Our Transforming Energy Economy: Pathways to a Decarbonized Future
A growing body of work on the nexus of natural gas and renewable energy offers insight on a transforming energy economy.
Natural gas and renewable energy—two abundant, domestic forms of energy—are often cast in antagonistic roles. But a growing portfolio of studies by the Joint Institute on Strategic Energy Analysis (JISEA, see sidebar) is showing that natural gas and renewables can each contribute—sometimes independently, sometimes together—to economic growth, energy independence, and carbon mitigation. This is good news for consumers and other stakeholders within the changing U.S. energy landscape.
Getting the Right People Together
JISEA, through NREL and its other partners, has the credibility and prestige to gather the most influential stakeholders and thought leaders for lively exchanges on the dynamics, issues, and opportunities facing the natural gas and renewable energy industries.
In 2014, for example, JISEA hosted the NG-RE 360 Degrees of Opportunity Forum, a series of workshops in different locations with different focuses. New York City brought together the investment community; Washington, D.C., considered national policy; and Texas and California represented states where natural gas and renewables both play a significant role in the economy. A new report, Pathways to Decarbonization: Natural Gas and Renewable Energy: Lessons Learned from Energy System Stakeholders, captures key insights and common themes, analytics that complement workshop topics, and pathways for further studies.
Prior gatherings emphasized that natural gas electricity generation enjoys low capital costs and variable fuel costs, whereas renewable energy generators have higher capital costs but generally zero fuel costs, excluding bioenergy. Within the power sector, natural gas and renewable energy industries have typically viewed each other as direct competitors. But an NREL technical report, Natural Gas and the Transformation of the U.S. Energy Sector: Electricity, and a JISEA-authored article in The Electricity Journal, Interactions, Complementarities and Tensions at the Nexus of Natural Gas and Renewable Energy, have scoped out the complementary aspects of energy sources.
In the transportation realm, natural gas is a key input in producing corn-starch-based ethanol fuel. And new transportation infrastructure and technology could enable the use of natural gas and renewable fuels in vehicles. Both energy sources support a future built environment designed for local energy supply and use, including distributed generation and home vehicle fueling.
Making a Strong Business Case
JISEA analysts have delved into the technical intricacies of natural gas and renewables. But they have also explored how the two resources working together may provide a superior value proposition for businesses. In another report, Exploring the Potential Business Case for Synergies between Natural Gas and Renewable Energy, JISEA considered some potential revenue opportunities and concluded that multiple levels of synergy exist between natural gas and renewable energy. Hybrid systems optimizing energy assets are one example, such as "smart" buildings that benefit both from solar photovoltaic systems and natural gas combined heat and power systems. Another example of synergy includes investment portfolios that address business and financial risks through asset diversification.
"To advance a cleaner, decarbonized energy system, we have to look at energy and economic systems in new ways. With this study, JISEA provides a valuable and unique perspective on collaboration rather than competition between natural gas and renewables, and practical insights that can help spur the clean energy economy," said former Colorado governor Bill Ritter, Jr., director of the Center for the New Energy Economy.
Using illustrations to spur thought, discussion, and action, JISEA analyses examined potential business configurations for synergies in five sectors. The first sector was bulk energy, with synergistic opportunities such as joint transmission corridors, colocation, hybrid energy systems, wholesale power markets, increased coordination, and joint financing.
The other four sectors, at the distribution edge of the electricity and natural gas networks, included industrial, residential, commercial, and transportation end uses. In the transportation sector, for example, synergies could build on shared infrastructure of transitioning to alternative fuel vehicles. The infrastructure could receive multiple forms of fuel, including renewables and conventional gas.
Getting Gas Right: Guiding Decisions through Analysis
Decision makers may also want to better understand each technology on its own merits. To this point, several JISEA partners published a Science article, Methane Leaks from North American Natural Gas Systems, that evaluated the total impact of switching from coal to natural gas to generate electricity. The authors concluded that, to a large extent, switching depends on how much methane, a potent greenhouse gas, leaks from natural gas wells during their lifetime. Although current evidence suggests that leakage may be greater than official estimates, NREL co-author Garvin Heath said, "We identified some cause for concern but found that system-wide leakage is unlikely to be large enough to disfavor coal-to-natural gas substitution."
Comparing greenhouse gas emissions from various electricity generating options has been another focus of JISEA analysis. A recent Proceedings of the National Academy of Sciences article provided estimates of life-cycle greenhouse gas emissions from electricity generated from shale gas. The results are similar to those from conventionally produced natural gas, and both energy sources, on average, emit about half the greenhouse gases of coal-powered electricity.
Doug Arent, executive director of JISEA, concludes, "Within this study and our larger body of work focusing on natural gas [and renewables], JISEA offers policymakers and investors a solid analytical foundation for decision making."
—Written by Don Gwinner