Everyone is predicting the continued expansion of gas through to 2050. Jim Conca reviews the state of play in the U.S. to explain why that projection makes sense. The welcome and rapid growth of renewables still needs something to provide backup load-following to a growing and increasingly intermittent electric grid. Gas is the cheapest to roll out and can keep prices low for decades. The other two contenders, hydro and nuclear, just can’t match it. There are limits to where dams can be built, and the new Small Nuclear Reactors will take decades to deploy at scale. The other benefits are that gas is displacing the far dirtier coal, serves existing hard-to-abate gas appliances, and the U.S. has its own bountiful supply. The negatives are that it’s still a fossil fuel (10 times the emissions of solar, 30 times those of wind or nuclear), it needs expensive pipelines, and it can have catastrophic leaks. All told, the article shows why a long list of big utilities – Dominion, Duke, NextEra, Southern and Xcel Energy – are already investing billions down the path of renewables plus gas.
As much as wind and solar are increasing, natural gas is increasing more. And gas will continue to grow faster than all other energy sources in the United States for some time.
Over the past fifteen years, coal has decreased from over 40% to 27% of our electricity generation and gas has increased from 17% to about 35%. As a result, greenhouse gas emissions in America dropped to a 25-year low two years ago, although they are now rising again with increased economic activity and an ever-increasing number of gas-guzzling SUVs.
Natural gas is cheaper
Natural gas is cheaper to build than any other generation source, and natural gas itself will be cheap for decades, so it is likely that gas will continue to be America’s top electricity producer and should exceed 50% of our generation by mid-century.
Given our supposed desire to reign in our emissions and cut our fossil fuel use, this is definitely going in the wrong direction to any green energy future, even if renewables expand significantly.
Renewables have yet to break the 10% mark, but a new report from Morningstar suggests that renewables have the policy momentum to expand to well over 20% by 2030 to become the nation’s second most abundant source of electricity (see figure below).
Solar/wind subsidies are down, but policy-driven targets are up
According to Morningstar, the ramp down in solar and wind tax credits during the next few years won’t slow growth as much as other forecasts predict. Utilities that meet state renewable energy portfolio standards (RPS) will fill most of the growth gap from the elimination of, or reduction, in tax credits. But there has been growth in states that have already surpassed their RPS such as Texas and Iowa, and growth in states that don’t have an RPS, like Florida.
Coal will continue to decline as gas takes over its market share and environmental concerns prevent any new builds. Nuclear will decline slightly based on planned plant retirements partially offset by two new reactors coming online in the next two years, and particularly by small modular reactors, which should take off after 2025.
We have a plan to double hydro in America without building a single new dam. But will we?
Renewables need gas for backup
The key thing about renewables and gas amounting to over 60% of the mix in only 10 years is that renewables need natural gas for backup, or load-following, or we start having rolling blackouts when the wind stops blowing. It’s why the gas industry has been the major supporter of wind energy.
Hydro and small modular nuclear reactors are also excellent for load-following renewables, but only the Pacific Northwest has sufficient hydro for that on a large-scale, and SMRs will take decades to deploy in sufficient numbers to take over from natural gas.
Gas, renewables, transmission: utilities are investing billions
According to the Morningstar report, integrated utilities with supportive regulatory frameworks should benefit as they retire coal plants and replace them with natural gas, renewables and transmission infrastructure. This can be seen in the largest U.S. utilities. Dominion Energy, Duke, NextEra Energy, Southern Company and Xcel Energy are investing billions of dollars along these lines.
Just look at how Xcel Energy’s generation mix has changed since 2005 and is projected to change by 2030: wind is going from 9% to 60% of its mix (see figure below). The other utilities are changing in some form along these lines as well, depending on their specific mixes, but renewables and gas are the only two sources expected to increase significantly.
Whether it’s an aircraft carrier, a utility company or the United States, these are big ships to turn. While you can make big changes, they entail lots of effort, money and potential trouble, and you can’t make them often. Choosing the course of renewables and gas locks us into gas in a big way for decades, twice as long as it locks renewables because of the difference in unit lifespans.
The gas “lock-in” has positives…
At this rate, gas will exceed 50% of the power mix by 2050, which may be a double-edged sword. On the plus side:
– natural gas is cheap, and has been getting even cheaper
– the carbon emissions are about half that of coal (fugitive emissions notwithstanding)
– it is a lot cleaner than coal in those nasty metal, particulate, sulfur, toxic waste, non-CO2 ways
– outages are rare and most gas systems work when the electricity is out, although polar vortices give gas a headache
– gas appliances, like dryers and furnaces, generally use less total energy than electric ones
– gas is necessary to back-up most utility-scale renewable sources like wind farms and solar arrays
– the gas industry supports almost 3 million jobs in the U.S.
– we have lots and lots of domestic natural gas, more than anyone in the world, and enough for several hundred years.
On the minus side:
– gas is still a fossil fuel with ten times the carbon emissions of solar and 30 times those of wind or nuclear
– gas can explode, and often does
– it requires an extensive network of pipelines, which no one wants in their backyard
– Porter Ranch (a massive gas leak in 2015 that released more than 100,000 metric tons of methane into the atmosphere)
Overall, the pluses outweigh the minuses for most of society, which is why gas is growing so rapidly and is now America’s power of choice. Wind will come along for a symbiotic ride, and together will rule America’s generation sector.
