Peak Gas Coming Sooner than you Thought
March 23, 2021
I heard from some folks that the Texas Blackout was some kind of setback to decarbonization. That’s anything but the truth.
If anything, we’ll see an acceleration in big battery deployment, which is already happening. Within 10 days of the Blackout, an announcement came about a new 100 MWH Tesla battery 40 miles from Houston. Batteries, both behind and in front of the meter, will be big winners here, and the buildout in Texas will be so massive, that it will accelerate the battery cost and deployment curves the way Germany accelerated global solar 10-15 years ago.
Above, you see the ERCOT queue from August of 2020. If there’s any change post blackout, it will be that the battery bar gets a lot longer.
2 links below to articles written pre-blackout that I believe will still hold up.
Texas has long been a leader in wind power, but is quickly catching up on solar. The ERCOT Interconnection Queue, which shows the latest list of projects that are trying to connect to the system is, in fact, dominated by solar projects. Almost 77,000 MW of solar projects are in some stage of connecting to the grid. For reference, the all-time high peak power demand in ERCOT is just shy of 75,000 MW. Not all projects in the interconnection queue will get built, but the amount of solar (76,961 MW), wind (25,886 MW), and energy storage (17,436 MW) vs. natural gas (7,042 MW) in the queue does give a snapshot of what types of projects that investors see as most worth looking at. A preliminary analysis of historical projects in the ERCOT queue indicated that roughly 70% of projects that made it to the latter stage of the queue ended up being completed – solar and wind each have roughly 13,500 MW worth of projects in that latter stage.
One of the largest utilities in the U.S. put $8 billion into a bet that natural gas would dominate American electricity much like coal had before. “We really consider this to be a growth play,” Tom Fanning, chief executive officer of Southern Co., said in an interview just five years ago, as his company set on its landmark acquisition: natural-gas distributor AGL Resources Inc.
Gas looked to be on the verge of generational dominance at the time. The American fracking boom had made the fuel superabundant and cheap, hastening coal’s rapid decline, while energy from wind and solar had higher costs and lower reliability. A giant utility like Southern would naturally see gas pipelines and storage as the key to a durable and lucrative future, meeting demand that would continue to grow.
Now those expansive time horizons are in deep doubt. In fact, there are flashing signs that the U.S. power sector is approaching peak gas, with demand topping out decades ahead of schedule. “The era of robust growth in the U.S. natural gas market is likely coming to a close,” says Devin McDermott, an analyst at Morgan Stanley. “It doesn’t mean the market falls apart. It doesn’t mean gas demand falls off of a cliff. It means that we need less new supply going forward.”
By the end of the decade, McDermott forecasts that gas will no longer be the largest producer of electricity in the U.S. And the pace of the gas decline could be accelerated if the presidential election goes to Joe Biden, who has campaigned on the goal to eliminate carbon emissions from America’s power grids by 2035.
Some in the industry are making moves that indicate the writing is on the wall. Dominion Energy Inc., one of America’s biggest power companies, this summer agreed to sell substantially all of its gas pipeline assets. “To state the obvious, permitting for investment in gas transmission and storage has become increasingly litigious, uncertain and costly,” said Tom Farrell, Dominion’s executive chairman, in July. “This trend, though deeply concerning for our country’s economic growth and energy security, is a new reality, which threatens the pace at which we intended to grow these assets.”
Natural gas emerged out of the 2008-2009 recession as the fuel best suited to reduce U.S. emissions from electricity. It’s cleaner and more efficient than coal, and fracking’s success ensured it would be cheap and plentiful. That helped unlock coal’s grip on electric grids and supercharged gas economies in Pennsylvania and on the Gulf Coast. The U.S. soon switched from being a gas importer to one of the world’s leading exporters.
Renewables, meanwhile, still carried the stigma of hippie-ish science experiments that depended on government support and couldn’t provide around-the-clock electricity as long as the sun set and the wind ebbed. But the arrival of big-storage batteries has meant that wind and solar power will slowly be less dependent on the whims of weather, calling into question assumptions that there would be plenty of need for new gas alongside renewables. Solar farms backed up by batteries are already beating out gas on costs in parts of the U.S. Southwest , thanks in part to sharply falling prices of lithium-ion systems.
Climate Denial Crock of the Week 
March 23, 2021 at 11:09 am
More solar in the queue than the peak consumption ever? Won’t it be hilarious if the reason Texas finally connects to surrounding grids, subjecting itself to FERC, is because they want to sell electricity?
March 23, 2021 at 4:01 pm
that’s going to be a big motivator.
Texas has below zero electricity prices on a regular basis, and as more renewables come on line, its the same companies that own the turbines, panels, etc, so the pressure will be there.
March 23, 2021 at 11:15 pm
The article may mislead some people because it doesn’t clearly differentiate between capacity and production and doesn’t mention capacity factor.
