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For about 10 years, the conventional wisdom in the energy industry has been that natural gas is on the rise. Coal is dirty, and it’s expensive, but it’s too soon to go all the way to renewable energy. We need a bridge from the current fossil fuel to a renewable future.
“natural Gas Vs. Renewables: Striking The Right Balance For A Sustainable Future”

Natural gas will be that bridge, a way to reduce our emissions compared to coal, and we’re working on scaling renewables. (The switch from coal to gas is a big part of why U.S. emissions have fallen over the past few years.)
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In its role as a bridge, natural gas has a comfortable future. First, it will replace coal and nuclear “baseload” plants, and then, as renewables proliferate, it will provide flexibility and fill gaps where variable renewables (wind and solar) are declining. By playing these multiple roles, natural gas will outlast coal for a long time and will continue to be useful in the late 21st century. It’s a long, slow exit.
In 2015, five years after Vayu came to power, problems with this narrative began to emerge. First, wind and solar costs have fallen so far that they are now undercutting the cost of new gas in growing regions. And then batteries — which can “fix” variable renewables, reducing the need for the flexibility of natural gas — started getting cheaper faster than anyone expected. This has happened so fast that, in certain circumstances, solar+storage or wind+storage are already cheaper than new natural gas plants and can play the same roles (and more).
The price of natural gas power is tied to the commodity price of natural gas, which is inherently volatile. The cost of controllable, storable renewable energy is tied only to technology costs, which will go down, down, down. Recent projections suggest that building new renewables+storage could be cheaper than keeping existing natural gas plants running by 2035.
That means natural gas plants built today will be uncompetitive before their estimated lifetimes. They could become “deteriorating assets,” which would cost utility rate payers and investors early layoffs.
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Meanwhile, gas’s environmental reputation has been battered by a series of reports, most recently a study in Science, showing that gas’s life-cycle methane emissions are higher than previously estimated and could seriously undermine gas’s climate advantage over coal. (See author and activist Bill McKibben for a detailed analysis of this point.)
Even if methane emissions are reduced, they cannot simply be reduced. and the US to fully decarbonise – to achieve net-zero carbon emissions – by mid-century. Natural gas is incompatible with a net-zero-carbon future unless a large infrastructure is built to capture and bury its carbon emissions. Until that happens, natural gas must eventually be phased out.
Fortunately, there is good news. While it’s too early to say we’ve reached the end of the natural gas bridge, the end is in sight—somewhat dim, but you can see it if you look hard enough.
Here’s how this post goes. Let’s look at the latest prices for renewable energy and storage relative to natural gas. We’ll see many recent examples of regulators or utilities turning against natural gas or enduring political backlash to support it. Let’s look at two recent reports that try to quantify the threat of natural gas. And then we’ll finish with some great examples.
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By way of background: New natural gas power plants come in one of two flavors. Combined-cycle gas turbines (CCGT) operate two continuous cycles—first burning natural gas in a jet engine, then capturing the waste heat to drive a secondary steam generator—and are highly efficient, generally inexpensive, and run frequently. Open cycle gas turbines (OCGT) are less efficient and produce more expensive power, but they are faster. They spike during peak power demand – thus, “peaks.”
Winning the CCGT is mainly about costs; Wind or solar can do it themselves, once they get cheap enough. Hitting beakers need not only be cheap, but also fast, flexible and dispatchable. For that, you need savings.
As Lazard suggests, the “levelized cost of energy” (LCOE) from some renewables is already in many cases lower than the LCOE of many fossil fuels, even without subsidies and without factoring in the environmental benefits. Wind is the cheapest energy of all, and utility-scale solar competes with cheap natural gas.
In the Midwest, air is cheap. In the Southwest, sunlight is cheap. As costs continue to fall, the areas where renewables win the new CCGT will grow and spread.
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Peak costs range from about $8.18/kW-month (according to the consulting group Prattle) to $15/kW-month (for a recently proposed Entergy plant). Compare that to NVEnergy’s recent request for a 50 MW, four-hour storage plan as low as $6.11/kW-month. (That’s with the 30 percent federal tax credit, so the “real” price is $8.72/kW-month, still against the cheapest peak.)
It is worth noting that batteries have advantages over beakers apart from cost. They are created quickly. A natural gas plant takes three to five years, while Elon Musk promised South Australia to build the world’s largest battery bank in 100 days or it would be free — and he delivered.
Batteries can also provide a range of other services, such as voltage support and frequency regulation, faster and more accurately than natural gas plants. They can reduce grid congestion and help avoid new infrastructure investments.
“Current battery storage chemistries may not be able to do all the work like gas,” Kelly Speaks-Backman, CEO of the Energy Storage Association (ESA), told me, “and a portfolio of storage technologies can address that. Much of the same functionality, especially long-term chemistry exposure.”
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Utilities often default to natural gas plants when looking for resources to meet expected peak demand, but that is changing as storage becomes cheaper; Many utilities are growing suspicious of natural gas and leaning toward technology-neutral demands. (ESA has a guide for utilities on how to integrate storage into their planning.)
Several states (including California, Massachusetts, New Jersey, and New York) have passed storage mandates, forcing utilities to purchase storage. The Federal Energy Regulatory Commission recently issued Order 841, which requires all major U.S. energy markets to participate in savings on an equal footing.
Times are changing. Let’s look at how some controllers and applications respond to these changing dynamics.
Across the country, examples are emerging of regulations and utilities rejecting new gas plants or fighting through a hailstorm to build them. Gas may still be the default choice for many utilities, but environmentalists don’t let it go unnoticed — building a gas plant almost anywhere in the U.S. is a struggle.
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Then there’s California, where a catastrophic natural gas leak in Aliso Canyon exposed the fragility of the natural gas distribution system and prompted a state of emergency. Within six months, 70 MW worth of battery systems were installed in the valley, helping to avert the dreaded blackouts.
When Southern California’s Natural Resources Commission proposed a giant new natural gas plant, advocates pushed back hard, marshaling evidence that renewables and storage would be faster and cleaner; The Natural Resources Board later shelved the plan. (Although it’s not completely dead yet.)
California regulators forced Pacific Gas & Electric to solicit bids for energy savings instead of continuing to pay for three natural gas plants (one CCGT, two beakers). Pacific Gas & Electric has chosen to replace them with the world’s largest storage purchase to date: four projects totaling 2,270 MW.
They also rejected Southern California Edison’s plan to renovate its Ellwood Beaker plant, instead pushing the utility to bring more storage and solar power online. “At this time, in the absence of more compelling circumstances, we must direct all of our investments in infrastructure and energy to clean energy sources,” said Commissioner Clifford Rechtschaffen.
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In April, the Glendale City Council voted to advance a proposal for a natural gas plant in their city to explore cleaner options. And so on.
This (very partial) list shows that the value proposition of natural gas is no longer taken for granted. Gas’ dominance is based on demand – it’s cheaper and cleaner than coal, but can do things renewables can’t. That sense of necessity is being eroded. Currently emerging alternatives are clean energy resource packages that can perform similar functions at competitive costs without greenhouse gas emissions.
When will natural gas begin to seriously feel the pressure? Some are recent
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