Tag Archives: natural gas

CPS Energy board approves plan to phase out coal by 2028

At-a-Glance

CPS Energy’s board of trustees voted 4-1 on January 23 to approve a new energy mix, which will see the municipally owned utility phase out its use of coal by 2028. For more, read CPS Energy board approves plan to phase out coal by 2028.

Key Takeaways

  • Under the approved plan, CPS Energy will shut down one of two remaining coal plants in 2028 and convert the second to a natural gas plant by 2027, which will run indefinitely.
  • The new mix aims to minimize CPS Energy’s reliance on the grid and to ensure it has plenty of dispatchable energy – meaning it can be turned on and off when needed.
  • Known as Portfolio #2, the plan will add roughly 4,928 megawatts of generation capacity to the utility’s portfolio over the next seven years, including 1,380 megawatts from combined cycle natural gas and about 800 from reciprocating internal combustion engines that run on natural gas or diesel.
  • Another 500 megawatts will come from wind, 1,180 from solar, and 1,060 from lithium battery storage.
  • CPS Energy officials emphasize that the utility will revisit the portfolio every two to three years, and Portfolio #2 offers enough flexibility that as cleaner technologies come online, they can be added to reduce CPS Energy’s reliance on natural gas.

Path to 100% Perspective

Utilities in the United States are seeing the value and beginning to invest in flexible gas solutions as part of their portfolios to integrate a growing share of renewables in the most efficient manner. CPS Energy’s plan, which includes fast starting gas power plants, will give the utility a solid and much cleaner portfolio that provides optimized and reliable electricity to its customers. Their plan also sets a precedent for how a Texas utility can accelerate the transition toward 100% renewable energy with hybrid solutions. Including flexible gas assets in the portfolio is now becoming the best and fastest way to integrate renewables and ensure security of supply, regardless of weather conditions.

Total Sees Oil Demand Peaking Before 2030 in Power Switch

At-a-Glance:

French energy giant TotalEnergies SE expects global oil demand to peak before the end of this decade, as more nations crack down on fossil fuels and promote cleaner power in transport and industry to mitigate global warming. Total’s 2021 Energy Outlook, which takes into account new net-zero pledges made by countries including the U.S. and China, assumes crude demand will plateau before 2030 and then decline. To learn more, read, “Total Sees Oil Demand Peaking Before 2030 in Power Switch.”

Key Takeaways:

  • Total’s Momentum scenario, which is based on environmental targets and policies announced worldwide, points to a 2.2 to 2.4-degree increase in global temperatures by the end of the century.
  • This year’s report “considerably” raises the company’s forecasts for global solar and wind investments by the middle of the century to electrify transport as governments increasingly ban the sale of internal combustion vehicles.
  • Meanwhile, natural gas is seen keeping its role as a transition fuel, especially as carbon dioxide and methane emissions are increasingly reined in.

Path to 100% Perspective: 

According to the IEA’s landmark 2050 roadmap, there is a viable pathway to build a global net zero emissions energy sector by 2050, but it is narrow and calls for a transformation in how energy is produced, transported and used globally. The Intergovernmental Panel on Climate Change (IPCC) recommends that to limit global warming to 1.5C°, global CO2 emissions should decline by 45% by 2030 in comparison to 2010 and reach net zero by 2050.

Meanwhile, the price of electricity does not need to increase when power systems move to net zero. Utilities are shifting from a costly operational expenditure (opex) model, where capital is continually drawn into fuelling and maintaining legacy inflexible coal, oil, and gas plants – to a new model where up-front capital expenditure (capex) is invested in predictable, low maintenance, renewable energy technology. Flexibility creates the conditions where renewable energy is the most profitable way to power our grids: ensuring back-up power is available when there’s insufficient wind or solar – and earning rewards from capacity mechanisms.

 

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Renewables generated a record amount of electricity in 2020, EIA says

At-a-Glance:

In 2020, renewable energy sources (including solar, wind, hydroelectric, biomass, and geothermal energy) generated a record 834 billion kWh of electricity, or about 21% of all the electricity generated in the United States. Only natural gas (1,617 billion kWh) produced more electricity than renewables in the United States in 2020, according to the Energy Department’s Energy Information Administration (EIA). To learn more, read “Renewables generated a record amount of electricity in 2020, EIA says.”

