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Page added on January 20, 2015
Natural gas to unseat coal as generation king by 2035
Information Administration predicts that natural gas will dethrone King Coal by 2035, and a number of market forces are at work that may assure that ascension.
Coal through the first three quarters of 2014 provided roughly 51 percent of the nation’s electricity, and Wyoming supplies about 40 percent of that coal. Comparatively, natural gas through the period fueled about 20 percent of utility generation.
In other words, the transition hasn’t happened just yet. However, 45 gigawatts of coal-fired capacity is set to retire in the next two years, and most of it will likely be replaced by natural gas generation. In Wyoming, the 132-megawatt Cheyenne Prairie Generating Station recently went online, replacing 82 megawatts of “older, coal-fired generation that cannot be economically retrofitted to meet new EPA air emissions regulations and must be retired,” according to a company release.
“We’re heard for some time that this conversion from coal to natural gas in the U.S. power generation fleet was coming,” said Don Collins, Western Research Institute’s CEO in an email to industry insiders he shared with the Business Report. He then assembled a list of changes that could make it more difficult for coal to compete against natural gas.
Among those changes are EPA regulations that will require significant reductions in emissions of mercury, acid gases, toxic metals, or MATS as well as carbon dioxide. The rule for MATS is expected to force 90 percent of coal closures within a year of enforcement, or by 2016. The carbon dioxide rule has yet to be finalized, but may force another 50 gigawatts of coal-fired closures by 2020.
Additionally, Collins said utilities are beginning to scale and build their power plants with a different mentality, especially in rural areas. He said that at the National Rural Electric Cooperative Association’s recent conference, he learned that many rural co-ops are beginning to install farms of reciprocating engine generators operating on natural gas.
“This seems to provide flexibility in rapid start up and ramp rates compared to natural gas combined cycle plants and allows smaller power increment additions,” he said. “Most of the reciprocal-gen farms were around 80 megawatt to 180 megawatt plants and as such can be located closer to the load to avoid long-distance transmission investments.”
Additionally, he said the Euro has weakened against the dollar, making European producers of the technology a great bargain, essentially halving the cost per kilowatt of generation capacity. He said if costs stood at $1,100-$1,200 per kilowatt recently, but the fall of the Euro has placed costs closer to $600-$700 now. And some analysts expect the Euro to drop even further against the dollar.
11 Comments on "Natural gas to unseat coal as generation king by 2035"
Makati1 on Tue, 20th Jan 2015 7:02 pm
Dream on!
Plantagenet on Tue, 20th Jan 2015 7:32 pm
US coal producers are now exporting their coal. The switch from coal to NG in the US will result in net CO2 reductions here, but since the US coal is now exported actually CO2 production globally goes up.
mbnewtrain on Tue, 20th Jan 2015 10:33 pm
The use of more reciprocating engines to produce power from natural gas has a thermal efficiency of about 30%. Combined cycle power plants running on natural gas have a thermal efficiency of 60%. Even though the capital cost of reciprocating engines are much lower than for the combined cycle plant, in the long run operating costs are way lower for combined cycle. Should gas return to historic cost levels of about $5 to $6 per million BTU, those that operate the recip. plants will be providing very high cost electricity compared to nat. gas combined cycle or coal thermal plant.
GregT on Tue, 20th Jan 2015 10:47 pm
Coal and natural gas both contribute to accumulative greenhouse gases in the environment. Efficiencies mean nothing other than it takes us a bit longer to get to the same place. We either stop contributing to a runaway greenhouse event, or we don’t. Economics, costs, efficiencies, and all of the other denialist BS, won’t make any difference at all, other than the period of time that it takes us to cause our own extinction.
rockman on Wed, 21st Jan 2015 1:14 am
Let’s keeping it simple: in 2035 if $10 worth of coal can create 5X the BTU that can be created by $10 worth of NG who will be wearing the crown? Of course I have no way to predict what that ratio will be in 2035. OTOH no one else does either. Which is probably why little attention in this article is paid to the pricing dynamic.
Davy on Wed, 21st Jan 2015 5:09 am
Newtrain, I am a proponent of combined cycle generation but with the application of further using waste heat for industrial, home heating, and or AG applications. We could see more of this around existing power plants as a waste heat salvage effort. The problem is time and money for new CCG. It is like shiny new AltE. We are nearly out of both time and money. When descent gathers steam salvage strategies are going to gain importance. Waste heat off power plants is huge. It is also a huge waste of water.
