The Next Energy Battle: Renewables vs. Natural Gas

Source: By Ivan Penn, New York Times • Posted: Monday, July 6, 2020

As coal declines and wind and solar energy rise, some are pushing to limit the use of natural gas, but utilities say they are not ready to do so.

Power sources at Dominion Energy in Remington, Va., include natural gas, a diesel backup tank and solar panels in the field.
Ting Shen for The New York Times

Power sources at Dominion Energy in Remington, Va., include natural gas, a diesel backup tank and solar panels in the field.Ting Shen for The New York Times

Dominion Energy, one of the nation’s largest utilities, in late June erected wind turbines off the Virginia coast — only the second such installation in the United States — as part of a big bet on renewable energy.

The company is also planning to build new power plants that burn natural gas.

Utilities around the country are promoting their growing use of renewable energy like hydroelectric dams, wind turbines and solar panels, which collectively provided more power than coal-fired power plants for the first time last year. But even as they add more green sources of power, the industry remains deeply dependent on natural gas, a fossil fuel that emits greenhouse gases and is likely to remain a cornerstone of the electric grid for years or even decades.

Utilities maintain that they need to keep using natural gas because the wind and the sun are too unreliable. They are also reluctant to invest in energy storage, arguing that it would cost too much to buy batteries that can power the grid when there isn’t enough sunlight or wind.

“We’ve got to have a resource that has an ‘on’ and ‘off’ switch,” said Katharine Bond, vice president for public policy and state affairs at Dominion.

For years, environmental activists and liberal policymakers fought to force utilities to reduce coal use to curb emissions and climate change. As the use of coal fades, the battle lines are rapidly shifting, with the proponents of a carbon-free grid facing off against those who champion natural gas, an abundant fuel that produces about half the greenhouse gas emissions that burning coal does.

Coal plants supply less than 20 percent of the country’s electricity, down from about half a decade ago. Over that same time, the share from natural gas has doubled to about 40 percent. Renewable energy has also more than doubled to about 20 percent, and nuclear plants have been relatively steady at around 20 percent.

A technician does maintenance work on a Dominion gas turbine in Remington, Va.
Ting Shen for The New York Times

Experts argue that the surge in wind and solar energy, while impressive, is not reducing emissions quickly enough to avert the worst effects of climate change, including more intense heat waves and storms. They argue that utilities urgently need to reduce the use of natural gas, too.

“Replacing coal with gas doesn’t solve our public health problem,” said Mary Anne Hitt, national director of campaigns at the Sierra Club.

Proponents of renewable energy note that solar panels are increasingly the cheapest source of electricity. Solar panels can deliver power to 650 homes for one hour — one megawatt-hour in industry jargon — at $31 to $111 a megawatt-hour, according to Lazard, the investment firm. By comparison, natural gas peaking plants, which utilities can turn on and off quickly to meet surging demand, deliver power at $122 to $162 a megawatt-hour.

A report in June by the University of California, Berkeley, concluded that by 2035, the U.S. electric grid could get 90 percent of its powerwithout greenhouse gas emissions while lowering electricity rates. To do that, the country would have to increase its use of renewables, energy storage and transmission lines while closing all coal plants and slashing natural gas use by 70 percent.

Some lawmakers argue that utilities are wasting billions of dollars by investing in natural gas plants that will have to be shut down before their useful lives end.

“The urgent need to address the climate crisis means we can’t make reckless investments now that will have to be paid off for decades,” said Senator Edward J. Markey, a Massachusetts Democrat and one of the authors of the legislation known as the Green New Deal. “We have to consider clean options, which, fortunately for consumers, are also cost-effective.”

Some experts say they hope that the country can move away from fossil fuels in part because the use of renewables has grown even as the Trump administration has repealed environmental regulations and pulled the United States out of the Paris climate agreement.

“Fighting the transition is not going to stop the transition,” Dennis Wamsted, an analyst for the Institute for Energy Economics and Financial Analysis, said. “Economically, it will happen inevitably.”

Utility executives acknowledge that renewable energy will continue to grow. But many dismiss the idea that wind turbines, solar panels and batteries can replace natural gas plants.

