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Gas storage to play a key role in the future energy industry – interview with MFGT CEO Ákos Kriston

Hungary’s Gas Storage (MFGT) was among the signatories of a letter to the President of the European Commission asking to support policy tools that would enable the scaling-up of all decarbonisation options which will be needed to achieve carbon neutrality by 2050, including natural, renewable and decarbonised gases and carbon capture, utilisation and storage (CCUS) technologies.

CEENERGYNEWS spoke with Ákos Kriston, CEO of MFGT about the company’s decarbonisation’s efforts, including the deployment of hydrogen technologies and the important role of gas storage in the future energy industry.

“In order to reach carbon neutrality by 2050, it is necessary that different energy carriers participate in the decarbonisation process being provided a level playing field,” he begins. “Therefore, the EU needs to create a taxonomy and a legal environment which are technology independent and do not exclude the players of the natural gas industry from the operation.”

Many Member States recently signed a statement supporting gas and also MFGT is convinced that involving the CEOs would show how much the gas value-chain is rooted in different areas and regions of the EU, providing an affordable and sustainable energy source to citizens.

“The letter addressed to the European Commission were signed by CEOs of companies, among them natural gas infrastructure operators,” he explains. “Our objective was to make it clear for the European Commission that now they will make decisions about the legal environment which will influence the significant players’ business strategies in the European energy market. The taxonomy created by the Commission is also supposed to work as a reference for countries outside the EU. Therefore, it is of high importance that the taxonomy should cover the natural gas infrastructure working reliably for a long time.”

According to him, the letter shows that the natural gas industry is also committed to creating a carbon-neutral future and it is working so that the gas molecule should play an active role in the decarbonised value chain, mostly via its balancing role. In respect of balancing the energy system (both gas and electricity), gas storage is the tool having the highest added value.

“We trust that the Commission will realise this as well so that private and public investments keep flowing towards the gas value-chain until 2030 and beyond,” he adds.

When it comes to alternative sources, and in particular hydrogen, MFGT believes that the most cost-effective way of the spread of hydrogen technology is by using the existing and operating natural gas infrastructure.

“For that, we need to examine to what extent the different gas infrastructure elements can handle the presence of hydrogen,” Mr Kriston says. “When implementing new technology-based investments we need to consider the differences and idiosyncrasies between the CEE region and the West.”

He explains that MFGT is examining the connection between hydrogen and underground gas storage in its pilot project called Aquamarine. As part of this, MFGT intends to implement an electrolysis system and the corresponding hydrogen gas preparatory technology at the Kardoskút storage site. Creating the system in this form carries substantial innovative content and contributes to the balance of the Hungarian electricity system.

“The blend of natural gas and produced green hydrogen will be utilised within MFGT’s own gas-operated equipment resulting in reduction its own CO2 emission,” Mr Kriston continues. “Furthermore, this H2-CH4 [hydrogen-methane] blend can be injected into the gas transmission system – strictly complying with gas quality and safety instructions – and could be part of the supply to end-users. The spillover effect of the project will give ground to the widespread use of hydrogen utilisation/-based technology.”

He goes on saying that besides investing in assets, this project also contains a high magnitude of research and development work.

“Our midterm strategy contains that we should become the leader of applied industry research (R&D knowledge centre) in the CEE region,” he says. “In order to reach this, we would like to cooperate with Hungarian universities and due to the high innovation content, sharing international knowledge is also important. Accordingly, we further participate in the work of GIE [Gas Infrastructure Europe] and also that of Hydrogen Europe and the Clean Hydrogen Alliance. By the realisation of the pilot project we prove that we are committed to the creation and support of smart sector integration.”

Indeed, MFGT’s ultimate goal is to become the leading Southeast-European storage operator. As underlined by Mr Kriston, MFGT’s role is twofold. On one hand, to ensure and contribute to the security of natural gas supply of Hungary. On the other hand, to supply traders with flexible, marketable products of storing gas.

Nowadays, in order to become an energy leading company, sustainable commitments are a must. And MFGT is constantly monitoring and assessing its stakeholders’ actions on the environment.

“We continuously strive to decrease these effects and mitigate risks by our action plans,” points out MFGT CEO. “Moreover, we have just become carbon neutral company by using green electricity, having invested into a Hydro Power Plant project in India and supporting an organisation that plants trees and protects forests in Hungary (Erdőmentők Alapítvány).”

In addition to that, each year MFGT has several smaller projects aiming to the increase of energy efficiency and last but not least it operates two 0.5 megawatts (MW) solar power plants at the Zsana site in Southern Hungary.

Despite the coronavirus outbreak, gas operators adapted quickly assuring the security of supply, especially for the upcoming winter season. Still, there are some uncertainties in gas demand.

“As the key element of the gas infrastructure, MFGT reacted promptly the altered circumstances caused by COVID 19, business continuity and reliable, safe operation have been assured all year,” recalls Mr Kriston. “Our customers have been accustomed to operational excellence and we wish to maintain this level and handle challenges accordingly. Our capacities are fully booked for the 2021/2022 season, which also indicates that the market relies on gas storage for flexibility, balancing and security of supply. It will obviously be difficult in the future to maintain this 100 per cent level of booking. Several elements influence it, among them international supply directions and the spread of new energy carriers.”

Nevertheless, Ákos Kriston still believes that gas storage is the one and only tool that can provide flexibility at a large scale, therefore it will keep playing a key role in the future energy industry.

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