Study Shows Renewables Are Kicking Natural Gas To the Curb

Study Shows Renewables Are Kicking Natural Gas To the Curb

An anonymous reader quotes a report from CleanTechnica: After analyzing the most recent data from two of America’s largest electricity markets — ERCOT in Texas and PJM in the Northeast — the Rocky Mountain Institute has come to a startling conclusion. Renewables are muscling in on natural gas as the preferred choice for new electricity generation. In fact, according to RMI, what happened to coal is now happening to gas. What is needed, the organization argues, is a move away from the monopoly markets that have been the norm in the utility industry for more than 100 years and toward more open competition. Because when renewables compete head to head with thermal generation, they win hands down 95% of the time.

The data doesn’t lie. RMI looked at the interconnection queues for both ERCOT and PJM and found over the past two years there has been a dramatic shift away from building new gas fired generating plants and toward more renewable energy projects. Interconnection queues track new generation projects proposed to be added to regional grid. That information provides a leading indicator of market trends for new power plants. Not all projects in these queues are ultimately built, but the mix of resources in the queue represents the investments the market is prioritizing, according to RMI. […] RMI finds that since 2018, the queue for clean energy projects has more than doubled while the queue for gas projects has been cut in half. In all, more than $30 billion worth of gas projects have been canceled or abandoned. Currently, the capacity of wind, solar, and storage projects slated for construction in ERCOT and PJM is ten times greater than for new gas projects. “Though COVID-19 may be contributing to some recent decline in planned gas additions, it’s not the only driver,” says RMI. “The trend has been building for years and investors more broadly are now waking up to the implications. For example, just five years ago in ERCOT, the interconnection queue contained an even split between proposed gas and renewables generation capacity. However, gas capacity in the queue started falling steadily in 2015, well before the COVID-19 pandemic and associated economic downturn. Meanwhile, renewable energy and storage projects in the queue have continued to grow even during the pandemic.”

“Therefore, it is likely that a more fundamental driver is at play — raw economics, driven by the continually falling costs of clean energy and the associated risks of investment in new gas-fired capacity.”

Read more of this story at Slashdot.

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