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Sempra Energy's (SRE) Subsidiary Launches Biomethane Project

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Sempra Energy’s (SRE - Free Report) subsidiary, Southern California Gas Company (SoCalGas), and Electrochaea have recently brought online their first scalable biomethanation reactor system pilot project. The project is in line with Sempra Energy’s goal to become the cleanest natural gas utility in North America.  

The reactor system, at the U.S. Department of Energy's National Renewable Energy Laboratory (NREL), will use renewable electricity to convert hydrogen into pipeline quality methane for use in homes, businesses and transportation.

Rationale Behind the Project

Studies show that without long-term storage solutions, by 2025, California is expected to waste enough renewable energy each year to power Los Angeles County, the most populous county in the United States, for more than a month.  So, there is a dire need for conservation of renewable energy in the state of California and the launch of the biomethanation reactor system is a step toward that direction.

Through this project, locations in the Western United States, including California, will be identified, where grid-scale energy storage will be most beneficial and cost-effective.    

Moreover, the new bioreactor system currently operates at 50-60% efficiency. Going ahead, the project will focus on improving the process efficiency, automating plant operations and reducing capital costs.

How Will the Project Benefit Sempra Energy?

The newly-formed partnership will enable SoCalGas in storing excess renewable energy for long periods with its existing natural gas pipeline infrastructure. As SoCalGas and NREL focus on the scalability of this new bioreactor system, the former remains confident of realizing safe and reliable storage of renewable energy well beyond the capacity of batteries.

It is true that bio methanation is a nascent technology in the renewable space when compared to the more developed solar and wind energy. However, biomethane is gaining ground lately when it comes to long-term storage of energy and production efficiency.

Per Transparency Market Research, the global biomethane market is projected to increase from $1.49 billion in 2017 to $2.62 billion by 2025, at a CAGR of 6.7%. Such massive growth projections, thereby, offer Sempra Energy ample opportunities to enhance its share in the booming biomethane market.

A Growing Renewable Energy Market to Boost Prospects

Per an NREL study, the United States is expected to generate approximately 80% of its electricity from renewable energy sources by 2050. This certainly will boost prospects for gas utilities like Southwest Gas Corporation (SWX - Free Report) , Atmos Energy Corporation (ATO - Free Report) and Chesapeake Utilities Corporation (CPK - Free Report) , which are focusing on clean energy.

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