The role of natural gas in the transition to cleaner, more reliable power systems in the United States is critical, according to a recent report. As renewable energy sources, particularly solar and wind, become more prevalent in the grid, they introduce the challenge of intermittent power generation, which poses risks to meeting growing power demands. To ensure grid reliability, a fully "dispatchable" backup energy supply is necessary. Natural gas, due to its scalability and low carbon footprint, is seen as a viable and cost-effective solution for this purpose.
The report notes that natural gas has played a pivotal role in decarbonizing the US power sector over the last decade. Between 2005 and 2022, the use of natural gas in power generation nearly tripled, while coal use dropped by about 55%. This transition led to a significant reduction in energy-related CO2 emissions, accounting for more than 10% of total US greenhouse gas emissions in 2021. The shift from coal to natural gas has been a key factor in the US reducing its energy-related CO2 emissions by about 18% over the same period.
However, the report emphasizes that the current natural gas infrastructure is not equipped to handle the high volumes of gas needed on peak-demand days when renewable energy generation is low. Infrastructure upgrades and new market mechanisms are expected to be necessary to position mainstream gas operators to meet the increased demand.
Despite the challenges, natural gas continues to offer a significant role in decarbonization efforts alongside other power sources. It supports coal-to-gas switching, the implementation of carbon capture and storage (CCS) solutions, blue hydrogen production, and the acceleration of intermittent renewables. Moreover, US natural gas exports contribute to global energy security and decarbonization efforts, particularly in regions transitioning from coal to gas, such as Europe.
The electrification of energy demand and the growth of renewables are major trends shaping the energy transition. The increasing electrification of end-use energy needs places greater importance on reliable power supply to meet growing demands. For instance, the electrification of transportation, heating, and industrial processes is underway, requiring a clean power supply. To achieve US decarbonization goals, this demand must be met with renewable energy sources complemented by other low-emission energy sources like nuclear, hydroelectric power, and gas-fired power generation with CCS.
The role of natural gas in this context is multifaceted. In a "less-renewables" scenario, natural gas may be necessary to meet higher electricity demands as renewables expand. Conversely, in a "more-renewables" scenario, natural gas can provide affordable, dispatchable power to balance the variability of renewable energy generation. However, decarbonizing the grid with a large share of renewables introduces reliability challenges due to the intermittent nature of solar and wind power. Solutions such as long-duration energy storage (LDES) could be effective in some geographies, but natural gas remains a consistently reliable and cost-effective option, even when accounting for carbon costs.
In conclusion, while the transition to cleaner, more reliable power systems presents numerous challenges, natural gas plays a crucial role in supporting this transformation. Infrastructure improvements, innovative market mechanisms, and strategic energy policies will be essential to fully harness the potential of natural gas in the evolving energy landscape.
