Powerful Living By Paul Wesslund How natural gas caught
coal as an electricity fuel And how that changes the world of energy
E
nergy made history last April when more electricity in the U.S. was generated with natural gas than with coal. It lasted only a month, but it signals huge changes that are making the landscape of power production a lot more complicated.
In April, natural gas fueled 32 percent of the electricity in the U.S., com- pared with 30 percent for coal. In one way, that was a fl uke, since electricity use typically declines in the spring and fall and coal plants take advantage of those times to schedule maintenance. Sure enough, by May, coal was back in fi rst place by 33 percent compared with 31 percent for natural gas. But recent trends will soon make the April ranking the new normal. As recently as 2005, coal sat way on top, generating more than half of all the electricity in the U.S. Natural gas provided just 19 percent. There’s no single reason for this dramatic reversal. For one, utilities retire their coal generating capacity at the rate of more than 3 percent a year since 2012, according to the U.S. Energy Information Administration (EIA). EIA estimates the pace of coal plant closures could continue through 2020. Another reason for the trend concerns coal’s effect on the environment and the resulting government regulation. The much-publicized natural gas drilling boom of the past seven years is also producing plentiful supplies of the alternative to coal at relatively low costs. Another key reason for this trend is that natural gas generation tech- nology is cheaper and easier to build than coal plants. To better understand the trends, let’s go back to 1985, when coal fueled 57 percent of the nation’s electricity, and natural gas 12 percent. Natural gas, however, was nearing the home stretch of a decade of deregulation activity— prices fell from $3.97 for a thousand cubic feet in 1983, to $1.68 by 1994. Electric utilities started taking advantage of those prices, as well as the smaller-scale benefi ts of natural gas-powered turbines. The turbines look about the size and shape of a jet engine, and are generally used for peaking power. That is, when people use the most electricity, like during the cold of winter or heat of summer, natural gas turbines can power up in a few minutes. That quickly available capacity can avoid having to construct an additional large and expensive coal plant that might only occasionally be needed. Another technology began developing in the 1960s—“combined-cycle” plants that burn natural gas to generate electricity, then capture the exhaust to produce more electricity, making them more effi cient. Today, com- bined-cycle plants generate about 25 percent of our electricity, and that’s growing at about 3 percent a year. Environmental rules make that cheaper technology even more attractive. Emission control has greatly increased the costs of building and running coal plants. The search for reductions in emissions of the greenhouse gas carbon dioxide, which is blamed for climate change, puts even more pressure on coal. Natural gas emits about half the greenhouse gases of coal. The Environmental Protection Agency’s Clean Power Plan to reduce green- house gas emissions, announced in August, calls for 27 percent of the na- tion’s electricity to be generated from coal by the year 2030, and 33 percent by natural gas. Under that plan, renewable energy would rise from 12 percent
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now, to 21 percent. It all adds up to continued declines in coal as an electricity fuel, says Mike
Casper, senior manager, generation and fuels for the National Rural Electric Cooperative Association. He says, “There are no electric co-ops that I’m aware of that are looking at coal to build capacity over the next 10 years.” This shift to natural gas, however, brings its own challenges, says Casper. Among those challenges:
✓ Natural gas will continue to face added emission regulations ✓ The Interstate Natural Gas Association of America estimates 850
miles a year of new gas transmission pipeline could be needed between now and 2035 in order to transport new production to demand. Factors in that demand include the expansion of new gas-fi red generation ✓ More effort and cost will go into coordinating operations with the
increased use of intermittent resources such as solar and wind power; and ✓ New transmission lines will be required to carry electricity from new
resources—including new natural gas generation and new solar and wind farms—to where people live
“It’s all intertwined,” says Casper. “There are a lot of factors that need to be considered, including time, planning and costs to appropriately integrate new generation sources.”
Paul Wesslund writes on cooperative issues for the National Rural Electric Cooperative Association, the Arlington, Va.-based service arm of the nation’s 900-plus consumer-owned, not-for-profi t electric cooperatives.
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