Key Takeaways:

  • Renewables surpassed both nuclear (790 billion kWh) and coal (774 billion kWh) for the first time. EIA said this outcome was due mostly to “significantly less coal use” in U.S. electricity generation and steadily increased use of solar and wind.
  • U.S. electricity generation from coal in all sectors declined 20% from 2019, while renewables, including small-scale solar, increased 9%.
  • Wind, currently the most prevalent source of renewable electricity in the United States, grew 14% in 2020 from 2019.
  • Utility-scale solar generation (from projects greater than 1 MW) increased 26%, and small-scale solar, such as grid-connected rooftop solar panels, increased 19%.
  • Renewables are again forecast to eclipse coal in 2022 as capacity grows and coal’s cost advantage eases.

Path to 100% Perspective: 

Investing in renewable baseload is now viewed as buying ‘unlimited’ power upfront, as opposed to betting against fluctuating oil prices and narrowing environmental regulation. The early leaders of the renewable transition are now outperforming their counterparts in the fossil fuel sector. New capex is now surging in the power sector, driving the build-out of renewables at an unprecedented rate in areas of the world, such as Chile and New Mexico, that yield the highest renewable power capacity factors. Faced with the magnitude of the transition, some power producers have stopped investing – stopped progressing. Some are waiting to see if renewable technology costs fall even further as the sector transforms in front of their eyes. However, power producers that stall their investments risk being left with portfolios that rely on legacy technologies, which can only provide diminishing returns, while the low hanging fruit for solar and wind parks is progressively being capitalized by the first movers. Delaying the transition to renewables will reduce the competitiveness of power producers, as well as putting national climate targets out of reach. 

 

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What does negative net zero carbon mean?

At-a-Glance:

Negative net-zero carbon. The phrase sounds redundant or oxymoronic. But it is a real thing. You can have less than net-zero carbon emissions if you capture and use emissions that otherwise would be released as greenhouse gas into the atmosphere. To learn more, read “What does negative net zero carbon mean?”

Key Takeaways:

  • Renewable natural gas (RNG), or biogas, is derived from organic waste material. Biogas can be captured and used as fuel in place of traditional natural gas.
  • According to a University of California Davis study, there is so much organic waste available in California that more than 20% of the state’s residential gas needs could be met with RNG.
  • California Air Resources Board (CARB) data shows that the average “carbon intensity” of all renewable natural gas vehicle fuel in the state’s Low Carbon Fuel Standard (LCFS) program was negative for the first time in program history.
  • RNG made up nearly 90% of all natural gas vehicle fuel in the low carbon fuel program and consumed in California in the first half of 2020, up from around 77% in 2019, according to CARB data.
  • According to an EPA study, if you capture all the methane coming off of RNG capture potential areas, you could run about 200,000 trucks on renewable natural gas every year.

Path to 100% Perspective:

The role of natural gas in power generation is increasing as it is being more widely utilized to run power plants that are integrated with intermittent wind and solar systems. As the share of wind and solar capacity increases and the net load to thermal plants decreases, gas power plants can also provide peaking to system balancing. Renewable natural gas can be leveraged as a fuel source to replace fossil-fuel based natural gas, thus moving the world one step closer to decarbonization and a 100% renewable energy future.

 

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Utilities Are the Focus Of Electrification And Decarbonization, But Can They Deliver?

At-a-Glance:

In the early 2000’s, utilities were unable to grasp the climate change movement. Today, they have been swept up by it – a function of stricter environmental regulations, cheaper natural gas, and affordable renewables. But if electrification and decarbonization are realized, it could pay big dividends for power companies. To learn more, read “Utilities Are The Focus Of Electrification And Decarbonization, But Can They Deliver?” Reading this article may require a subscription from the news outlet.

Key Takeaways:

  • About 70% of the largest U.S. electric and gas utilities now have net-zero goals, says S&P Global Market Intelligence.
  • The Boston Consulting Group analyzed a “model utility” with 2-3 million customers. It found that it would need to invest between $1,700 and $5,800 in grid upgrades per electric vehicle (EV) through 2030.
  • Xcel Energy has announced plans to serve 1.5 million EVs by 2030. Xcel Energy Chair Ben Fowke expects 60% of the utility’s electric generation to be fueled by renewables in 2030 – with some natural gas as a backup.

