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:
– 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