I personally would like to see more low cost AltE that is low tech, low power, end user dispersed, and robustly reliable while we have the money and time. These systems would work in conjunction with grid power especially in combined cycle generation plants that utilize waste heat and water as far as possible out of the generation process and into community activities. Low tech AltE increases reliance for when the grid destabilizes. Lights are absolutely important for night activity.
We need to focus just as hard on the nonphysical of attitudes and lifestyles. The biggest low hanging plumb is lifestyles and attitudes. This is also tricky for the economy. We must remember actions have reactions. The economy is so complex and interconnected these changes can be disruptive elsewhere. Yet, I am all for changes that drive a manageable crisis i.e. involuntary and voluntary actions to adjust to limits of growth and diminishing returns especially from our financial and oil sector. These two sectors will likely bring BAU down in a negative synergism that will destroy demand and supply in a vicious bumpy cycle down. Oil depletion and the debt descent is in process.
This process of BAU decay can be made hybrid. We can try to maintain all those already built out economic assets that have high production value. Far fewer will be in use because likely everything will drop in complexity and energy intensity. Hybridization and salvage strategies must be considered now along with mitigation and adjustment actions revolving around lifestyle and attitude changes.
We must further recognize that efforts away from normal BAU growth strategies at a large enough scale will precipitate a broad based BAU decay. BAU needs economies of scale, efficiency of time/inputs, and low labor costs. Automation, dispersed production/distribution, and parasitic finance are currently required. These aspects of BAU are at limits and in diminishing returns with significant decay around the corner. Building out any new infrastructure with BAU components requires more environmental destruction and carbon. Let us try to use what we have already. Technology and new development is no longer the answer yet, let’s not through the baby out with the bath water with built out assets. Too much has been invested from the past that can be utilized in the power down.
dave thompson on Wed, 21st Jan 2015 8:23 am
Sounds like a silly sales pitch for more fracking investment.
Mike999 on Wed, 21st Jan 2015 10:41 am
Solar and Wind will be the leader in 5 years.
Kenz300 on Wed, 21st Jan 2015 11:51 am
Consider the source when reading any article…..
Wyoming business pushing fossil fuels is no surprise.
Facts matter……. too bad the RepubliCON party and Faux Noise make up their own……. “OPINION” does not replace “FACTS”
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Solar and Wind Provide 70 Percent of New US Generating Capacity in November 2014
http://www.renewableenergyworld.com/rea/news/article/2014/12/solar-and-wind-provide-70-percent-of-new-us-generating-capacity-in-november-2014
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Utility-scale Solar Has Another Record Year in 2014
http://www.renewableenergyworld.com/rea/news/article/2014/12/utility-scale-solar-has-another-record-year-in-2014
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Dizzying Renewable Energy Price Declines Can Help States Meet Ambitious Carbon Targets Under The EPA’s Clean Power Plan
http://www.renewableenergyworld.com/rea/news/article/2014/12/dizzying-renewable-energy-price-declines-can-help-states-meet-ambitious-carbon-targets-under-the-epas-clean-power-plan
Speculawyer on Wed, 21st Jan 2015 3:17 pm
” in 2035 if $10 worth of coal can create 5X the BTU that can be created by $10 worth of NG who will be wearing the crown”
Well, I think those numbers are waaaaay off from the current prices.
And prices are definitely not the only thing that matters. By 2035, we will certainly have been hit by more floods, droughts, heat waves, polar ice melt, extinctions, fires, storm surges, sea level rise, epidemics, and other things that can be linked to climate change. So we will have probably changed some laws to take the issue far more seriously by then.
So I think they are right that NG will overtake coal. It might overtake coal much earlier than that. And I think people are underestimating the deployment of solar PV and wind. When people realize how cheap & easy it is to eliminate your electric bill, I think more people will adopt solar PV.
chris on Tue, 14th Apr 2015 1:37 am
As an engineer (but not a utility employee) I am stunned to learn that relatively small reciprocating motor-gens are more than cost-competitive with gas turbines, despite poorer efficiencies. That comparison may reflect the high costs of turbine blade manufacture. Or production volumes. Gas turbogenerators are more efficient for a basic reason- they operate at higher combustion temperature than reciprocating engines. The deployment of such less efficient generators can be cost- effective when used to meet peak loads. Then, marginal generation cost, due to fuel, is more important than capex.