Path to 100% Perspective:

Carbon neutral and carbon free systems must install enough capacity (with the right capabilities) to meet energy needs in worst-case scenarios. At a minimum, to assure reliability and avoid blackouts, utility system planners and policy makers need to account for seasonal trends in availability of renewable resources. Accurate modelling can make a critical difference in renewable integration, resilience and reliability. Finally, energy storage systems designed for daily shifting with less than 12 hour duration are not cost optimal for long-term storage and energy time-shifting in high renewable power systems.

 

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Texas Blackout Hearings Highlight Intertwined Risks of Natural Gas, Power Grid and Deregulated Market

At-a-Glance:

The catastrophic breakdown of Texas’ natural gas and electric system the week of February 15 lacks a single villain to blame for it all. Instead, the widespread constraints in natural-gas supply and the shutdown of core power plant capacity that left millions without power can be chalked up to cascading failures between two interdependent systems – and any solutions will need to take these interdependencies into account to avert a similar crisis in the future. To learn more, read “Texas Blackout Hearings Highlight Intertwined Risks of Natural Gas, Power Grid and Deregulated Market.”

Key Takeaways:

  • In a hearing held on February 25, power company executives pointed to natural-gas shortages for forcing more than half of the state’s winter peaking generation fleet to shut down. That loss of generation capacity forced state grid operator ERCOT to institute rolling blackouts to prevent a broader grid collapse.
  • The hearing saw disputes over whether failure to winterize the state’s natural-gas infrastructure was primarily to blame for the shortages, as opposed to a surge in demand for the fuel for both power generation and heating.
  • Underlying these technical failures are questions about the role of the state’s deregulated energy market structure.
    • ERCOT is the only major grid that operates outside the federal regulatory authority that sets maximum market prices.
    • For two decades, Texas’ energy markets have lacked the capacity and resource-adequacy constructs that other states and grid operators use to secure resources to cover rare but potentially disastrous imbalances between electricity supply and demand.
    • Instead, Texas relies on scarcity pricing of up to $9,000 per megawatt-hour during times of peak grid stress to incentive power plant owners to invest in resources to cover those emergencies.

Path to 100% Perspective:

In both Texas and California, the widespread blackouts reveal the need for updated policy, improved planning as well as technological and chronological power system expansion along with adequate modeling. Updated policy means including these renewable fuels and the plants that use them to count towards clean energy goals. As many believe climate change will make extreme weather events more common and even more unpredictable, state policymakers and regulators need to act now to decarbonize the electricity sector.

 

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How To Light A Fuse Under The Green Hydrogen Economy

At-a-Glance:

Generating electricity from clean hydrogen has always been elusive. But that may change in the not-so-distant future: the technological, political and environmental factors – the variables to create the hydrogen economy – are aligning. What remains a sticking point, though, is the cost factor. To learn more, read “How To Light A Fuse Under The Green Hydrogen Economy.” Reading this article may require a subscription.

Key Takeaways:

  • More than 99% of the world’s hydrogen production comes from fossil fuels (called grey hydrogen). The goal is to get to green hydrogen, where solar and wind power is used to produce electricity that is put through an electrolyzer to create pure hydrogen gas.
  • In the interim, some say that a mix of green and blue (produced from natural gas using carbon capture and storage) hydrogen is a faster and more optimal solution. Currently, green hydrogen can be blended with natural gas at a rate of 15% while getting to 30% is doable.
  • The Los Angeles Department of Power and Water has agreed with Utah authorities to buy much of the output of the Intermountain Power Project which will generate hydrogen from wind and solar.
    • The plant will convert to a natural-gas-combined-cycle facility that can burn hydrogen as a fuel.
    • By 2025, 30% of electricity will come from hydrogen and by 2045, all of it will.
  • In its Hydrogen Economy Outlook, Bloomberg New Energy Finance says that green hydrogen could cut global greenhouse gases by 34% by 2050.
  • “Hydrogen has potential to become the fuel that powers a clean economy,” writes Kobad Bhavnagri, lead author of the Bloomberg report. “If the clean hydrogen industry can scale up, many of the hard-to-abate sectors could be decarbonized using hydrogen, at surprisingly low costs.”

Path to 100% Perspective:

Hydrogen and synthetic fuels, such as hydrogen-based renewable synthetic methane, promise to be an important piece of the decarbonization puzzle. Creating such a flexible power system would accelerate the global transition to 100% clean energy.

