West power grid shifts from coal
How we get electricity in the West is changing rapidly. And we can see this change in data about power plants and the grid. The major trends:
• Natural gas is ascendant: The U.S. Energy Information Administration projects 2016 to be the biggest year ever for natural gas-fired power plants.
• Coal is in decline. Production has plummeted, and last year natural gas overtook coal as the country’s top electricity source for the first time ever.
• The vast majority of planned power additions are wind or solar.
To understand what these changes mean for the West and Inside Energy’s focus states of Colorado, Wyoming and North Dakota, Inside Energy talked to grid experts from academia, industry and government. Here’s what they had to say:
The amount of natural gas we use to generate electricity has been creeping up for years. The Energy Information Administration predicts that in 2016, it will peak before leveling off a bit in 2017. Why? In the wake of the U.S. shale boom and the surge in drilling, natural gas prices have been low. This means it’s cheaper to make electricity from natural gas than from coal.
The electricity market is fierce. Parker Littlehale, an analyst with IHS, said that when it comes to power markets, “You have kind of a rivalry between fuel sources.”
Coal, nuclear, natural gas and renewables all compete for a share of the electricity market. And natural gas is caught in the middle of this rivalry: “On one hand it’s losing market share to renewables, but on the other hand it’s gaining market share from coal-fired generation,” said Littlehale.
The West is the only region where EIA predicts natural gas use will drop from 2015 to 2016. That’s thanks to California, where we can already see natural gas use is down this year.
California has been experiencing a major drought, which has limited the ability of dams to generate hydropower. Natural gas picked up a lot of the slack. But as California slowly climbs out of drought, hydropower is coming back online and natural gas use is dropping.
In our focus states, looking at electricity generation for 2016 year-to-date:
• Colorado has used 26 percent more natural gas than last year.
• Wyoming has used 20 percent more natural gas than last year.
• North Dakota has used 67 percent more natural gas than last year.
North Dakota’s natural gas-fired power growth is the second fastest in the country, behind only South Dakota.
The way we use natural gas is changing — and renewables have a lot to do with that.
As we bring more renewables onto the grid, we have to worry about what happens when the sun stops shining or the wind stops blowing. Remember, the grid must always be in balance — at any given moment, the power coming in has to equal the power we’re drawing off.
Ian Lange, an economist at the Colorado School of Mines, says the intermittency of wind and solar means that often, “you need to hurry up and get something generating something right away, and that’s what natural gas can do very well.”
Natural gas-fired power plants can start and stop quickly, much quicker than coal or nuclear power plants. So they are a good complement to the slew of renewables that are coming onto the grid.
As our electricity mix continues to change, renewables are going to take a growing role. Many states now have renewable energy standards — in Colorado the goal is to generate 30 percent of electricity from renewables by 2020. In addition, the Clean Power Plan, currently stuck in litigation, outlines state-by-state goals for reducing carbon emissions. As a result, most of the planned additions to our grid are wind or solar:
• In Colorado, 92 percent of planned new generation is wind or solar.
• In Wyoming, 81 percent of planned new generation is wind.
• In North Dakota, 83 percent of planned new generation is wind.
Tyler Hodge, an analyst with the EIA, said we’re seeing “a big buildout of large-scale renewables plants. Not just wind, but also utility scale solar.” Plus, more distributed generation is coming into the mix — think rooftop solar or tiny wind. (A sign that the times are changing: Historically, the EIA didn’t even collect data on distributed generation. Now it does.)
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