Skip to main content

US growth in renewables to displace gas

Hydrocarbon Engineering,


The rapid growth of renewable energy in the US will displace some gas from the country’s generation mix, although new emission regulations set to retire coal fired capacity will offset these losses, according to Bernstein Research.

Analysts outlined that ‘facing declining total power demand and surging renewable generation, conventional power generation fell by 245 TWh (6.5%) from 2007 through 2012.’

‘We expect this state mandated growth of renewable generation to continue through 2020, suppressing utility demand for oil and gas’.

Despite reductions in gas prices facilitated by the shale gas boom, renewable energy continues to gain traction in the country’s energy mix.

Bernstein analysts predict that ‘growth in energy will reduce utilities’ use of gas in power generation by 1.2 billion ft3/d  through 2015, and by a further 1.9 billion ft3/d between 2015 and 2020’.

Data from the Energy Information Administration (EIA) indicates that power generators in the US used approximately 727.7 million m3/d in 2012. The combined 87.9 m3/d fall in gas consumption would amount to 12.1% of gas consumption for power generation.

However, ‘more than offsetting the growth of renewable generation, we expect retirements of coal fired power plants to surge through 2015, when the EPA’s Mercury and Air Toxics Standard (MATS) comes into effect, followed by a more gradual decline in coal fired capacity through the end of the decade as coal plants reach their expected retirement age’.

‘This loss in coal fired generation will require a significant increase in the output of the nation’s gas fired generating fleet, and a commensurate rise in utility gas burn. Through 2015, we see coal plant retirements driving an increase in utility gas burn of 3.1 billion ft3/d, followed by a further increase of 1.7 billion ft3/d from 2015 through 2020’.

The consultancy firm has additionally outlined that EPA regulations on carbon dioxide emission are another influential factor boosting gas consumption. ‘In a scenario where the EPA sets a CO2 reduction target of 5% from 2012 levels by 2020 through a cap and trade scheme, we would expect gas consumption to increase by 4 billion ft3/d. A CO2 reduction target of 10% by 2020 could double this figure, causing utility gas burn to increase by 8.1 billion ft3/d.'

Edited from various sources by Emma McAleavey.

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/14082013/gas_to_lose_out_to_renewables559/


 

Embed article link: (copy the HTML code below):