Across the United States , renewable energy sources are impacting natural gas generation. The growth of renewables in the grid, compounded by the increased electrification of energy demand, will expose the grid to the risks of an intermittent renewables supply to meet growing power demand. As a result, in the coming decades, a fully “dispatchable” backup energy supply will be required to ensure the reliability of the power grid for multiday swings. In the absence of breakthroughs in long- duration energy storage, natural gas—which can be implemented at scale—could be the cheapest and lowest-carbon candidate for this role. Demand for gas is expected to be more volatile going forward—lower on average, but potentially much higher on peak-demand days when intermittent renewables are at low generation levels. However, today’s gas system was not designed and sized to deliver the high gas volumes that will be needed on these peak-demand days in the future. Infrastructure upgrades and new market mechanisms will likely be required to position mainstream gas operators to provide the natural gas that consumers will need. Natural gas’ track record in decarbonizing the power sector over the past decade Since 2005, the United States has reduced its energy-related CO2 emissions by about 18 percent.¹ A switch from coal to natural gas accounts for a significant portion of this reduction. According to the US Energy Information Administration (EIA), the use of natural gas in the electric power sector increased by more than 100 percent between 2005 and 2022, while coal use declined by about 55 percent.²
532 million metric tons in CO2 emissions over the same period.³ This has been the most significant decarbonization lever, mitigating the equivalent of more than 10 percent of 2021 US greenhouse gas (GHG) emissions. This is more than double the mitigation of approximately 248 million metric tons of CO2e (carbon dioxide equivalent), which can be attributed to the increase in renewable generation.⁴ Moving forward, the United States has the opportunity to increase the decarbonization impact through natural gas, alongside other power supplies, by continuing coal-to-gas switching, implementing carbon capture and storage (CCS) solutions on existing and future gas-fired power installations, supporting blue hydrogen production, and accelerating the rollout of intermittent renewables beyond the level of 13 percent of power generation in 2021.⁵ In addition, natural gas exports from the United States can support energy supply security and decarbonization efforts overseas—for example, in Europe through coal-to-gas switching and enabling the accelerated rollout of renewables and new energies (such as the hydrogen economy).⁶ The electrification of energy demand and the growth in renewables A major trend in the energy transition is the electrification of energy demand. The greater the electrification of end-use energy needs, the higher the importance of the energy supply reliability to meet growing power demand. To illustrate, the electrification of road-based transportation is currently taking place by replacing internal combustion engine (ICE) vehicles with electric vehicles (EVs), the electrification of household heating is occurring through heat- pump adoption, and the electrification of industrial processes is happening through the electrification of low-temperature heat.
This shift from coal to natural gas for power generation resulted in an estimated reduction of
1 US energy-related carbon dioxide emissions, 2021 , US Energy Information Administration, December 2022. 2 “Electricity data browser,” US Energy Information Administration, June 6, 2023. 3 “Electric power sector CO2 emissions drop as generation mix shifts from coal to natural gas,” Energy Information Administration, June 9, 2021; metric tons: 1 metric ton = 2,205 pounds. 4 Global energy review 2021 , US Energy Information Administration, April 2021. 5 “Electricity data browser table 1.1. Net generation by energy source: Total (all sectors), 2013–March 2023,” US Energy Information Administration, 2023. 6 “How climate action can help deliver EU energy security,” McKinsey, August 12, 2022.
Accelerating the journey to net zero
3
Made with FlippingBook Online newsletter maker