Rocky Mountain Institute – Natural Gas Plants are Doomed

According to Bloomberg author David Baker Gas Plants Will Get Crushed by Wind, Solar by 2035.  The basis for this claim is a Rocky Mountain Institute (RMI) study.  This post looks at this claim in the context of New York State energy requirements.

Baker’s description of the study “The economics of clean energy portfolios”, states:

“Natural gas-fired power plants, which have crushed the economics of coal, are on the path to being undercut themselves by renewable power and big batteries, a study found.  By 2035, it will be more expensive to run 90% of gas plants being proposed in the U.S. than it will be to build new wind and solar farms equipped with storage systems, according to the report Monday from the Rocky Mountain Institute. It will happen so quickly that gas plants now on the drawing boards will become uneconomical before their owners finish paying for them, the study said.”

The RMI study claims that a “clean energy portfolio” can “provide the same services as power plants, often at net cost savings”.  These portfolios combine the following different resources: energy efficiency, demand flexibility, distributed and utility-scale battery energy storage, and variable renewable energy.  In previous work I have come to the conclusion that for New York State the critical planning scenario will be winter time heating caused high energy demand night-time loads when winds are calm. Keep in mind that during winter it is not only a short-term load concern but the shorter days and generally weaker winds mean that seasonal solar and wind resources are so low that seasonal storage will likely be necessary.  Let’s look at each of these resources in more detail in that context.

According to RMI the energy efficiency resource includes “Physical measures, software controls, or other strategies to reduce the amount of energy required to perform a given service (e.g., insulation and smart thermostats to reduce heating and cooling energy use)”.  Because there are tangible savings many structures already have insulation and smart thermostats.  In fact, I doubt that my home is all that unusual in that since we purchased the home in 1981, we added insulation to the attic a couple of times, insulated the walls, put in double paned insulated windows and doors, and have a smart thermostat.  Anything else we do will cost quite a bit and not get that big an energy reduction.  As a result, I believe that there is a limit to how much energy can be reduced with the proposed energy efficiency resource.  More importantly, the New York Climate Leadership and Community Protection Act has a greenhouse gas emission reduction target that will require electrification of wintertime heating.  RMI cannot claim a reduction in wintertime electric energy when there is a requirement for more winter electric energy use.

The study describes demand flexibility as: “Load controls to enable electricity consumption to shift through time without reducing overall energy use or service quality (e.g., thermal storage in water heater tanks, managed charging of electric vehicles)”.  In general, the theory that load controlling smart meters can make a significant difference is mostly “theory”.  As before in the case of wintertime heating, how much load shifting will be possible?  It is appropriate to point out that the four case studies that “proved” their claims were on the west coast, Florida, mid-Atlantic and in Texas.  None of these regions have winter peaks now and I doubt that even if winter heating is electrified it is unlikely to shift the peak to winter.

The RMI study defines variable renewable energy as: “Behind-the-meter and front-of-the-meter distributed and utility-scale solar photovoltaics (PV) and wind turbines that provide weather-dependent, non-dispatchable energy”.  The resources necessary in this study use a “clean energy portfolio optimizer” that “draws on the other components to define the constraints and objective function of a linear program that finds the lowest-cost portfolio of resources that can provide at least as much monthly energy, capacity during the 50 peak hours, and single-hour ramp capability during the highest period of system-level net-load ramp as the announced natural gas-fired power plant, while staying within resource potential limitations.”  Therein lies a potential fatal flaw for New York.  RMI minimizes the magnitude of peak load impacts with its energy efficiency and demand flexibility resources but averages out renewable energy deficits by using monthly energy and a limited number of peak hours.  The only way to determine if their portfolio will work is by evaluating shorter time periods, at longest an hourly period but even shorter would be better, over years of real-world data.  Based on my analysis of real-world examples I believe it is possible that the worst-case planning scenario will not be the peak load but the minimum renewable energy output.

Finally, the study includes battery energy storage: “Dedicated battery storage assets, either in front of the meter or behind the meter, providing energy balancing and flexibility via controlled charging and discharging.”  RMI published a study in 2015 that describes 13 different services that battery energy storage can provide.  There is a large gap between saying that batteries can provide the services and how they would do that.  Again, an hour-by-hour feasibility needs to be done to determine if this is possible.  In addition, RMI claims more value by stacking these services from “the same device or fleet of services”.  In other words, they claim that one battery system might be used, for example, for frequency regulation, voltage support, and energy storage.  A much more sophisticated study than this overview study is needed to determine whether that is feasible.  Frequency regulation and voltage support might require batteries to be at mid-charge levels to balance peaks and valleys whereas you want your energy storage to be at the maximum charge for use when renewables are not available.

In general, this study chooses how it wants to treat its resources.  There are hopeful assumptions for distributed resources and battery energy storage that have no track record.  There is no consideration of life-cycle resources needed for all the batteries, solar panels and wind turbines. Finally, while the treatment of the technological components necessary to provide the resources are overly optimistic in my opinion, their treatment of costs is much worse.  Both current costs and expected cost expectations in the future are more aspirational than rational.

No doubt this study will be cited as proof that natural gas is not necessary for the future because renewables can do everything they do cheaper.  It would take an electrical engineer with transmission and generation expertise to fully evaluate this study.  However, there are enough broad assertions and convenient assumptions that I do not take this study as definitive evidence that a clean energy portfolio will be able to replace natural gas fired power plants anytime soon in New York.

Author: rogercaiazza

I am a meteorologist (BS and MS degrees), was certified as a consulting meteorologist and have worked in the air quality industry for over 40 years. I author two blogs. Environmental staff in any industry have to be pragmatic balancing risks and benefits and ( reflects that outlook. The second blog addresses the New York State Reforming the Energy Vision initiative ( Any of my comments on the web or posts on my blogs are my opinion only. In no way do they reflect the position of any of my past employers or any company I was associated with.

2 thoughts on “Rocky Mountain Institute – Natural Gas Plants are Doomed”

  1. The greenie expectation that gas plants will be doomed by 2035 by cheaper RE + battery storage is more “betting on the come.” The technology to do this does not exist today. RE is not dispatchable and capacity factors are in the neighborhood of 20-30%. In many parts of the country, during the worst weather, the sun doesn’t shine, the solar panels are covered with snow, and the wind doesn’t blow — for days at a time. Even the supply of natural gas is at risk, since it’s delivered as needed, not stored on site.

    For the foreseeable future, only coal plants with their coal piles on site, and nuclear plants can supply reliable power as long as the transmission and distribution system remains intact. It’s beyond me how anyone can claim RE + batteries are less expensive than gas. With their low capacity factors, solar and wind have to be greatly overbuilt to supply power and charge battery backup at the same time.

    An old, retired EE who spent 33 years in and around generating plants and the transmission system.


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