Natural gas will play a major role in the power market of the United States and the wider economy through to 2040, according to a new report from the Interstate Natural Gas Association of America (INGAA) Foundation…
The Role of Natural Gas
The Role of Natural Gas in the Transition to a Lower-Carbon Economy, published in May 2019 by a lobby group representing pipeline owners and operators., envisages two scenarios for the U.S. energy evolution. In both the “Balanced Future” and the “Rapid Renewables Transition” scenarios, natural gas remains an important part of the U.S. energy mix through 2040.
The “Balanced Future” scenario presents a sustained transition to a low carbon economy, driven by policy and market economics, in which renewable portfolio standards (RPS) goals are met on schedule and facilitated by adoption of energy storage. In addition, it foresees a strong second wave of LNG exports as well as pipeline exports to Mexico based on sustainable economic investment decisions.
In contrast, the “Rapid Renewables Transition” scenario foretells of a global acceleration in carbon reduction goals in combination with an increase in operational and under-construction LNG terminals encouraged by policy or technology-driven investment decisions.
Natural gas and renewables are highly complementary energy sources
Gas-fired and renewable power plants are reliable sources of base load power, which— for peak times of electricity demand, gas peaking plants and pumped stored hydro—are highly competitive. However, the INGAA report maintains that natural gas and renewables working together is the best way to reduce greenhouse gas emissions.
Because of the intermittency of wind and solar energy, the power grid still needs to have natural gas to provide fast and flexible back-up power, to allow the grid to quickly respond to fluctuations in supply and demand. The report notes that energy storage technology is not yet viable or competitive with flexible, fast-ramping natural gas generation.
Demand for gas will grow until viable grid-scale battery technologies become available, perhaps not until 2040 at the earliest. Therefore, gas-peaking plants will remain a significant complementary energy source alongside renewables.