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Germany plans 'record' number of L-gas to H-gas conversions in 2021 - S&P Global

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Highlights

Industry groups see 570,000 device adjustments this year

Conversion activity expected to continue until 2030

Due to planned closure of Dutch Groningen L-gas field

London — Germany plans a "record" number of conversions of appliances in households and businesses from low-calorific gas, or L-gas, to high-calorific gas, H-gas, in 2021, two industry associations said Jan. 28.

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About 570,000 device adjustments are planned this year -- more than for any other year -- the BDEW and DVGW industry bodies said in a joint statement.

In total, some 5 million gas appliances such as boilers, kitchen stoves or water heaters in private households and businesses will have to be converted by 2030, they said.

Parts of northwestern Germany have traditionally been dependent on imports of L-gas from the giant Groningen L-gas field in the Netherlands and from small L-gas production within Germany itself.

But the risk of earthquakes at Groningen triggered by gas production has prompted the Dutch government to cap production and close the field by mid-2022, much earlier than the 2030 end-date that had been previously envisaged.

L-gas consumers in Germany have been undergoing conversion work to be able to use H-gas, which is the majority of gas supplied in Europe, for several years already.

The switchover now needs to be accelerated, given the nearer-than-expected date for Groningen's closure, with about 60% of German L-gas consumption estimated to be provided by imports from the Netherlands.

"The conversion from L-gas to H-gas is one of the largest infrastructure projects in the gas industry," the industry associations said.

A total of 27 distribution system operators and five transmission system operators are involved in the conversion projects, the industry bodies said.

"The change has been going on for several years and is expected to last until 2030," they said.

They added that the coronavirus pandemic complicated the "already daunting task" of converting the market area, with visits to properties by fitters only possible under strict safety conditions.

Despite restrictions caused by the pandemic, 99% of the 400,000 planned conversions took place unhindered in 2020, they said.

Future role

The German Energy Agency continues to push gas as a necessary fuel in the country's energy mix in future against a background of the planned phase-out of coal and nuclear.

The agency's chairman, Andreas Kuhlmann, said in a statement Jan. 27 that gas would play "an important role" in transforming the energy system.

"The current debate does not take this sufficiently into account and harms the search for the best possible path toward climate neutrality," Kuhlmann said.

Gas infrastructure, he said, would also make an "important contribution" to the transition to a climate-neutral energy supply based on hydrogen and green gases.

"A debate that only considers an end goal, but closes itself off to the challenging transformative processes on the way there, does not do justice to the requirements of a cost-efficient and politically sustainable energy transition."

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