Great River Energy, a Minnesota utility owned by its customers, recently gained national attention when it said it would phase out coal use. The cooperative plans to shut down a 40-year-old plant in Underwood, N.D., called Coal Creek after failing to sell it.

“The situation that led to our decision was based purely on the economics,” said David Saggau, president and chief executive of Great River Energy. “It has been tougher and tougher for some of our legacy facilities to compete in the marketplace.”

Dan Koeck for The New York Times

The Underwood plant and a nearby coal mine that supplies it employ about 660 people, many of whom will probably have to leave the area to find new jobs, said Underwood’s mayor, Leon Weisenburger Jr. “It’s going to hurt those communities severely,” he said. “Some won’t survive.”

But while Great River plans to increase its reliance on wind turbines, it is not giving up fossil fuels and will convert its other coal-fired power plant to natural gas.

Another large utility, the Alabama Power Company, won approval in June to replace some of its coal-fired plants with the equivalent of two large natural gas facilities, even as its parent, the Southern Company, has proposed to make its entire system carbon neutral by 2050. The utility and regulators gave little consideration to renewables and batteries.

Even where elected leaders have committed to eliminating emissions, utilities have found it difficult to rid themselves of fossil fuels.

Mayor Eric Garcetti, for example, wants Los Angeles to have an all-renewable electric grid by 2045. But the city-owned utility, the Department of Water and Power, still gets about 18 percent of its electricity from a coal-fired plant in Utah and about 30 percent from natural gas plants.

Dan Koeck for The New York Times

It will take five years for the city to end its reliance on coal and much longer to wean it from natural gas. Officials said they would like to move more quickly, but Los Angeles owns some power plants with neighboring municipal utilities and has had to resolve labor contracts, plan the use of transmission lines and line up other energy sources.

Dominion Energy, with more than seven million customers and operations in 20 states, said it had high expectations for offshore wind farms, which have been widely used in Europe for years. The company is erecting two wind turbines off Virginia Beach this year — with blades as high as 620 feet above sea level — as a test for the installation of nearly 200 turbines over the next six years.

While environmental groups have long criticized Dominion’s record, executives say they are committed to a greener grid and are planning to shut two coal-fired plants in Virginia in 2024 before either turns 30. Last year, the company closed six coal plants and converted five to natural gas, a fuel it views as complementary to renewables.

Investors, customers and lawmakers are demanding electricity from cleaner sources. In April, Gov. Ralph Northam of Virginia signed a bill requiring almost all coal-fired power plants to close by 2024 and the state to become a carbon-free electricity producer by 2050.

On Sunday, Dominion and Duke Energy announced that they had canceled the Atlantic Coast Pipeline, which would have crossed the Appalachian Trail, after legal challenges drove up the project’s cost to $8 billion from about $4.5 billion. The two utilities said they had proposed the project “in response to a lack of energy supply and delivery diversification for millions of families, businesses, schools, and national defense installations across North Carolina and Virginia.”

At the same time, Dominion announced a separate deal to sell all of its gas transmission and storage to an affiliate of Warren E. Buffett’s Berkshire Hathaway Energy.

From Dominion’s perspective, its growing focus on clean energy should not have surprised anyone because the utility said it was a pioneer in the use of technologies like energy storage. In the 1980s, it built a power plant near Lexington, Va., that can use excess electricity to pump water to a reservoir at a higher elevation. When power is needed, the company can release water to a lower reservoir. The company said the six-turbine facility was the largest of its kind, able to power up to 750,000 homes and less expensive to operate than a bank of lithium-ion batteries.

Executives said such plants could be built only in certain areas, so Dominion is also investing in batteries. But the company said it had concluded that the current generation of batteries was still too expensive and could generally store only up to five hours of power for the grid.

“Natural gas remains the only resource that allows us to ratchet up and down,” said Ms. Bond, the Dominion policy executive. “We’re absolutely committed to investments in renewable energy — gigawatts’ worth of wind, gigawatts’ worth of solar. We’re also committed to keeping the lights on for our customers.”

Dan Koeck for The New York Times