sector is willing to invest, the absence of long-term, stable policies creates financial risk.

The report points out that rates for clean energy projects remain very low. Despite ambitious targets, only 10% of offshore wind projects and 9% of hydrogen projects have reached FID, compared to 21% for upstream oil and gas. In the UK offshore wind sector, for example, lengthy permitting processes, grid access constraints and an uncertain investment climate are factors behind the slow pace of new projects moving from planning to construction.

Supply chain vulnerabilities

The report also highlights concern about supply chain vulnerabilities, particularly in clean technology manufacturing and logistics, pointing out that the reliance on China for many renewable energy project components raises concerns about energy security, trade policy, and supply chain resilience. There are also concerns about manufacturing capacity and skills availability.

“The energy industry is facing real challenges in turning pledges into projects,” said Stuart Broadley, EIC CEO. “Business leaders are not seeing the level of policy certainty or investment required to deliver net-zero ambitions. We need a lot of immediate reforms that speed up licensing processing and cut other red tape, ensure consistent policy and regulation, have the right financial incentives.”

“The data leaves no room for optimism—confidence in net-zero targets is collapsing across the energy sector,” said Mahmoud Habboush, author of the Net Zero Jeopardy II report. “Industry leaders are not merely expressing frustration, they are passionately warning about fundamental barriers, including unstable policy, weak investment appetite, and slow project approvals. And these barriers, if left without tackling, will no doubt derail the energy transition.”

“For many, one clear path toward net zero is ensuring that energy projects are commercially viable. For that to happen, work needs to be done on the demand side, including facilitating a regulatory environment conducive to creating demand. This will make banks less apprehensive, and more capital will flow.”

It is hoped the collaboration will set the stage for pioneering geothermal energy solutions in Saudi Arabia. (Image source: Adobe Stock)

Geothermal energy development in Saudi Arabia is set to advance with the signing of an MoU by EDF Saudi Arabia and TAQA Geothermal Energy Company to collaborate on geothermal energy technologies

These will include power generation and HVAC applications as well as compressed air energy storage in Saudi Arabia.

Saudi Arabia aims to achieve net zero greenhouse gas (GHG) emissions by 2060, and has set the goal of sourcing at least 50% of its power from renewable energy by 2030. Geothermal energy, which harnesses the heat produced from the Earth's crust and converts it to cooling, heating, desalination, or direct electricity generation, is a renewable and sustainable form of energy. It has the advantage of being a constant and reliable energy source compared to other renewable energy sources such as solar and wind, given it is not affected by seasonal or weather variations. Saudi Arabia has vast geothermal energy resources, in particular along the Red Sea coast, home to volcanic fields and hot springs. TAQA Geothermal, a joint venture between Taqa Energy and Reykjavik Geothermal (RG) is playing a leading role in pursuing opportunities to explore, assess, and develop geothermal resources in the kingdom and the region with the ultimate target of adding 1GW of sustainable geothermally produced energy to the energy mix.

EDF Saudi Arabia operates in the areas of thermal, renewables, district cooling, and energy efficiency, with a focus on aligning its R&D efforts with the strategic objectives of the Saudi Arabian government and Vision 2030.

Omar Aldaweesh, CEO of EDF Saudi Arabia, said: “Over the past decade, we have been actively contributing to the Kingdom’s energy landscape through our expertise in sustainable solutions, and this MoU further strengthens our role in advancing innovative technologies. By collaborating with TAQA Geothermal, we are leveraging our extensive experience to explore new frontiers in geothermal energies and compressed air energy storage. This initiative is fully aligned with both Saudi Arabia’s Vision 2030 and EDF’s Ambitions 2035, reinforcing our shared commitment to sustainability and to the country’s transition to a cleaner energy future.”

Meshary Alayed, CEO of TAQA Geothermal, added, “Geothermal energy utilisation whether via direct heat use or electricity generation is a critical and untapped resource to drive the global transition to clean energy, as it is a reliable, renewable base load resource. The partnership between EDF and TAQA Geothermal in the field of geothermal solutions redefining space cooling, will have tremendous positive impacts on efficiency and carbon footprint reduction. The combined strengths will demonstrate cutting-edge geothermal cooling systems for the Kingdom’s growing energy needs while supporting Saudi Arabia’s Vision 2030 in economic diversification and the Ministry of Energy’s renewable energy mandates.”

It is hoped this collaboration will catalyse pioneering geothermal energy solutions in Saudi Arabia, paving the way for cleaner and more efficient power and cooling technologies.

The partnership marks a significant step forward in the global expansion of green hydrogen technology. (Image source: Siemens)

Technology company Siemens, China-based Guofu Hydrogen and Germany-based RCT GH Hydrogen are collaborating to advance the hydrogen value chain

The partnership is set to accelerate the global expansion of green hydrogen technology as it focuses on the development and manufacture of electrolysers and green hydrogen production. A recent report from the IEA highlights the growing momentum for low-emissions hydrogen, but notes that while global electrolyser manufacture capacity has grown significantly, progress is stalling due to higher prices and tight supply chains. A continuation of cost reductions relies on technology development, as well as optimising deployment processes and moving to mass manufacturing to achieve economies of scale, the IEA says.

The new partnership focuses on three key areas: developing and engineering Guofu’s electrolysers and electrolyser systems, equipping new electrolyser manufacturing facilities starting in Germany, and developing, constructing, and operating new hydrogen production plants.

RCT GH Hydrogen will lead the engineering, procurement, and construction of state-of-the-art hydrogen production facilities, and ensure that the electrolyser manufacturing facilities meet the highest efficiency and safety standards.

Siemens will be the preferred supplier and technology partner across the entire value chain of Guofu Hydrogen's expansion plans. It will deliver products, solutions and services from across its Siemens Xcelerator portfolio, the company’s open digital business platform, including industrial automation and instrumentation, as well as electrification and building technology, industrial communication, and cybersecurity solutions. Siemens will also provide digital services and software for the design, engineering, simulation, optimisation and standardisation of the entire hydrogen value chain, from electrolyser manufacturing to the operation of hydrogen plants.

Global hydrogen partner ecosystem

The collaboration also involves the development of a global hydrogen partner ecosystem to bring together suppliers, technology providers, and end-users to accelerate innovation and standardisation across the industry, supported by the Siemens Xcelerator, which enables seamless integration and collaboration throughout the value chain.

"This strategic partnership exemplifies Siemens' commitment to driving the industrialisation of green hydrogen production," said Axel Lorenz, CEO of process automation at Siemens. "Our portfolio and domain expertise, combined with Guofu Hydrogen's vision and RCT GH Hydrogen’s proven engineering capabilities, will help establish new standards in electrolyser manufacturing efficiency and scalability. Together, we're not just building factories – we're building the foundation for a sustainable hydrogen ecosystem that will play a crucial role in the global energy transition.”

“Partnering with Siemens allows us to leverage world-class automation and digital capabilities,” added Pinfang Wu, board chairman of Guofu Hydrogen. “This collaboration will significantly accelerate our expansion into global markets and strengthen our position as a leading provider of green hydrogen solutions. Together, we're creating a blueprint for the future of hydrogen production.”