Natural gas to depose coal for electricity by 2025. Will it also slow renewables?

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By Jesse Berst

Anyone involved in long-term grid planning should prepare for lots of natural gas generation. And perhaps for less renewables than expected. Coal has long been the leading fuel for generating electricity, but that will change by 2025, according to forecasts from Exxon Mobil as reported in the Wall Street Journal.

The study forecasts that coal will continue to grow (primarily in China and India) but that natural gas will grow even faster.

The discovery of major reserves and the drop in natural gas prices is also affecting thoughts about renewable energy. Natural gas is cleaner that other fossil fuels and, these days, it is quite inexpensive, making it harder for renewables to compete on cost. Natural gas is more "grid-friendly" than renewables, which require a smarter grid to deal with their constant fluctuations.

Right on cue, New Jersey Governor Chris Christie approved an "energy master plan" for the state that reduces the use of solar and wind in favor of natural gas (and nuclear). A 2008 plan called for 30% renewables by 2020. The new plan scales that back to 22.4%.

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Jesse Berst is the founder and chief analyst of Smart Grid News.com. He consults to smart grid companies seeking market entry advice and M&A advisory. A frequent keynoter at industry events in the US and abroad, he also serves on the Advisory Council of Pacific Northwest National Laboratory's Energy & Environment directorate.

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