Natural Gas Facing Some Of The Same Headwinds Coal Faced Ten Years Ago

[hatrack]

The former vice president’s efforts to walk a tightrope on gas reflect the fossil fuel’s precarious place in the economy. For now, it’s an essential part of American life. Biden has been careful not to make an enemy of the industry, especially in the key battleground state of Pennsylvania, home to the largest U.S. shale-gas field. His policies may even, in the short-term, support the gas market.

But in the long run, the fuel may prove economically and environmentally untenable within the power sector, a key market for producers. Biden’s climate plan would only accelerate that outcome, with massive investments in wind, solar and battery storage giving those energy sources a leg up. And his goal of a carbon-neutral grid would severely curb, if not destroy, gas’s share of the pie in favor of cheaper, cleaner renewables. “Decarbonization isn’t a debate — it’s a fossil-fuel death sentence,” said Kevin Book, managing director of ClearView Energy Partners. “It means a resource is going off the grid. That is the inevitable implication.”

Gas, like coal a decade ago, is facing economic headwinds. While it’s still the nation’s dominant fuel source, it’s less competitive against renewables than it used to be. Solar and wind are now cheaper than gas-fired power in two-thirds of the world, according to a BloombergNEF report. In the U.S., solar and wind are already less expensive than even the most efficient type of new gas-fired turbine, Lazard Ltd. said Monday.

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The economics put gas in a roughly similar position as coal in the years before President Barack Obama took office. In coal’s case, Obama hastened its decline by imposing new environmental regulations that made coal plants more costly to operate – notably the 2012 Mercury and Air Toxics Standards that limited toxic emissions from plants, and the 2015 Clean Power Plan that curbed carbon emissions. A Biden administration could take a similar tack, imposing new — and more stringent — limits on greenhouse gas emissions from power plants. He could also reinstate and possibly strengthen Obama-era rules curbing methane leaks from gas infrastructure, which were repealed by President Donald Trump. Both have the potential to drive up the cost of gas-fired electricity, without banning the fuel.

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https://climatecrocks.com/2020/10/19/gas-looking-like-coal-just-before-the-crash/#more-62469

[hunter]

1. Natural gas is often the primary power source when the wind's not blowing and the sun's not shining.

Without natural gas wind and solar power are useless in a high energy industrial consumer economy.

Solar power reduces the rate of natural gas consumption but it will not eliminate it.

[Finishline42]

2. No doubt

But the point is that wind and solar are getting cheaper. Battery storage is being added to extend their usage when the sun doesn't shine and the wind doesn't blow.

The more wind and solar assets that come online reduces the time that natgas power plant is used which of course drives up the cost for those plants. Which means utility companies will bring on more wind and solar.

The other problem with natgas is that just like any commodity, it goes thru price swings. When it's cheap the fracking companies go chapter. When it gets expensive the utility companies buy more wind and solar.

The key issues with wind and solar are battery storage and transmission lines. Texas has been able to get to 20% their electricity from wind because of the transmission lines they built from West Texas to Dallas/Ft Worth area.

RE: battery storage
Elon Musk during earning call on Oct 21

Tesla has reported a huge increase in demand and installations for its energy storage products – both at grid scale and in the home – but has lamented the lack of battery cells that is causing backlogs of energy storage orders and is even inhibiting the roll out of other products such as the Tesla Semi, its electric truck.

“We just need more cells,” Musk said in an earnings call with analysts, after yet another record breaking quarterly profit and record cash flows, and where Tesla confidently predicted it would reach its original forecast of half a million electric vehicle delivers, despite the hold-ups caused by Covid-19 shutdowns.

The production of new battery cells, however, is emerging as a major issue. Tesla reported backlogs in its battery storage products, particularly for Tesla Powerwalls, and Musk said that the roll-out of the Tesla Semi, the electric truck, which will have very big batteries – up to 1MWh, compared to 50kWh for the Model 3 SR+ – is also being held up.

At the recent Battery Day, Tesla unveiled several new developments in battery design and technology, but also put out a call to the mining industry to ensure that the supply of battery materials was enough to meet storage demand, particularly as Tesla rolls out more Gigafactories and aims to produce 20 million vehicles by 2030..

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Johnson said large scale solar plus storage is now more cost effective than traditional fossil fuel generation in many locations across the globe. “This trend will continue as we remove costs, which will further displace existing and new fossil fuel generation. This is true for standalone storage as well.”

https://reneweconomy.com.au/we-just-need-more-cells-musk-laments-lack-of-battery-capacity-37003/