Even with the rapid rise of renewable generation sources, it is apparent that natural gas will be a key component of grid stability and reliability for many years to come.
A Bridge Fuel, But for How Long?
At one time or another, many of us have heard natural gas described as a bridge fuel that will enable the transition toward a 100% decarbonized grid. However, there is a wide range of opinions on the exact definition of decarbonization, and when that 100% goal will be achieved.
There is no disputing the importance of renewable energy in our future. As more and more utilities define their own decarbonization goals, energy storage technologies continue advancing, and supply chains stabilize, the share of renewable energy on the grid will grow at a quickening pace. However, the transition cannot happen overnight. There will be a continued need for gas generation capacity for several years, if not decades. If natural gas is a bridge fuel, then the following three features are pillars supporting that bridge.
The grid is rapidly transitioning to low-carbon or no-carbon generation as coal-fired power plants are retired. Between 2010 and 2022, coal fell from being the dominant U.S. energy source, supplying about 40% of the nation’s power, to around 20% today. While roughly half of that lost capacity has been replaced by renewable generation, the remaining demand (plus recent load growth), has been met by natural gas. As of 2022, gas has replaced coal as the primary resource for electric generation, supplying nearly 40% of our nation’s power today.
With a forecasted load growth through 2050, grid stability and quality of power are as important as ever. Because of the basic physics of transmitting and distributing alternating current (AC) power, rapid swings in grid voltage create a need to either generate or absorb reactive power. One way to address this need is through utilization of synchronous condensers.
Synchronous condensers can resolve power quality issues by improving the power factor needed for stable power flow — in other words, keeping alternating current and voltage waves properly synced on the grid.
Synchronous condensers are often associated with retired coal units, where the generator is decoupled from the old steam turbine and modified for this new functionality. Today however, synchronous condensing is also a standard option available on newer aeroderivative gas turbines, a solution many utilities are choosing on new projects. Such projects are not in competition with renewables, but rather enable their continued growth by providing reliability and stability to the grid in addition to reserve capacity.
Capacity and reliability are underlying themes in recent resource plans of many major utilities. While most headlines revolve around decarbonization and increased renewable capacity, many utilities are simultaneously developing new gas generation projects — including simple-cycle, combined-cycle, and reciprocating internal combustion engine (RICE) plants.
With coal-fired plants providing only half the capacity that they were 12 years ago — and further steep declines forecasted over the next few years — the need for affordable and reliable baseload capacity is unabated. As utilities and transmission authorities face the need to replace hundreds of gigawatts of baseload capacity across the country, more attention is being directed to gas sources. To deal with increasing challenges in obtaining permits for new units, many utilities are looking to adapt existing assets through coal-to-gas conversions and repowers.
Regulations may allow utilities to modify or replace existing coal assets under condition that such projects “net out” — providing an overall reduction in the amount of emissions where a coal unit previously operated. An emissions netting analyses must be performed to quantify the forecasted emissions, past actual emissions and the net emissions reductions that can be expected.
These reductions can be substantial. Burner technology available for emissions control on large frame gas turbines can reduce nitrogen oxides (NOx) to as little as 9 parts per million in a simple-cycle configuration, with further reductions to 2 parts per million when coupled with selective catalytic reduction technology. Similarly, advances in turbine design have led to increased efficiencies in amounts of power produced per British thermal units (Btus) of fuel consumed.
In addition to coal plant adaptation, some generation providers are looking to boost additional capacity to existing gas units. As one example, heat recovery steam generators (HRSGs) may be retrofitted onto existing simple-cycle units, effectively converting a simple-cycle plant into a combined-cycle unit and delivering additional power without increasing the carbon footprint.
Beyond adaptation of old assets, new gas projects also have an increasing number of options to reduce carbon emissions. Turbine manufacturers now tout compatibility with alternative fuels such as biodiesel and hydrogen blending. While not yet commonplace, carbon capture and sequestration may soon be so. Owners and developers are increasingly planning for additional footprint to be available for future retrofits that would add carbon capture technologies.
As renewables increase market share and account for a greater percentage of power on the grid, intermittency has also become a challenge. Because solar and wind generating output periods can be unpredictable due to time of day, cloud cover, weather patterns and other factors, dependable capacity is needed to provide backup, often at a moment’s notice.
Modern simple-cycle gas turbines can reach full output in as little as 10 minutes and are well suited for this type of load chasing. A review of gas turbine market data shows a surge of new simple-cycle facilities to be under construction currently and extending through the middle 2020s. Even combined-cycle facilities, which have historically run at baseload due to their high efficiencies, are now being cycled more and more to respond to load fluctuations.
In 2019, Burns & McDonnell conducted a survey of customers with recently completed RICE facilities to gauge utilization. The survey found that, on average, owners were operating their facilities at nearly twice the run-hours originally planned. In 2022, we revisited the same survey respondents and found that usage was even higher, with most facilities running almost three times the run-hours originally planned (between 3,500 and 4,000 hours per year).
Even with higher natural gas prices in 2022, the increased utilization of existing plants, coupled with construction of several new simple-cycle projects across the country, highlights the continued need for dispatchable generation.
Bridge to the Future
Just what will a carbon-free future look like? The answer is constantly evolving, but in the meantime, odds are high that gas will help bridge to that future. The trend toward electrification of the transportation sector and other major sectors of the economy will further increase the need for new capacity and grid stability.
No matter what gains renewables eventually attain in the resource mix, there will always be a need for a flexible resource that can be dispatched quickly and reliably. Until utility-scale storage infrastructure can be built out to cover the intermittency of renewables and sustain peak demand, there will continue to be a need for gas generation. And while there has been significant growth in grid-scale storage capacity in recent years, it’s clear that a broad portfolio of resources is needed for the foreseeable future.
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