(August 5, 2014 – Platts Gas Daily) Severe drought boosts California gas demand (By: Jim Magill)
As California suffers through a historic drought, low water levels are cutting into the state’s ability to generate hydro-power, setting the stage for natural gas to fill the gap.
But gas faces stiff competition from renewable energy sources, such as wind, geothermal and particularly solar, in capturing a bigger piece of the Golden State’s power generation mix.
California’s power portfolio already is heavily reliant on natural gas to serve its demand needs. In 2014, gas-fired generation averaged 40%...
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…Farther to the south, and despite the drought in California, gas demand for power generation across the Southwest is down by about 1 Bcf compared with the last several years, said Rusty Braziel of RBN Energy.
A big reason for the drop is the increased use of solar energy, particularly rooftop solar generation, in the region where the competing power generation fuel “has come on like gangbusters over the last couple of years, Braziel said.
“The more rooftop solar that you see the less natural gas demand you’ll have,” Braziel said
He added that the California drought is the only factor that is keeping the demand for gas in the region from plunging even lower that it is today. “If we had had a normal hydro year, with a lot of water in the lakes … natural gas would really be down,” he said.