 

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The Texas Polar Vortex Resurrects the Decarbonized Grid’s Fuel Diversity Question

At-a-Glance:

This article is not about which generating technologies caused the blackouts experienced in Texas and states across the Midwest this week. However, these events can get us thinking about where the industry goes from here. First, the U.S. natural-gas supply network was stressed by record demand and prices. The record-high gas demand would have been even higher without the rolling blackouts that were imposed because more homes with central heat would have run either gas-fired heaters or electric heat pumps, which would have been powered mostly by coal- or gas-fired generators if those weren’t impacted by outages. To learn more, read “The Texas Polar Vortex Resurrects the Decarbonized Grid’s Fuel Diversity Question.”

Key Takeaways:

  • The nine days between February 9 – 17 seem to highlight a fuel-diversity dilemma for U.S. decarbonization targets and policies. Coal and natural gas comprised 65% of the power generation mix, 30% and 35% respectively, while utility-scale wind and solar only provided 6%.
    • Many utility integrated resource plans seek to quickly replace coal plants with new, or existing but underutilized, natural-gas plants as “bridge fuel,” while adding large amounts of wind and solar over the next five to 20 years.
  • An increase in natural-gas usage during a repeat polar vortex event would likely lead to more grid reliability problems. There are two options to prevent this:
    • Expand U.S. natural gas supply/network to support even higher send-out for an extended cold snap.
    • Build enough renewable energy sources to offset the loss of coal generation and prevent increased natural gas demand during an extended cold snap.
  • Wood Mackenzie’s latest Long-Term Outlook forecasts the U.S. adding over 1,300 GW of new combined wind and solar capacity by 2050 to reach 85% decarbonization, plus over 400 GW of battery storage.
    • The system would still require some backup natural-gas generation for periods of low renewable energy output.

Path to 100% Perspective:

Power systems won’t decarbonize overnight. The pathway toward a 100% renewable power system will be a phased transformation, leveraging different mixes of technologies and fuels at different steps along the path. Power-to-gas technology is one approach that can ease the transition from fossil fuels to renewables, while providing a long-term energy storage solution that ensures a reliable and secure supply of electricity during periods of extreme weather.

 

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Texas Power Crisis Moves Into Fourth Day With Millions in Dark

At-a-Glance:

Economic fallout from the extreme winter weather that caused widespread blackouts is continuing to have a ripple effect even as power is restored. “The current energy crisis is much bigger than most people realize. This is a global crisis,” Paul Sankey, an oil analyst at Sankey Research, wrote in a note. “The largest energy outage in U.S. history.” To learn more, read “Texas Power Crisis Moves Into Fourth Day With Millions in Dark.” Reading this article may require a subscription.

Key Takeaways:

  • While Texas’s grid operator was able to restore power to 1.8 million homes by Wednesday February 17, 1.2 million homes remained without electricity.
  • Generation capacity on the grid reached 52 gigawatts Wednesday evening, the highest level since Monday morning. Electricity load climbed to 49 gigawatts, indicating that power had been restored to some customers.
  • As of February 17, 43 gigawatts of the state’s generation capacity remained offline, including 26.5 gigawatts of thermal generation that shut due to frozen instruments, limited gas supplies, and low gas pressure.
  • Frozen turbines and icy solar panels shut down nearly 17 gigawatts of renewable energy.
  • Gas production has plummeted to the lowest level since 2017.

Path to 100% Perspective:

The recent Texas power crisis impacted millions of people in Texas and neighboring states. One reason these blackouts occurred is that many power plants are not designed to handle extreme ambient temperatures. Limited natural gas supply and low gas pressure also posed a challenge for power plants across the state. Winterizing gas supply and power plants is a must to avoid similar situations in the future. Although it is more expensive to winterize the gas supply and power plants, this is required to ensure reliability when extreme weather occurs.

 

 

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Texas Storms, California Heat Waves and ‘Vulnerable’ Utilities

At-a-Glance:

In California, wildfires and heat waves in recent years forced utilities to shut off power to millions of homes and businesses. Now, Texas is learning that deadly winter storms and intense cold can do the same. To learn more, read “Texas Storms, California Heat Waves and ‘Vulnerable’ Utilities.” Reading this article may require a subscription.

