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1/ Electric utilities are planning to build 235 new natural gas power plants in the next 18 years. This creates huge stranded asset risks, exacerbates climate risks, and portends electricity cost increases. A thread https://www.nytimes.com/2020/11/12/opinion/solar-wind-natural-gas-climate-change.html?smid=tw-share
2/ Utilities make a few arguments about the need for new gas plants that are increasingly falling on their faces. Chief among these is that we need gas for reliability. So let's start there.
3/ There are two perspectives here: the system-wide look, and the individual plant look. Peaking under the hood of either tends to reveal that utilities are overselling the need for new gas, which sometimes comes with parallel investments in long-lived, pricey gas pipes.
4/ From the systems view - the #2035report by @UCBerkeley and @GridLabEnergy shows we can match supply and demand in every hour with 90% clean energy & 150 GW of batteries, at lower energy cost. We need existing gas for this, but we don't need more. http://2035report.com
5/ Another important study from @VibrantCE finds the entire Eastern Interconnection (EIC) can decarbonize by 95% by 2050, and save $100 billion - clean, reliable, affordable. Utilities could learn a lot from VCE's integration of wind/solar modeling. https://www.vibrantcleanenergy.com/media/reports/
6/ Next argument - my gas plant is a special snowflake and I need it in a specific location. This is increasingly falling by the wayside as well. Look no further than @GridLabEnergy work in New Mexico on San Juan Replacement: https://www.linkedin.com/posts/gridlab-energy_new-mexico-approves-100-renewables-storage-activity-6696464640643264513-JPhm
7/ This shows portfolios of clean energy resources - in this case DR, EE, solar, wind, batteries, and regional trading - can provide the same services as gas plants at the same cost TODAY. Batteries, solar, and wind are only going to get cheaper people.
8/ Note that @GridLabEnergy and savvy advocates like @SierraClub has had similar results in Indiana, Arizona, Virginia, and North Carolina. If given the same tools as utilities, we see time and time again that an imaginative, innovative approach can avoid new gas.
8/ so where are the gas plants? Most of the gas under construction and planned additions by 2022 is in competitive markets - @pjminterconnect and @ERCOT are the largest. But many planned additions are already falling out of the queue, per @RMI_Electricity: https://rmi.org/clean-energy-is-canceling-gas-plants/
9/ past 2023, nearly all of the gas capacity proposed is in monopoly markets. @DukeEnergy, TVA, @Entergy and @DominionEnergy are among the largest. These happen to be in places where cheap solar and batteries are already available - what gives?!?
10/ Reason 1: monopoly incentives. These utilities recover costs as a matter of regulatory oversight, not competition. And when they recover, that includes a hefty ROE, which has not fallen as fast as, e.g. interest rates. In short, more capex = higher earnings.
11/ Reason 2: not playing well with others. TVA/Duke are in the Southeast, where transmission is balkanized. I have to pay to wheel power from a distance., so it makes local gas seem cheaper than it is. Entergy is in MISO-south, which has been opposing North-south transmission.
12/ as an aside, @VibrantCE and @EnergyInnovLLC modeled the clean energy and financial benefits of competition in the Southeast, finding $384 billion savings and over 120 GW of clean resource investment from a SE wholesale market https://energyinnovation.org/publication/economic-and-clean-energy-benefits-of-establishing-a-southeast-u-s-competitive-wholesale-electricity-market/
13/ Reason 3: regulatory capture. I don't mean bribes like the racketeering in OH/IL (though that's an issue). I mean it like Scott Hempling means it: "Regulatory capture is a surplus of passivity and reactivity, and a deficit of curiosity and creativity." https://www.scotthemplinglaw.com/essays/regulatory-captureI
14/ So please read my lips: NO NEW GAS PLANTS! They only slow the energy transition when we need speed more than ever. They'll cost unnecessary money, jobs, and lives. We have the technology, so let's stop building a bridge to nowhere.
