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Natural Gas and Renewables, A Partnership With Which Coal Can’t Compete

By Jeffrey Clark
http://eecn.johnshopkins.edu/index.php/2016/11/15/1512/#ixzz4VtCXZCTF

In an ugly weekend for Texas football fans, the Longhorns were defeated by the West Virginia Mountaineers.  Sitting in the stadium, I reflected on our just-ended Presidential election in which energy issues – particularly the promise of a coal renaissance – played a major role.  I was struck by the bigger battle between these two states currently unfolding off the gridiron.  That competition is for the future of American electric power generation and, campaign rhetoric aside, it is one in which natural gas, wind, and solar from states like Texas and Oklahoma will resoundingly defeat the dirtier and increasingly more expensive coal from the mines of states like West Virginia.

Peaking in 2007 when it was used to generate half of the United States’ electric power, coal use has been declining steadily while the use of low-priced natural gas has been on the rise.  By 2015, coal’s share had fallen dramatically, with each fuel then providing about one-third of our nation’s power generation.  In coal country, this shift is often blamed on environmental policies, overregulation, and the growth of renewable energy.  In reality, the causes are more complicated.  While new regulations reducing harmful emissions from coal power plants have increased their cost of operations, the reduction in our use of coal is driven by economics, attributable primarily to the arrival of inexpensive and abundant natural gas.

Fuel switching by power generators is becoming common, with low natural gas prices the primary driving force.  A study by BTU Analytics concluded that natural gas priced near $2.50/MMBtu provides sufficient economic justification for shutting down coal plants and replacing them with newer gas generation.  This switching is also driven by the flexibility of natural gas generation, which allows it to work in concert with other low or no emission generators, especially renewables.

Unlike coal power plants which cannot be efficiently started and stopped, new gas generation units can ramp quickly, meaning that they can serve to balance generation fluctuations from variable generation resources like wind and solar.  A recent study published by the National Bureau of Economic Research found that a 1% rise in fast reacting natural gas generation was associated with a 0.88% rise in renewable generation.  The authors, analyzing data from 26 OECD countries, concluded “that renewables and fast-reacting fossil technologies appear as highly complementary and that they should be jointly installed to meet the goals of cutting emissions and ensuring a stable supply.”

That “highly complementary” relationship is a simple one. Natural gas power plants provide power with reduced emissions, high reliability, and some price volatility; while renewables offer emission-free, low cost, fixed-priced power with variability in generation output.  Married together, they offer high reliability, lower prices, moderate price stability, and reduced emissions.

There is irony in the fact that many of America’s most energy-rich states import the fuels currently essential to powering their lives and economies.  The symbiotic partnership between natural gas and renewables is helping these states, including Texas, break their addiction to imported coal bringing wide-ranging economic benefits including energy independence, consumer savings on power, emissions reductions, rural economic development, and new tax revenue for governments and schools.

President-Elect Donald J. Trump has promised much to energy producers, leaving constituencies in the natural gas and coal producing communities hoping that their fortunes are about to rise.  But, unlike the annual battle that plays out on the football field, the contest between West Virginia coal and Texas natural gas is already in the fourth quarter and fans are walking out of the stadium.  Coal is not clean enough, affordable enough, or flexible enough to compete in the clean energy market of the future.  Instead, the future will be dominated by a new group of states harnessing new technologies, their infinite renewable energy resources, and their vast supplies of cleaner-burning natural gas.

Other Reading:

How Renewables Can Save Natural Gas – Bloomberg

Wind Energy to Power GM’s Texas Assembly Plant

Renewable power will be used to build up to 125,000 trucks a year

Arlington, Texas – General Motors’ Arlington Assembly plant will soon be able to build up to 125,000 trucks a year using wind power from turbines whose blades span the length of a football field in diameter.

Arlington Assembly produces more than 1,200 vehicles daily, including the Chevrolet Suburban and Tahoe; GMC Yukon and Yukon XL; and Cadillac Escalade and Escalade ESV. The 115 million kilowatt hours of renewable energy will be enough to manufacture more than half of the plant’s annual vehicle output.

GM signed a power purchase agreement with EDP Renewables North America, a fully owned subsidiary of EDP Renovaveis, for its first U.S. wind power – 30 MW of energy from the planned 250 MW Hidalgo Wind Farm in Edinburg, Texas. Fifteen of the wind farm’s 261-foot-tall turbines will generate the energy GM will use.

Arlington Assembly expects to start using the clean power during the fourth quarter of 2016, avoiding about $2.8 million in energy costs annually. Over the course of the 14-year deal, GM will avoid more than 1 million metric tons of carbon dioxide emissions – equivalent to the emissions of 112 million gallons of gasoline consumed.

“Our investment is helping accelerate the proliferation of clean energy in Texas and the use of wind as a reliable, renewable source of energy,” said Jim DeLuca, GM executive vice president of Global Manufacturing. “Our sustainable manufacturing mindset benefits the communities in which we operate across the globe.”

“We are pleased to enter into this agreement with General Motors and look forward to providing clean and more economical energy for GM’s Arlington Assembly plant in the coming years,” said EDP Renewables North America CEO Gabriel Alonso.

Renewable energy complements a robust energy efficiency program at the plant. Arlington Assembly recently met the U.S. Environmental Protection Agency’s ENERGY STAR® Challenge for Industry by reducing the energy intensity of its operations by 10 percent in five years – the second time it met the challenge. Arlington Assembly also is investing in a new paint shop that will use half the energy of the system it will replace.

Beginning in the first quarter of 2016, wind energy will help power three GM Mexico facilities. Once on line, the company will exceed its commitment to use 125 MW of renewable energy by 2020. GM’s investments in renewable energy to date have yielded nearly $80 million in savings.

For more information on GM’s environmental commitment, visit its sustainability report and environmental blog.

General Motors Co. (NYSE:GM, TSX: GMM) and its partners produce vehicles in 30 countries, and the company has leadership positions in the world’s largest and fastest-growing automotive markets. GM, its subsidiaries and joint venture entities sell vehicles under the Chevrolet, Cadillac, Baojun, Buick, GMC, Holden, Jiefang, Opel, Vauxhall and Wuling brands. More information on the company and its subsidiaries, including OnStar, a global leader in vehicle safety, security and information services, can be found at http://www.gm.com.

Wind Coalition Formally Responds to Texas Comptroller’s Biased Attack on Wind Energy

On Friday, The Wind Coalition formally responded to Texas Comptroller Susan Combs’ recently released report on wind energy in Texas. Rather than be considered a research piece, her report is better labeled an opinion on wind.  A long-time, outspoken opponent of wind energy development, Susan Combs is taking advantage of her final days in the Comptroller’s office using the power of that agency to push her anti-renewables agenda.  The report is error filled and deliberately distorts the facts to portray wind energy in a negative light.

Fortunately, the public and the press can see through the propaganda and the politicking. Combs’ report is a tired rehash of the arguments made by anti-wind groups and the dirty energy companies that she has so often promoted.

She’s wrong on technology, she’s wrong on subsidies, and she’s wrong on policy.

She’s also wrong on key economic issues affecting Texas, pushing ideas that would keep us hooked on imported coal instead of powering our states with the abundant resources with which we have been blessed.  Texas natural gas, Texas wind, and Texas solar can get the job done.  Texans Powering Texas.

Our response is lengthy but it says what needed to be said in response to her poorly researched, biased attack on a key Texas industry.  Please take time to read and share.

You can read The Wind Coalition’s formal response to the Comptroller here.

Wind Coalition Letter to Susan Combs – September 26, 2014