Or so the story goes.
Around 2015, though, just five years into gas’s rise to power, complications for this narrative began to appear. First, wind and solar costs fell so far, so fast that they are now undercutting the cost of new gas in a growing number of regions. And then batteries — which can “firm up” variable renewables, diminishing the need for natural gas’s flexibility — also started getting cheap faster than anyone expected. It happened so fast that, in certain limited circumstances, solar+storage or wind+storage is already cheaper than new natural gas plants and able to play all the same roles (and more).
The cost of natural gas power is tethered to the commodity price of natural gas, which is inherently volatile. The price of controllable, storable renewable energy is tethered only to technology costs, which are going down, down, down. Recent forecasts suggest that it may be cheaper to build new renewables+storage than to continue operating existing natural gas plants by 2035.
That means natural gas plants built today could be rendered uncompetitive well before their rated lifespan. They could become “stranded assets,” saddling utility ratepayers and investors with the costs of premature decommissioning.
Meanwhile, gas’s environmental reputation has suffered from a series of reports, most recently a study in Science, showing that gas’s lifecycle methane emissions are much higher than previously estimated and could virtually erase any climate advantage gas has over coal, rendering it a bridge to nowhere. (See author and activist Bill McKibben for an extensive exploration of this point.)
Even if methane emissions are reduced, they can’t be reduced to nothing. And the US needs to completely decarbonize — get to net-zero carbon emissions — by mid-century. Natural gas simply isn’t compatible with a net-zero-carbon future unless a massive infrastructure is built to capture and bury its carbon emissions. Until and unless that happens, natural gas must eventually be eliminated.
Luckily, there is good news. While it is far too early to say that we’ve reached the end of the natural gas bridge, we can perhaps say that the end has come into sight — somewhat hazy, but you can see it if you squint just right.
Here’s how this post is going to go. We’ll take a look at recent prices of renewable energy and storage relative to natural gas. We’ll run through several recent examples of regulators or utilities either turning against natural gas or enduring political blowback for supporting it. Then we’ll check out a couple of recent reports that try to quantify the threat to natural gas. And then we will conclude with some big takeaways.
...
One thing we know: energy changes faster than we think it will
Of course, we shouldn’t forget that forecasts out to 2050, like BNEF’s, are best seen as a genre of science fiction. Nobody knows what the world is going to look like in 2050. The energy sector is already changing with vertiginous speed. In the past 10 years, developments in clean energy have come so fast and furious that forecasts have been revised again and again. Even 10-year forecasts have been rendered goofy.
There’s no reason to think the pace of change will slow any time soon. Quite the opposite.
So there’s a great deal we do not, and cannot, know.
We don’t know where the price of natural gas will go, what policymakers will do, or what kinds of economic or other disruptions might be in store. More to the point, though, we scarcely have any idea what clean energy is capable of.
We don’t know what’s possible once gigawatts worth of electric vehicles are connected to the grid and charged or discharged depending on needs. We’ve barely scratched the surface on demand response and have only the faintest glimmer of what we can do with millions of appliances hooked up to the grid for use as thermal storage or flexible demand.
We cannot predict what new industries or uses might arise around dirt-cheap renewable energy, or what kind of demand might swarm in to absorb the abundant energy underneath the duck curve, once markets are properly aligned. We talk a lot about smart grids that can support transactive power systems, but have barely begun to build and connect them.
We have no idea what’s going to happen.
But we do know a few things. We know the US needs to decarbonize as fast as possible (as all developed nations do), and that eventually the federal government will get its act together. We know that natural gas, at least without carbon capture and sequestration, is not compatible with a zero-carbon future and must eventually be eliminated.
We know that clean energy resources, in all their varied glory, can do all the things natural gas power plants can do. We know that the cost of natural gas power is tethered to the price of natural gas and has little room to fall, while the cost of clean energy is tethered only to technology, which has gotten and is continuing to get cheaper and cheaper.
And we know that clean energy has defied all our forecasts, maturing and falling in cost faster than even the most optimistic advocates predicted. We should have some confidence that will continue.
Natural gas still has enormous global momentum. But it has already gotten risky to build a new gas plant in the US. The UK is turning away from gas. So is South Australia. It will happen first in developed markets that already have adequate capacity and then, depending on how cheap clean alternatives get, growing markets next.
Clean energy is approaching in natural gas’s rearview mirror, fast, always faster than anticipated. Think about what today’s forecasts will look like in 10 years. Which side would you bet they err on?
Read more at Clean Energy Is Catching Up to Natural Gas
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