The price of renewable energy remains cheap and is getting cheaperer; it’s per KWh so it already takes capacity factor into account. But putting in 76,000 MW of solar capacity won’t lead to the same amount of increase in electricity produced as putting in that much wind. I don’t know the marginal capacity factors of either west Texas or coastal Texas wind but I’m guessing they’re about 40%, almost twice solar’s. [1] Offshore wind will be higher, but in the Gulf probably won’t equal capacity factors of 60%+ being reached in the North Sea and likely along the northeast US and Canadian coast.
[1] However, even without any of the numerous solar revolutions that are imminent, solar production, and somewhat capacity factor, can be improved by the use of single- (+20%) or double- (+35%) axis tracking, bifacial panels (+15%) with reflective ground, reduction of pollution (almost inevitable as renewables replace fossil fuels) (+12%)… And don’t forget the triboelectric nanogenerators! (6.5% efficiency) A combination of all those could improve solar efficiency by 62%, resulting in 35% efficient solar panels.
There will be a decrease in cost to go along with it, probably not as much.
https://cleantechnica.com/2018/12/27/the-solar-tracker-global-growth-rate-is-stunning/
https://www.euroscientist.com/scientists-design-new-solar-cells-to-capture-energy-from-rain/
PS The Bloomberg piece requires a subscription.
March 24, 2021 at 6:06 am
The triboelectric thing is a joke – you’re getting 6.5 % of s.f.a. Tracking panels have started to turn the traditional bell curve of solar output into a flat topped plateau ( on good days ). Bad days … New South Wales just had a week of solid rain. Not to worry – the coal that makes eighty percent of their power just kept on smokin’.
March 24, 2021 at 9:51 am
And yet, NSW is planning on more wind, solar, and hydro: https://energy.nsw.gov.au/sites/default/files/2020-11/NSW%20Electricity%20Infrastructure%20Roadmap%20-%20Detailed%20Report.pdf
Now why do you think that is so.
March 24, 2021 at 11:41 am
https://interactive.guim.co.uk/2016/03/comics-master-2016/embed/embed.html?srcs-mobile=https://media.guim.co.uk/0e8c104ba5183900e59fe6a27561fe7d2097d4a7/0_6_1835_4057/452.jpg+https://media.guim.co.uk/0e8c104ba5183900e59fe6a27561fe7d2097d4a7/0_4095_1835_5892/623.jpg&ratios-mobile=221.23893805309734+320.51282051282055&srcs-desktop=https://media.guim.co.uk/d41d165eb6fb082815ae345a01e05c1a32c17002/0_0_3508_5584/3508.jpg&ratios-desktop=159.23566878980893&credit=Cartoon%20by%20First%20Dog%20on%20the%20Moon&background=669933&vpadding=6
Double access tracking increases peak power but even more, it increases power at the leading and trailing edges and increases both capacity and capacity factor. Of course if a substantial part of that power goes to nihilistic narcissistic psychopaths who deny reality in order to hasten the end of civilization and most life on Earth, then maybe we shouldn’t bother.
6.5 now. Five years from now, who knows? And 6.5% of a lot is a lot. Especially at night during the rainy season, and during the weather NSW may have just gone through. (Again, who knows?) Oneill is starting to look as pitiful and backwards-looking as people who insisted in 1930 humans couldn’t fly. Or the people now who insist COVID and climate cataclysm don’t exist and tobacco doesn’t cause cancer. Well, when I say “starting”…
As long as we’re cherry picking, let’s cherry pick California, where a 20% solar grid becomes 30% just with those improvements, and with the ever-improving wind power, geothermal and storage already added, coal now provides 0.15% of power. (1500 wind turbines in Altamont Pass were recently replaced by enough new ones to produce the same amount of electricity–82 of them. And it’s decreasing. Or Iceland’s 100% RE grid, 82% RE primary energy; Norway, 98% RE; or Austria 78%; Costa Rica 100%; Belize 97%; Brazil 83%; Scotland 90%; and the 65 other countries and multi-country grids that are mostly renewable, including at least 25 at or near 100% RE.
March 24, 2021 at 12:24 pm
People who know any reasonable amount about solar—enough at least to knowledgeably comment on the subject—know that it doesn’t stop producing just because it’s raining. Which explains why Oneill either didn’t know that or lied about it.
https://www.greenconvergence.com/blog/2018/march/do-solar-panels-work-on-rainy-days-/
and that of course that’s the great thing about using the power of rain to produce even more energy, which Oneill is trying to ridicule because s/he’s afraid of it.
It’s not one part of the hocketed clean safe renewable energy system that’s important, it’s the complementary whole that provides, and will provide all the energy the world needs, despite the ARFs. That includes CSP, clothesline paradox energy, wind, hydro, geothermal, ocean energies, and other clean safe renewable energy.
March 25, 2021 at 8:58 pm
As noted before, solar in Sth Oz averaging 10% of requirements, is periodically hitting 100% of requirements. Goody! Sunday two weeks ago the regulator shut down several 10k of systems to stabilize the grid. They also have demanded the right to CHARGE PV owners for imputing electricity into the grid. These escalating difficulties will hurt the economics of renewables as they increase. As in, weather good, high output low price. Weather bad, good price, low output.
J4Z, solar doesn’t stop because it is raining! You are out of your ever loving mind.