Key Takeaways:

  • Blackouts in Texas and California have revealed that power plants can be strained and knocked offline by the kind of extreme cold and hot weather that climate scientists have said will become more common as greenhouse gases build up in the atmosphere.
  • The electricity industry typically looks at average annual temperatures rather than seasonal ones. Changing the distribution of power sources based on the seasonal temperatures could help avoid electricity shortages.
  • The Electric Reliability Council of Texas could take a cue from states in colder climates and winterize its power plants and other equipment to prevent future weather-related power failures.
  • That Texas and California have been hardest hit makes clear that simplistic ideological explanations are often wrong. Texas, for example, has relied on market forces to balance its electric grid.

Path to 100% Perspective:

The impacts of climate change and extreme weather are not limited to Texas and California. All states can take steps to ensure their power and natural gas systems can handle the full range of temperatures that climate analysts forecast; winterization is just one example. States should also explore long-term energy storage solutions, such as thermal generation.

 

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3 graphs that shed light on the ERCOT power crisis

At-a-Glance:

As work continued to restore electric power across the Electric Reliability Council of Texas (ERCOT) region, data firm Lium released a series of graphs that offer early insight into the state’s grid performance in the days before the blackouts and immediately after. To learn more, read “3 graphs that shed light on the ERCOT power crisis.”

Key Takeaways:

  • Wind generation progressively slowed and ended up down around 8 GW compared with the prior week.
  • Natural gas generation was suffering shortfalls as well, with a “big crash” in early hours of Monday February 15.
  • Lium concluded that the ERCOT shortfall could have been met had natural gas, coal, and nuclear all been operating at peak summer levels (+9 GW) and if wind were operating at its typical February rate (+ 8 GW).

Path to 100% Perspective:

The recent Texas blackouts demonstrate the importance of having reliable sources of power in the event of extreme weather and natural disasters. Liquid fuels can be stored in large quantities at power plant sites for occasions when gas pressure is too low. In the future, these back-up fuels can be carbon-neutral methanol or ammonia, offering long-term, carbon-free, on-site energy storage. Excess electricity from periods of oversupply of solar and wind energy can be used to produce such renewable fuels locally in Texas.

 

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CEOs outline 3 trends hitting electricity

At-a-Glance:

Major power companies held earnings calls in recent weeks to share their focus on issues such as expanding renewables and the role of hydrogen under a national push for 100 percent clean electricity. Additionally, CEO’s discussed how the COVID-19 pandemic is threatening to delay solar projects and defer grid maintenance. To learn more, read “CEOs outline 3 trends hitting electricity.” Reading this article may require a subscription.

Key Takeaways:

Here are the issues that major electric companies are focused on as 2020 winds down:

  • One effect of the coronavirus pandemic may impact renewable energy development. NRG Energy Inc. CEO Mauricio Gutierrez said a chunk of the pending purchased power in Texas may be delayed six to eight months because of supply chain and financing issues related to the virus.
  • CenterPoint Energy Inc. CEO David Lesar said the company will work on renewable natural gas and hydrogen renewables in Minnesota plus possible new transmission infrastructure to connect to renewable sources in Texas.
  • CEO John Ketchum of NextEra Energy Resources LLC said hydrogen will come into play if federal policy accelerates a zero-carbon goal by 2035.
  • Vistra Corp CEO Curt Morgan said Vistra has “a portfolio of highly efficient, low-emitting natural gas assets that can provide reliable, dispatchable power and complement the intermittent nature of renewable resources.” He explained a diverse portfolio enables renewable products that can ensure reliability and an affordable price. “Every reputable and objective study on the changing power generation landscape has natural gas playing a significant role for several years to come, especially as we electrify the economy,” Morgan said.

Path to 100% Perspective:

These are exciting times as the renewable energy future is a focus for so many organizations and governments around the world. Emerging technologies are moving closer to reality, which makes ambitious energy goals more realistic and the path to 100 percent renewable energy is now within reach. The big challenge facing power generators around the world is how to integrate renewables into the grid while building security of supply and a sustainable power system with an affordable plan for everyone involved. Renewable carbon neutral fuels such as hydrogen and synthetic methane are being explored as solutions for sustainable and reliable power systems. Curtailed renewable electricity is used in the process with water to produce Hydrogen, and carbon is captured from air to produce synthetic methane with hydrogen. These fuels are used in flexible power plants to provide a long term energy storage for seasonal and weather management needs.

 

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