The number one energy source in the United States is still natural gas. But the same companies that own thermal power plants are instead investing in solar power plants and energy storage batteries. This does not mean that fossil fuels will disappear – but they are already losing their dominance, WSJ states.
Decades ago, natural gas supplanted coal and came in first, but now it can be replaced by more economical solar and wind-powered batteries.
38% of electricity in the United States is produced by gas combustion. At the same time, wind and solar generators are gaining more and more share.
Battery storage is now less than 1% of the US electricity market. However, the combination of better and better batteries and renewable energy can undermine the monopoly of gas-fired CHPs.
Therefore, gas-fired CHPs can become such assets that have “retired” without paying for themselves because they have been invested, hoping that they will be profitable for many years to come. Therefore the payback period is also long.
Renewable energy and more ergonomic batteries have become increasingly competitive in recent years and no longer require subsidies or incentives from the state. And the state, however, will continue tax credits.
Vistra Corp. owns 36 natural-gas power plants, one of America’s largest fleets. It doesn’t plan to buy or build any more.
Instead, Vistra intends to invest more than $1 billion in solar farms and battery storage units in Texas and California as it tries to transform its business to survive in an electricity industry being reshaped by new technology.
“I’m hellbent on not becoming the next Blockbuster Video,” said Vistra Chief Executive Curt Morgan. “I’m not going to sit back and watch this legacy business dwindle and not participate.”
A decade ago, natural gas displaced coal as America’s top electric power source, as fracking unlocked cheap quantities of the fuel. Now, natural gas finds itself threatened with the same kind of disruption in quick succession, only this time from cost-effective batteries charged with wind and solar energy.
Natural-gas-fired electricity represented 38% of U.S. generation in 2019, according to the U.S. Energy Information Administration, or EIA. It supplies round-the-clock electricity and bursts during peak demand. Wind and solar generators have gained substantial market share. As battery costs fall, batteries paired with that green power begin to step into those roles by storing inexpensive green energy and discharging it after the sun falls or the wind dies.