Lean on Me - Gas Storage and Gas-Fired Power Key to Increasing Renewables

The Western states continue to ramp up their renewable energy mandates—California and Oregon, for instance, plan to get at least 50% of their electricity from renewable sources, and Colorado has set a 30% requirement. Ironically, this renewable energy trend puts a spotlight on natural gas, whose at-the-ready supply will be needed to fuel the West’s increasing number of gas-fired power plants at a moment’s notice to offset the up-and-down output of solar facilities and wind farms. One way to help ensure natural gas availability is have gas storage capacity close at hand. Today we look at ongoing efforts to add tens of billions of cubic feet of natural gas storage in the Western U.S., primarily to help ensure the fueling of nearby gas-fired power plants that back up variable-output solar and wind.

The interconnectedness of the crude oil, natural gas and natural gas liquids (NGL) markets is a mantra of ours in the RBN blogosphere, and it’s the theme of “The Domino Effect”. Another joined-at-the-hip connection that gets less attention is the one between natural gas and renewable energy. The gas/renewables link relates to the fact that solar and wind—the two renewable-energy sources whose development and use have been rising exponentially the past few years—produce power efficiently and without any fuel costs, but only intermittently (when the sun shines and the wind blows). While experience has given electric-grid operators an ever-improving ability to anticipate the ramping up and down of both solar and wind output, there will always be variability—surprises too—in how much power solar facilities and wind farm produce, as well as a need to replace renewable-energy drop-offs with power from other generation sources. As it turns out, modern gas-fired power plants—either “simple-cycle” combustion turbines (CTs) or “combined-cycle” plants—are the most flexible and most responsive in that their output can pretty much be dialed up or down on an as-needed basis. But gas-fired power plants need gas to run, and sufficient pipeline gas supply (at the moment it’s needed) is not a given. Enter gas storage capacity, which in much of the rest of the country is used primarily to stockpile excess gas each spring through fall for winter-time consumption, but which also plays a year-round, day-to-day role in ensuring that regional pipeline networks stay balanced.

As we said, the Western states have been at the forefront in setting ambitious goals—legal mandates, actually—for increasing the portion of their electricity needs that is met by renewable sources of power that do not produce greenhouse gases. (Solar and wind have emerged as the most cost-effective renewables.) California’s updated renewable portfolio standard (RPS), for example, now requires that 50% of the state’s electricity come from renewables by 2030; Oregon has a 50%-by-2040 renewables mandate (see Figure 1).

To access the remainder of Lean on Me - Gas Storage and Gas-Fired Power Key to Increasing Renewables you must be logged as a RBN Backstage Pass™ subscriber.

Full access to the RBN Energy blog archive which includes any posting more than 5 days old is available only to RBN Backstage Pass™ subscribers. In addition to blog archive access, RBN Backstage Pass™ resources include Drill-Down Reports, Spotlight Reports, Spotcheck Indicators, Market Fundamentals Webcasts, Get-Togethers and more. If you have already purchased a subscription, be sure you are logged in For additional help or information, contact us at info@rbnenergy.com or 888-613-8874.