It’s the roaring 20s for renewables — will natural gas join the party?

The following is a ( contributed article by Brent Alderfer, Founder & CEO of Community Energy.

It’s 2020 and the talk is decarbonization. Many recognize that by 2050 we need to see net-zero carbon emissions across all sectors. In the meantime, climate change won’t wait — the power sector will need to eliminate 70-80% of its carbon emissions by 2030. 

With the stunning advances in renewables, that target is within reach, but we will need a good dance partner. It’s time for renewables and gas to tango.

The past 20 years for renewables

To see what’s possible in decarbonization in the next decade, we can look at the path charted over the last two.

In the early 2000s, the renewables industry cut through entrenched markets and hostile policies to get the first utility-scale wind projects permitted, financed and on-line, demonstrating that renewable energy could meet load alongside the big-boys of the grid — coal, gas and nuclear. Those early advances in wind generation delivered larger generators, longer blades and taller towers making windfarms feasible in moderate wind regimes east of California, then east of the Rockies, and now offshore on the east coast. 

Initially the levelized cost of wind energy was well above conventional generation. Luckily, early adopters, leading university, corporate and residential electric customers shouldered higher priced green power in a successful example of deployment-led innovation that successfully commercialized wind generation in states where there was none before. 

With reliability established, many states adopted renewable portfolio standards requiring minimum percentages of renewable energy in their electric generation mix. By the end of the first decade, new wind energy capacity provided about 2% of national load.

Following the path blazed by wind technology, utility-scale solar entered the field in the 2010s.

Better modules, new trackers and standardized assembly and construction steered solar down the technology learning curve, reducing costs by 70 to 80%. States added solar carveouts to their renewable portfolio standards assuring a slow ramp up of grid-connected solar and attracting some of the established financing and investors from the wind industry. 

Just as early green-power customers built the first wind projects, private power purchase agreements from internet giants, industrials, universities and cities provided the demand (13 gigawatts last year) and credit to build larger solar farms with lower-cost capital, further lowering the cost and driving solar deployment at scale. 

Now, at the end of the second decade, solar has proved more cost effective than coal and we’ve built enough capacity to supply about 2% of total electric load, with wind energy now at about 9%.

The next 20 years of energy

Now, as we enter the third decade, we’ve come to a fork in the road. 

Climate change requires a 45% reduction of carbon emissions across all sectors by 2030, which means 70 to 80% reduction from the power sector as transportation, building and industrial sectors catch up. Keeping nuclear and hydro in place, solar needs to grow from 2% to 25% quickly and wind from 9% to about the same share. 

That means both industries will need to deploy technology at 10 to 15 times their current rates.

The good news is, that’s possible! Preliminary siting is already mapped out in interconnect queues across the country and we have the knowhow and the capital for renewables to scale quickly. And it is now well recognized that renewables at scale will reduce the cost of electricity. Clearly a win-win-win. 

The challenge for this decade is how to partner up renewables with other economic generation resources to supply 24-hour, 365-day decarbonized power. Batteries as back-up will be increasingly deployed but are too expensive and limited in duration to fully back-up large amounts of renewables at the level necessary to hit the 2030 climate change goal.

The best dance partner for renewables this decade is natural gas.

Why? Because natural gas can economically back large amounts of new renewables across all seasons. 

Natural gas can deliver reliability and renewables can deliver deep decarbonization, together saving billions of dollars for electric customers, attracting billions of dollars of new investment and creating jobs in every city and county across the country, not to mention the globe. The catch is it requires a fundamental shift by the gas industry away from its jealously guarded environmental bad-guy role to a full-on commitment to join the climate change team.

As several majors (Shell and BP to name a few) have publicly acknowledged, gas cannot take its desired leading place in the energy transition unless it can clean up its environmental act — not just a few leading companies, but the whole sector. 

Eliminating methane leaks from well to customer is the first ticket to entry. The Methane Guiding Principles initiative suggests the industry is moving in the right direction, but the percentage of methane leaked to the atmosphere worldwide must come down quickly to make that real.

In addition to standards, innovation to decarbonize will be the real sign of engagement. For instance, LNG ports and transport can be key players in replacing coal generation globally, but not if 10% of the gas is lost to the atmosphere. 

Fugitive emissions combined with high energy use in refrigeration and processing for liquefaction pushes the carbon footprint of LNG-fueled electric generation up in the range of coal plants. We would be running in place to expand LNG with that math. 

As an example of innovation and partnership, some LNG facilities are turning to renewable energy to power liquefication, bringing LNG-fueled electricity back into positive climate territory. Sound practices for hydro-fracturing chemicals, geologic and well-water impacts and waste-water disposal all follow from a commitment to long-term sustainability.

So far, the gas industry seems to want it both ways, with reputational advertising as a clean energy fuel, while its trade organizations aggressively wage climate change denial and war on zero carbon nuclear, renewables, carbon pricing and electrification. 

While that approach might seem like a smart hedge, the longer result is that it takes the industry out of the infrastructure plans of the future. It becomes another carbon source to be curtailed, banned and replaced. 

Again, kudos to several industry majors who have recently pledged to withdraw from trade association lobbying that fights climate change progress, but let’s see what happens on the ground. The world would welcome the tremendous capital, influence and expertise of the natural gas industry to innovate and deploy a global decarbonization plan. 

That shift from leading the opposition to leading the charge may seem unlikely, but it is timely. 

So, what might convince the gas industry to lay down its past and join renewables, nuclear and others in pursuit of 80% electric decarbonization this decade? 

Apart from the fact that decarbonization handwriting is on the wall, the size of the global market for decarbonized electric generation might do it. Bloomberg recently reported that we are awash in natural gas. LNG ports are opening access to global markets, but without significant expansion, even global markets cannot absorb supply. 

The only market large enough to put the natural gas industry to work is decarbonized electricity globally. Coal generation still supplies 38% of world power — 60% in China — and needs to be replaced in the coming decade to hit the goal. 

Why does gas need renewables to serve this market? Natural gas alone can’t hit the climate-change target and renewables alone can’t meet 24-hour demand. Just as important, adding large amounts of renewables lowers electricity prices. That two-part formula — lower carbon and lower prices — works around the world.

At the end of this decade, we’ll write the story about how we’ve done. It might say that each industry continued combative fights for conventional versus decarbonized energy. At a minimum, there will be ongoing competition for the future, as the gas industry works on carbon-capture-and-sequestration and renewables works on declining-cost, overnight and seasonal storage in the race for net-zero energy by 2050. 

That competitive race for the long-term future is on. But there are two reasons why it should not prevent gas and renewables from working together this decade. 

First, speed counts and failure to deploy the power sector solutions in front of us dangerously delays critical near-term decarbonization. Second, under increased climate pressure, renewables plus storage can win the long-term competition. 

Joining the climate change team this decade greatly expands the window for natural gas to be part of the ultimate net-zero solution in the decades that follow. Even if we don’t agree on the long-term winner, there is a decade of expanding global markets demanding decarbonized electricity that we can cover effortlessly and faster together than any other team ready for prime time. 

So let’s dance!

By Brent Alderfer
Published Feb. 26, 2020