November 14, 2018 Read More →

Power markets in U.S. Northeast, Texas, and North Carolina begin to follow California trend toward more renewables, less natural gas

Green Tech Media:

California has been a haven for solar developers for years. Beginning in 2006, the gigawatts’ worth of solar in its yearly queue of requests rivaled the state’s gas capacity. Wind hasn’t been far behind. And four years ago, energy storage additions began to creep in.

According to Prajit Ghosh, head of global strategy at Wood Mackenzie Power & Renewables, those trends have become even more pronounced in the last two years and have nearly knocked gas from the California queue entirely.

“Really, in the last two years, it’s all solar, wind and storage. There’s no gas,” Ghosh said onstage Tuesday at WoodMac’s Power & Renewables Summit in Austin, Texas. “We know that story.”

California is arguably a unique case. So what happens when taking a look at that same snapshot in other regions around the country?

Ghosh pointed to ERCOT, Duke Progress North Carolina’s territory and the cradle of natural gas, PJM, as indications of a monumental shift in electricity markets.

“There are some markets that need gas, especially where there’s a lot of coal,” said Ghosh. “It seems like even those markets — PJM, the home country of gas — even there, a lot of gas is being replaced by renewables. It’s a reasonable question to ask: Are we already in this new paradigm where solar, storage and wind are the default choice?”

Many energy industry stakeholders, such as utilities, oil and gas majors, and even the federal administration, would likely answer that question with a no.

Just last month, the Energy Information Administration (EIA) reported that PJM’s annual capacity factors for natural gas, which indicate how often a generator is run, were found to have increased between 2013 and 2017. The regional grid operator’s natural gas capacity grew 18 percent during that time. PJM’s growth in natural gas capacity factors was the largest among regional transmission organizations, but EIA noted the rest of the country has also seen natural-gas-fired electricity increase in the last five years.

While low-cost natural gas has pushed out coal capacity, renewables have begun to compete on price as well. Utility requests for proposals that incorporate more renewables and increased investments from oil majors show that even the biggest incumbents are beginning to reckon with the clean energy transition.

More: Have Solar, Wind and Storage Become the ‘Default Choice’?

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