Mar 2020 Interview with Mr. Markus Mitteregger, CEO, RAG Austria AG
Prisma Reports (PR): RAG is Austria’s largest gas storage company with total storage capacity of about six billion cubic meters of natural gas, it is Austria’s biggest energy storage provider – and one of Europe’s leading gas storage facility operators. The company is active in gas production, supply and trading, as well as the use of gas as a transport fuel. Can you give me a general overview of RAG, how does the company contribute to Austria’s energy system, to the good security and stability of supplies and its current transformation?
Markus Mitteregger: RAG is Europe’s fourth-largest gas storage operator, and the most modern, which reflects the fact that we constructed all of our storage capacity within the past 20 years. We are crucial to energy supply security not just in Austria but also in neighbouring countries, as our storage facilities are linked to their gas grids. This means, in turn, that also the central European region’s flexible power generation sector depends on us to keep its standby capacity supplied.
Prisma Reports: Energy is definitely the area where most innovation and the biggest technological breakthrough will be needed in the next couple of years, with increasing consumptions level worldwide and immense and urgent environmental issues to tackle. What are some of your priorities and ambitions today in terms of R&D, and what are RAG’s most groundbreaking innovations?
Markus Mitteregger: While we have focussed much of our efforts over the past 20 years in developing conventional gas storage facilities we have also been thinking about the role of gas storages beyond the fossil gas era. Gas is the key energy carrier of the future as it will enable us to fully utilise and balance all the up-and-coming renewable sources, such as wind and solar. In order to integrate a wide range of renewable energy sources in the energy system you need gas storages in place close to gas fired power stations, so to balance the swings between supply and demand. Hydrogen will also play a major role in the next decades, and has been a major research focus for RAG. We have been developing the first underground “sun storage” capacity, to keep the sun via hydrogen in sandstone formations around 1,000 metres deep underground. We launched our “Underground Sun Storage” project seven years ago. Wind and solar power cannot be stored on a large scale and for extended periods. Because of this, it was necessary to envision technology that delivers energy on demand and evens out supply fluctuations. The aim of this research project was to validate the use of existing gas reservoirs for seasonal storage of renewable energy in the form of hydrogen, and RAG is the first company in the world to have demonstrated the feasibility of this principle in a field project. The results showed that the reservoir and all the installations were “hydrogen capable” and their integrity was unaffected. It was possible to inject a mixture of natural gas and 10 % renewable hydrogen. This opens the way for our gas storage facilities to store renewable energy seasonally on a large scale. It means that naturally formed gas storage reservoirs are not a limiting factor within the gas system as a whole, and with their vast storage capacity, their role in the energy system of the future could change significantly, since they can be used to store and balance supplies of renewable energy.
Prisma Reports: What about your sun conversion systems?
Markus Mitteregger: During the “Underground Sun Storage” – project we discovered that another process was going on in the gas reservoir. In the presence of CO2, the hydrogen was converted into natural gas. Therefore, our R&D team was keen to start developing a follow up project, entitled “Underground Sun Conversion” to store renewable energy and generate natural gas at the same time. The aim is to utilize a microbiological reaction in the reservoir, where injected CO2 and hydrogen are converted into renewable natural gas. The aim of the research project is to use existing gas (pore) reservoirs as natural bio-reactors. We see the most widespread use of this synthetic gas as a green fuel for cars and especially heavy vehicles. RAG is already running CNG fuel stations and is producing LNG and distributing it at two new filling stations in Austria. LNG is a clean substitute for diesel in heavy duty and long haul trucking. If CO2 emission limits become stronger, renewable CNG and LNG will be an affordable and realistic solution for existing combustion engines.
Prisma Reports: How exportable are these technologies? To what extend do you think today’s urgent energy shift and technological breakthrough can be turned into economic opportunities for operators?
Markus Mitteregger: The technology will be exportable once this carbon cycle concept is fully proven, and we hope that will be the case by the end of this year. We estimate that 10% of all gas reservoirs worldwide could be suitable for microbiological sun conversion. We therefore plan to approach potential partners with solar and wind generation ambitions, and/or partners with suitable reservoirs, with a view to initiating similar projects in other countries. The availability and affordability of CO2 will be crucial, and will need to be further researched. The economics of the technology rely on low-cost CO2, and massive increase of wind and solar electric power generation.
Prisma Reports: Climate and energy are quite an important focus of Austria’s current government. Austria has committed to achieving various objectives in that area, including the target of 100 % renewable electricity by 2030, a reduction of greenhouse gas emissions of 36 % by 2030 in the energy sector, or the decarbonisation of the energy system by 2050. How is RAG Austria helping the country achieve these ambitious climate goals? What is your vision for the future of energy, and what role does gas has to play in it?
Markus Mitteregger: First, RAG’s underground gas storages are the perfect solution for this challenging problem. They provide energy on demand. To achieve the ambitious climate goals the intermittent renewables need to be balanced out for security of supply. Second, CNG and LNG can deliver immediate carbon and pollution reductions, and in the longer term there will be the option of carbon neutral CNG and LNG, made from renewable gas. All in all, then, our sun storage and conversion projects point to new ways of reusing existing natural gas reservoirs to create a sustainable carbon cycle for energy.
Prisma Reports: In your opinion what can other nations learn from Austria in regards to energy transition? What role does Austria have as a sustainability ambassador to the rest of the world?
Markus Mitteregger: We don’t have the silver bullet that will solve all of the world’s energy transition problems. It would be unrealistic to think that a single technology is the solution for all the challenges of the energy future. Therefore, it is important to work on an energy solution across sectors. With our R&D projects we want to prove that gas can be green on a large scale, and that depleted gas reservoirs will continue to play a major role in Austria and Europe energy future, either as gas storage facilities or bio-reactors to maintain security of supply. Our projects will be the basis for further research concerning the suitability of the technology to similar gas reservoirs elsewhere. We know that gas already has a broad range of applications, and can underpin safe, efficient and sustainable energy supplies. It is used to generate electricity and heat, and in transportation as liquefied natural gas (LNG) and compressed natural gas (CNG). Gas is set to be the main energy carrier throughout the world. RAG enables the best form of sector coupling.
Prisma Reports: What kind of role does RAG play on the global level? What type of international collaborations and partnership are you putting in place to grow your influence and make your voice heard on the global scale?
Markus Mitteregger: We are exchanging information with partners abroad and participating in international energy sector events. Yet we first need to provide proof of concept and obtain tangible, replicable results.
Prisma Reports: To conclude this interview what would be your final message?
Markus Mitteregger: The climate debate is the innovation driver for the energy industry and offers exciting prospects for innovators like RAG. RAG will continue to make a major contribution to Austrian and European energy supplies and storage, as it has done throughout its history. Our mission is to use the natural resources entrusted to us carefully and responsibly, to the maximum benefit of society.