Can Renewable Energy Survive the Natural Gas Boom?

Forests of towering, power-generating wind turbines. Oceans of gleaming solar panels stretching across a desert. Fields of ripening agricultural crops ready to be converted into high-tech biofuels.renewableenergy

While the images are still fresh in our minds, the focus on renewable energy (at least in the US) certainly seems to have dropped off the radar, leading many to wonder if the resounding boom heard in the natural gas industry wasn’t actually the imploding of renewable energy.

So, is it true? Has the promise of abundant, low-cost natural gas sounded the death knoll for investments in solar, wind and biofuels? The answer seems to be “it depends on where you are”, and “when”. The “where you are” is succinctly summed up as North America and “elsewhere”. $4 natural gas in North America has undoubtedly shifted focus, arguably both politically and commercially, away from investments in renewables, while $12 natural gas in Europe is still continuing to drive development in solar, wind, nuclear and biofuels. The “when” appears to be driven by how long natural gas will be used to “bridge to the future” as commonly quoted by US policy makers.

However, some industry pundits are now postulating that an abundance of natural in North America may actually be the foundation upon which the future of renewable energy will be built.

The theory goes like this: Renewables like wind and solar are intermittent and require some type of on-demand backup that can quickly come online and go offline as needed. The industry terminology for this type of resource is called a “peaker plant”, and those generation plants typically run on natural gas. Thus, natural gas and renewables will form a symbiotic relationship, each helping the other to create a flexible, hybrid generation resource.

This theory was presented in a recent report from Citigroup, and went so far to say that “the requirement for ‘peaking power’ rises as renewable penetration increases,” so “gas-fired power is not only compatible with renewables, it is in many ways essential for its large-scale adoption.”

Whether or not this theory will prove to be valid, another key element in a potential “return to renewables” focus is the debated trend to pursue the exportation of natural gas outside of the US. The opposite sides of the coin on this debate revolve around how this will affect the price of natural gas within the US. If, as the critics claim, it significantly raises the price of US natural gas, it could actually drive a renewed push to renewables, such as is happening in Europe.

So, the cards are on the table: Current US policymakers seem to have abandoned a rigorous focus on renewables in concordance with their policy of using natural gas as the “bridge to the future” (assuming that renewables are the future), and a dozen or more US companies are poised to exploit their abundance of cheap, domestic US natural gas by exporting it in the form of LNG. How this eventually plays out for the global future of renewables will determine if the ”bridge to the future” is crossing a river, or an ocean.

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