Natural gas is still king when it comes to new, large scale utility scale power plants in the US — at least, for the next couple of years. However, there are some indications that wind and solar power are cutting into that turf. When you throw smaller utility scale power plants and distributed energy generation into the mix, the picture looks even better for renewables.
Natural Gas Not Winning Hearts And Minds So Much Any More
At the beginning of the Obama Administration, natural gas was widely touted as a cleaner “bridge” fuel that could accelerate the retirement of highly polluting coal power plants.
The retirement part certainly has happened, but not necessarily the cleaner part.
Researchers are beginning to take a closer look at the estimates of methane escaping from wellheads, pipelines and storage facilities.
Meanwhile, concern over the local impacts of natural gas fracking (short for hydrofracturing, a formerly “unconventional” method of oil and gas recovery) has already prompted several states to ban the practice outright.
Even Pennsylvania, which has been a fracking hotspot, has recently moved to tighten up its regulations.
In addition, the disposal of vast quantities of wastewater from fracking and conventional oil and gas drilling has sparked another set of pollution concerns involving storage, treatment and transportation. Evidence is also piling up that the practice of disposing wastewater in wells has touched off swarms of earthquakes in Oklahoma and other states.
For the next couple of years, it looks like the US will continue to lean on massive new natural gas power plants for its electricity supply…
…However, to the extent that the low cost of natural gas is partly due to lax regulations all along the supply and disposal chain, cleaning all that up is going to cost money, and that could exert upward pressure on domestic natural gas prices.
Wind, Solar Nudging Into First Place, Temporarily
At the same time that new anti-pollution policies could exert upward pressure on natural gas prices, the cost of wind and solar power has been plummeting.
With that dynamic in mind, let’s take a look at some new developments in the power generating field over the summer.
The chart at the top of this article was published by the US Energy Information Agency back in March. According to EIA, for two months this year — July and August — solar energy was scheduled to be the source for practically all of the new power generating capacity scheduled to be added in the US.
EIA notes that December is also a huge month for renewables, because energy companies are rushing to take advantage of tax breaks for the year.
The agency also predicted that if all of the new capacity is added as scheduled, then utility scale solar will exceed any other single source for the first time ever, on a yearly basis.
Last week, the Institute for Energy Economics and Financial Analysis issued a report that details the actual additions for the month of August. As it turned out, the US added more wind capacity along with solar. The score was zero for natural gas:
A total 20 projects with a combined capacity of 463 MW were added in August, with 55% of the capacity coming from solar projects and 45% coming from wind-powered generators.
A good chunk of that new capacity is attributed to one 200-megawatt wind project brought online by the Texas Reliability Entity (TRE is the successor to the gigantic regional grid operator ERCOT).
Other major projects were located in Georgia and California.
Not A Good Sign For Natural Gas
In what may be a harbinger of things to come, last week the St. Louis Star-Tribune reported that Minnesota officials have approved the shutdown of units at the massive Becker coal power plant. The facility is the largest single source of greenhouse gas emissions in Minnesota.
Normally one could assume that natural gas units will replace the coal units, but apparently that is not a done deal.
The plant owner, Xcel, has requested approval for new gas units at the site, but the state Public Utilities Commission has turned down the request:
Essentially, the PUC asked Xcel to look more closely at renewable energy alternatives — along with the gas plant — to help compensate for the loss of the Sherco coal plants. Plus, the commission told Xcel to consider more “demand side” management — for example, measures to reduce customer energy use.
Another wrinkle cutting into natural gas turf is the emergence of hybrid gas-solar power plants, a trend that has been bubbling up for the past several years.
Yet more bad news emerged in the summer of 2015, when President Obama introduced the Clean Power Plan. If the emissions-reducing plan adhered to past policy it would have favored the acceleration of natural gas. Earlier versions of the plan were designed to do just that.
Instead, the final version of the Clean Power Plan has the long view in mind. It provides incentives for favoring renewable energy sources over fossil fuels, including natural gas.
Images: via US EIA.
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