With international summit COP26 heading towards its conclusion, the controversial event has seen emission reduction commitments and pledges made by the international energy community, including countries and organisations, from a breadth of sectors. One such area looking to transform the way it consumes and provides energy is the power industry.
Focusing on UN Sustainable Development Goal 7 (SDG 7), Powership manufacturer Karpowership spoke to gasworld about its use of liquefied natural gas (LNG) as a tool to both reduce emissions and to transition to more sustainable fuels.
As the owner, operator and builder of the world’s only Powership fleet, Karpowership uses these floating power plants to generate electricity and supply countries around the world. The company has 5,000 MW installed capacity and another 3500 MW is under construction or in the pipeline.
When asked about what the company is doing to advance LNG’s role in the energy transition, Mehmet Katmer, Business Development Director, Karpowership, elucidated on its pioneering global LNG-to-power projects.
“We have spent many years pioneering the combination of robust LNG-power plants with ships capable of deploying anywhere in the world within accelerated timeframes,” explained Katmer.
“More recently, with our joint venture KARMOL, we’ve been building Floating Regasification and Storage Units that are specifically designed to work with our Powerships.”
KARMOL is a partnership with Japanese shipping giant Mitsui OSK Lines. Recent projects undertaken by KARMOL include a series of vessel conversions – turning LNG carriers into FSRUs.
This easy adaption differentiates its FSRUs from others on the market and aims to boost the reach of LNG-to-power projects around the world. Katmer added that the company’s long-term plan is to offer not only use of a Powership in any contract, but also the supply of LNG to any partner country with no indigenous gas source.
“It means more countries will have access to LNG to help them on their energy transition,” he said.
LNG, a bridge between fossil fuels and renewable energy…
By generating 30% less carbon dioxide (CO2) than fuel oil and 45% less than coal, LNG is regarded as the ‘cleanest’ fossil fuel. With natural gas use expected to account for 25% of the world energy portfolio by 2035, LNG is seen as an ideal energy alternative to help reduce greenhouse gas (GHG) emissions and to ‘bridge the gap’ between more harmful fossil-based fuels and future sustainable technologies such as hydrogen.
”LNG can service as a backbone of stable energy production while markets build their investment in renewables…”
Calling it a ‘sustainable, affordable way’ of meeting the power needs of developing countries while renewables continue to scale up to required levels, Katmer added, “LNG can service as a backbone of stable energy production while markets build their investment in renewables and it’s a reliable base on which to build a long-term hybrid solution cleaner power.”
The company believes that the use of LNG will help make meaningful progress towards the goals set by the UN SDGs and the Paris Agreement – both hot topics at COP26 – as well as creating a viable commercial environment for the long-term development of renewables.
Advantages and challenges of an easy-access LNG supply
By having relatively easy-access to an LNG supply, markets with urgent and large-scale energy needs can harness an alternative, cheaper source that eliminates the reliance on environmentally damaging methods of energy production such as diesel generators and coal-burning power plants.
Despite not seeing any long-term downsides to using LNG as a primary fuel source, Katmer stated that, given high global market prices and the ongoing pandemic, the industry is not without its challenges.
“The global market has driven up the price as we have all emerged from the pandemic. This creates real challenges, particularly in the spot markets for short term gas cargoes. We don’t, however, see this persisting.”
“Global gas production is mature and flexible and while prices may not fall back to the lows we saw in recent years, we do believe they will continue to be affordable for long-term development,” he explained.
Added challenges also arise with ambitious goals, a concept not unfamiliar to Karpowership. With an aim to ‘at least’ double the company’s LNG assets over the next five years, it wants to raise its natural gas and LNG-powered global operational energy supply from 50% to 80% by 2025 before eventually reaching 100%.
“At the moment we are still seeing huge demand for LNG. We believe there are still more countries that could be harnessing natural gas to generate electricity,” said Katmer.
Attempting to meet this demand means collaborating with partners to support the construction of new FSRUs, increasing the capacity of both Karpowership and of wider industry to deploy LNG-to-power.
COP26 and LNG development
The development of LNG and its role in the transition to renewable energy is a key component of today’s (11th November) focus on COP26. With the main topic being ‘Cities, Regions and Built Environment’, the day centres around advancing action in communities, cities, and regions.
The work in FSRUs being undertaken by Karpowership in Africa, such as the KARMOL joint venture in Senegal, could help support this advance. Steps have also been taken to enhance the first LNG-to-power project in Mozambique, which is being worked on alongside the country’s electricity utility company, Electricidade de Mozambique (EdM). An LNG-to-power project is also being worked on in partnership with the Ivory Coast.
As the preferred bidder for three electricity sites in South Africa, Karpowership will be providing the country with 1220 MW of electricity once the contracts are successfully concluded.
Additional projects will see the company entering the Brazilian market with four projects that will produce 560 MW of electricity utilising LNG. A Memorandum of Understanding (MoU) signed between Karpowership and Qatar-based Nakilat also lends scope for a further FSRU venture.
In an exclusive interview conducted earlier this year with Zeynep Harezi, Karpowership Managing Director, Harezi revealed that the Covid-19 pandemic could prove to be a ‘turning point’ in African LNG development. She said that the impact of Covid-19 on Africa has left millions unable to afford electricity.
While the rest of the world focuses on harnessing green energy and renewables, Harezi recognised that Africa could take advantage of the opportunity afforded by LNG to provide the continent with electricity and also help to meet SDG goals.
“I think we need a shot of reality,” she said. “If we still want to reach the admirable SDG7 goal of universal access to electricity by 2030, the world needs to be far more realistic about how we get there.”
“Natural gas and LNG in particular has to be a central part in bridging the gap…”
“Natural gas and LNG in particular has to be a central part in bridging the gap – LNG uses established technology, is cleaner than the coal and diesel power currently available, and it facilitates a rise in electricity capacity while renewables are expanded,” she added.
This bridging - and in turn meeting net zero targets with renewables - Katmer believes, can only be achieved by establishing partnerships, such as those formed at COP26.
“Leaders of governments and business also need to think about ways different fuels can work in partnership on the energy transition.”
“LNG can play a central role, as long as the right attitude is taken towards its uses and benefits as a transitional fuel for countries at risk of falling behind on climate goals or, even worse, simply not reaching them at all,” he said.
Katmer noted that although it’s important to meet renewable energy goals, a significant part of the global climate change mission is also about focusing on the individual impact and helping to ensure the international provision of what should be a basic human right.
“It’s about ensuring everyone has access to cleaner power and agreeing that we will do all we can to help those who are being left behind on UN SDG7, universal access to electricity,” he concluded.