The Gas-Power Nexus

Gurcan Gulen

Chapter Chapter 2 in Monetizing Natural Gas in the New “New Deal” Economy, 2021, pp 127-187 from Springer

Abstract: Abstract After years of growth, gas-fired generation became the largest source of electricity in 2015. New gas-fired capacity has been expanding most in regions with large baseload capacity retirements, all with access to low-cost shale gas. With more baseload plants slated to retire and cost of gas expected to remain competitive, gas burn should increase. There are headwinds. Decarbonization policies are spreading across the country promoting not only renewables but also other measures that can transform the power system to a more distributed structure. An anti-gas movement is expanding, stimulated by concerns around methane leaks, flaring and hydraulic fracturing, and makes obtaining social license to operate more difficult. These trends imply a reduction in gas-fired generation. Yet, there is growing awareness about technical limitations and costs of integrating large intermittent renewable capacity. Retail costs have been increasing in states with most ambitious clean energy goals. The gas industry is reducing its environmental externalities across the supply chain. Combined with massive reductions in local pollution when gas-fired generation replaces coal-fired generation, gas could regain public acceptance. Given all of these uncertainties, I put forth a qualitative outlook of roughly +/−30 percent change in gas burn by 2035.

Date: 2021
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DOI: 10.1007/978-3-030-59983-6_2

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