Natural Gas and Renewables Join Together

Written By Brianna Panzica

Posted January 11, 2013

The U.S. shale gas industry has found itself backed by an unlikely supporter: the renewables industry.

Both domestically and internationally, champions of the renewable sector are supporting the widespread growth of natural gas usage as a complement to green power.

And it may sound counterproductive; natural gas, after all, is an incredibly cheap power source, creating fierce competition for more expensive solar and wind power.

But the International Renewable Energy Agency disagrees. Natural gas and renewables share the common enemy of coal.

From Bloomberg:

“Gas in the first instance is going to displace coal,” Adnan Amin, director-general of the agency known as IRENA, said in an interview in Abu Dhabi. “Shale gas at low cost can help to create a hybrid system,” whereby more gas-fired power is fed to the grid, supplanting coal, and augmented by wind and solar.

While solar and wind power cannot supply constant power since they rely on inconsistent weather patterns, natural gas can – with half the carbon emissions of coal.

And carbon emissions are garnering more attention surrounding the issue of climate change. Even developing nations, with growing power needs, are working to increase reliance on low-emissions technology.

A joint effort between renewable power and natural gas is the way to do that.

Saudi Arabia, for example, has been seeing its growing power needs sap up the oil it relies on for exports. To combat that, the country plans to get a third of its power from solar by 2032 after $109 billion in investments.

In the U.S., natural gas utilities will have the most additions by 2015, but solar and wind will follow behind:

Utility Planned Capacity

IRENA is releasing a report analyzing the costs of renewable power and power from fossil fuels next week. Renewables have seen a huge drop in prices, particularly over the past year, bringing the costs closer than ever before.

And it’s not just international organizations that are hailing the shale boom as a blessing to renewables. Right in the U.S., where the gas is abundant and cheap, some are saying exports will boost the renewable industry further.

One such person is Arno Harris, the CEO of solar company Recurrent Energy. Harris’ view is similar to Amin’s: that together, renewables and natural gas will help displace coal and make even more room for these emerging sources.

But he also believes that there’s a next step in the process: natural gas exports.

A recent report from the Department of Energy showed that there would be a “net economic benefit” to exporting natural gas from the U.S. That benefit, Harris believes, would also include an increase in prices that would put renewables and natural gas in even closer competition.

From the SFGate:

“Everybody knows we’re in this cheap gas environment,” Harris said. “Gas-fired electricity today is probably five cents or six cents per kilowatt hour, wholesale.” But new solar plants that Recurrent Energy is building will sell power to utilities as low as seven cents a kilowatt hour, he said.

“There’s no longer this giant gap like there used to be a few years ago,” Harris said. “What Americans aren’t aware of is in fact how narrow that gap gotten, just as gas is at historically low prices, wind and solar are at historically low prices as well.”

Harris may have trouble getting other renewable supporters to rally behind him. Many environmentalists are still heavily opposed to natural gas production in general because of the stigma surrounding fracking.

But Harris is trying to change that, as is IRENA. Renewable power needs a supplement power source to provide power during downtime. Natural gas, meanwhile, is abundant and cheap. Bringing the two together has the potential to change the face of global energy.

That’s all for now,

Brianna Panzica

follow basic@brianna_panzica on Twitter

Energy & Capital’s modern energy guru, Brianna digs deep into the industry with accurate and insightful updates into the biggest energy companies and events. She stays up to date with the latest market moves and industry finds, bringing readers a unique view of current energy trends.

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