Dr. James Conca is an earth and environmental scientist and a regular contributor to Forbes magazine
Natural Gas does not make any economical sense. Turning wind or solar electricity into heat is now cheaper than natural gas so a thermal powerplant run with a heat storage instead of a gas burner will produce cheaper electricity.
Jim Conca says
But those low costs for renewables don’t include load-following or HV power lines, so still not cheaper. Also, gas takes 3 tons of steel per MW installed and wind takes 450 tons/MW, solar 300 tons/MW, so to reach 50% or more would take an awful lot of steel that we are not planning for.
The scientific community has shown that there are no shortage of material to power the world with renewbles while fossil fuels can’t be recycled back when they are being converted into CO2. It’s common to use thermal storage in the renewable industry for concentrated solar (see Ivanpah), using that for wind just requires a cheap electric boiler and can be sited wherever there is spare capacity on the power lines whereas gas powerplant needs to be connected to the gas infrastructure. We don’t see that very often because expanding the grid or using hydro is cheaper but since everything natural gas do, storage can do it better and cheaper we can’t expect natural gas to be viable in the future. For example natural gas can’t use excess electricity, it can only produce energy which is hugely detrimental in a renewable world. It has been several years since the market for gas turbines have been plunging and factories are getting shut down by Siemens or GE…
S. Herb says
‘Fugitive Emissions’ come far too short here. My limited understanding is that with careless extraction and distribution of methane the short term effects may be comparable to those of coal. Here is a quote from the MethaneSat website: “Cutting methane emissions 45% by the year 2025 from the oil and gas industry alone will have the same 20-year climate benefit as shutting down one-third of the world’s coal-fired power plants. ” The MethaneSat will have high sensitivity and spatial resolution for methane and is being commissioned by a special subsidiary of the Environmental Defense Fund (EDF). Extensive measurements and understanding of our ability (and will) to suppress the fugitive emissions are absolutely necessary if we are to consider continuing or expanding our use of natural gas.
Daniel Williams says
A recent Wood MacKenzie report shows that green hydrogen is likely to be less expensive than SMR hydrogen within 10 years, and this reiterates the same findings cited by BNEF.
Focusing more on this and associated technologies should I think receive more focus. Hydrogen is more useful than electricity because it can be transported at much lower cost and it can be stored; as well as having a very wide range of applications.
Roger Arnold says
I don’t have high confidence in that Wood MacKenzie prediction. Not saying it couldn’t work out; 10 years is a long time these days, and a lot could happen. But methane would have to become much more expensive, or renewable energy would need to become much cheaper even than it is now, or electrolysis would need to see higher efficiencies and lower capital costs. Or some combination. But unless methane becomes much more expensive, the efficiency and cost of SMR are also likely to improve.
I see a sharp increase in the cost of natural gas as a distinct possibility. IMO, it’s a major risk factor for all the plans that rely on cheap natural gas for backing renewables. The problem is that all those forecasts for cheap natural gas far into the future are based on booming production from tight shale formations in the US, courtesy of fracking. But the fracking industry has been losing money ever since it started. Investors are fed up, and there are alarming signs that the sweet spots in the big plays are tapping out.
What we could see is growth in biogenic methane from algae or other biomass. Maybe someone will even work out a feasible way to tap the methane that’s starting to boil up from the melting arctic seabed. That would certainly be nice. It would raise the odds that our great grandchildren will inherit a still habitable planet.
Daniel Williams says
Roger; what are you trying to say? That Wood MacKenzie is betting on cheap methane or not? That we are switching to hydrogen or not? Which one is it? You are contradicting yourself. Its a clever game you are playing and I can see you, Roger.
Fracking in the US has not covered the cost of production in 10 years. It is heavily subsidised and we can confidently say that due to the massive amount of insolvencies and the lack of public data that its not working out, and its never going to work out. Its a Ponzi scheme.
Here is some very ‘light’ data covering a cross-section of companies, and again (for over 10 years now) not one of them have made a profit:
Then there are the climate costs of fracking. Hurricanes Harvey, Irma and Maria cost $306 billion in 2017, and this is just the insurable cost – not the value of lost productivity. The US discretionary budget is about $1000 billion with $600 of that going to the military (yup – paranoid) and so doing some quick, back-of-the-envelope-style maths we can see that 2017 wasn’t a good fiscal year for the US.
The sharp uptick in temperature that we’ve all experienced following the inception of fracking in 2007 follows almost the exact same uptick in methane in the atmosphere.
So yeah, the O&G companies release a load of reports saying that its not the same carbon isotope.
However, this isotope is not the same as normal carbon-13 from conventional fossil gas – it has recently been discovered that this isotope is only found in shale deposits.
So we now know what the cause of 9 of the 10 hottest years in recorded history is. It is unequivocally hydrofracturing.
[news .cornell .edu/stories/2019/08/study-fracking-prompts-global-spike-atmospheric-methane]
Stop messing around, Roger.
Roger Arnold says
I’m not contradicting myself; I’m saying that there’s a lot of uncertainty about how things will go over the next 10 years. There are plausible reasons to bet either way. Or to refrain from betting.
I’ve been expecting the fracking boom to collapse for years now, but it hasn’t. At least not yet. I was NOT expecting PV prices to drop much over what they were five years ago, but they have. Maybe expressions of uncertainty are not what you’re interested in hearing. But I don’t regard telling things as I see them to be “messing around”.
If you want a more definite statement that you can take issue with, I can put it this way: IMO, anyone who claims to actually know how this will go is almost certainly delusional.