Europe, California and Natural Gas’ Role in Future Energy Mix

Mark Green
Posted September 15, 2021

We’ve long made the point that natural gas is the essential partner for the growth of wind and solar energy (see here, here and here). You simply must have a partnering energy source, in sufficient quantity, to fuel power generation and maintain reliability when the wind doesn’t blow and/or the sun doesn’t shine.

Just ask Europe and California. Both are experiencing conditions that make this case.

The two also underscore the flaw in policy proposals that exclude natural gas from the future energy mix – as does the Clean Electricity Performance Program (CEPP) now being debated in Congress.

Let’s first look at Europe. The Wall Street Journal reports that a dearth of North Sea wind, forcing a sudden slowdown in wind-driven electricity generation, impacted regional energy markets. And how. Peaking electricity prices in the United Kingdom (UK) more than doubled this month and were nearly seven times as high at the same point last year. France, the Netherlands and Germany saw jumps in their power markets, too. Economist Stefan Konstantinov told the Journal:

“It took a lot of people by surprise. If this were to happen in winter when we’ve got significantly higher demand, then that presents a real issue for system stability.”

The scenario shouldn’t have been a surprise. Wind is by nature intermittent – even in windy places. While wind has furnished inexpensive power to Europe, this month it has been quiet. UK wind farms, with a full capacity of 24 gigawatts, produced less than one gigawatt on some days.

To be clear, Europe’s problem isn’t an absence of natural gas but not enough of it when wind was insufficient. Natural gas prices already were elevated by the pandemic recovery and a lack of fuel in storage, the Journal reports. For the region’s energy markets, the overall situation is precarious with winter approaching.

That’s not a knock on wind energy but, rather, a reminder that wind needs a sufficiently robust partner. Natural gas is that partner, with unique fuel attributes to ensure grid reliability including dispatchability, ramp-up rates and more.

To California’s credit, state officials decided to turn to temporary natural gas-fueled electricity generating plants to bolster the state’s power grid, not long after Gov. Gavin Newsom said the system was in state of emergency amid hot summer temperatures.

They had to act. Even though the state is moving aggressively away from fossil-fuel generation, retiring natural gas plants with a goal of a carbon-neutral grid by 2045, Bloomberg reports, the risk of power outages and angry consumers is an issue. The problem is the lack of power after sunset and, again, insufficient backup.

California wouldn’t be spending taxpayer dollars on temporary generators if it had simply invested in natural gas generating capacity. Instead, by turning away from cost-effective natural gas plants, California had to do this sudden turnaround – which should raise questions about the wisdom of an energy policy that doesn’t include natural gas in the future. Keep the point in mind as CEPP discussions develop in Washington.

America’s energy transition should include natural gas. Todd Snitchler, president and CEO at the Electric Power Supply Association, on LinkedIn:

It seems past time for a rational conversation about reliability. All credible studies from all sides affirm that natural gas units will be needed for decades to come even as more renewables are added to the grid. … Virtually all credible voices also agree the energy transition is coming, but it will take more time than some will admit, it will come with significant costs few are willing to acknowledge, and reliability cannot be sacrificed because the human costs are too great.