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Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--Among the major hindrances in transitioning to clean, but intermittently generated, wind and solar power is the cost and availability of baseline power storage. In other words, it involves stocking up on enough storage--batteries or another alternatives--to provide power at night (solar) or in the doldrums (wind).
Research and development efforts slashed utility-scale battery costs by 70% from 2015 to 2018, and lithium-ion battery cell costs shrank by a whopping 97% between 1990 and 2020. These improvements have greatly increased the amount of storage installed and planned for installation, according to a recent Reuters report, thus increasing the baseline backup capacity of renewables. Reuters also learned that "some battery operators are already supplying back-up power to grids at a price competitive with gas power plants, meaning gas will be used less."
So those changes have led to a corresponding drop in construction and planning of new natural gas plants, right?
Well, not just yet, say experts at Industrial Info. While Reuters' recent poll of "more than a dozen power plant developers" in Europe and the U.S. did show that 68 gas plant projects have been cancelled or put on hold, mainly due to concerns about whether those plants' baseline power would be utilized enough to pay for themselves, Industrial Info sees a continuing overall growth in natural gas power generation, said Industrial Info's Britt Burt.
Globally, Industrial Info is tracking more than 144 gigawatts (GW) of gas-fired generation plants under construction, he said. The leading countries in that growth are:
"We anticipate this will only increase over time, as major power producers such as the Tennessee Valley Authority (TVA), Georgia Power, Entergy, Evergy, Ameren, Dominion, SaskPower, Duke Energy, and many others say they'll be relying on natural gas for baseline power for the foreseeable future," Burt said.
It is key to note, he added, that "some are going as far as delaying development of renewable power projects in favor of natural gas-fired assets."
World-Wide, Natural Gas Powers Up
For the next four years, starting January 1, 2024, Industrial Info sees another 492 GW of gas-fired power generation plants scheduled to break ground. During that four-year period, 322 GW are planned for Asia, including Vietnam, China, South Korea, Bangladesh and others. There are 52 GW planned in Europe, including the U.K., Italy, Germany and elsewhere.
In South America, 48 GW are on the drawing boards, mostly in Brazil. African nations have plans for 37 GW, mostly in Nigeria and South Africa, but a certain number of projects are set across the continent. North America completes the list, with the U.S. and Canada on board for 30 GW of new capacity.
For 2028 and beyond, Industrial Info sees another 77 GW in the pipeline.
Why is the Grid Still Gassing Up?
Burt notes a number of factors, but, "the primary issue is concern over making sure they have reliable electricity sources available to meet future demand."
Questions about availability and capacity may be behind those concerns. Lithium is about the most popular date at the energy-transition storage ball, with electric vehicle (EV) makers and utilities among a long list of suitors begging for a turn. Will everyone get all the dances they want?
In 2021, the world produced just over a half million metric tons of lithium carbonate equivalent (LCE), which is expected to grow to about 4 million metric tons by 2030. Some feel that new technologies will speed up the growth. Indeed, some new systems and locations (such as Arkansas) are growing in importance.
If that does not ramp up quickly enough, however, supplies may be short and, in the land of supply-and-demand, prices then could shoot higher. Utilities depending on the substance for lithium-ion batteries may not have the supplies they need, and could pay much more for what they can get.
Others in the industry have noted that today's best storage, lithium-ion or otherwise, usually only holds about a four-hour charge, not nearly enough to get through a dark night or a calm week--putting the convenience and safety of a community at greater risk, if natural gas or some more reliable source is not in the mix.
Gas Investment Questions
The Reuters story notes that natural gas plants must run a certain percentage of the time to be profitable, and that the utilities that are hesitating to build are concerned about return on investment (ROI) if renewable growth idles those plants to an uneconomical level.
So, while this tug-o-war continues, it seems in most cases that utilities are opting for security instead of transition.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
Research and development efforts slashed utility-scale battery costs by 70% from 2015 to 2018, and lithium-ion battery cell costs shrank by a whopping 97% between 1990 and 2020. These improvements have greatly increased the amount of storage installed and planned for installation, according to a recent Reuters report, thus increasing the baseline backup capacity of renewables. Reuters also learned that "some battery operators are already supplying back-up power to grids at a price competitive with gas power plants, meaning gas will be used less."
So those changes have led to a corresponding drop in construction and planning of new natural gas plants, right?
Well, not just yet, say experts at Industrial Info. While Reuters' recent poll of "more than a dozen power plant developers" in Europe and the U.S. did show that 68 gas plant projects have been cancelled or put on hold, mainly due to concerns about whether those plants' baseline power would be utilized enough to pay for themselves, Industrial Info sees a continuing overall growth in natural gas power generation, said Industrial Info's Britt Burt.
Globally, Industrial Info is tracking more than 144 gigawatts (GW) of gas-fired generation plants under construction, he said. The leading countries in that growth are:
- China (33.5 GW)
- U.S. (13.7 GW)
- Taiwan and South Korea (both with more than 7 GW)
"We anticipate this will only increase over time, as major power producers such as the Tennessee Valley Authority (TVA), Georgia Power, Entergy, Evergy, Ameren, Dominion, SaskPower, Duke Energy, and many others say they'll be relying on natural gas for baseline power for the foreseeable future," Burt said.
It is key to note, he added, that "some are going as far as delaying development of renewable power projects in favor of natural gas-fired assets."
World-Wide, Natural Gas Powers Up
For the next four years, starting January 1, 2024, Industrial Info sees another 492 GW of gas-fired power generation plants scheduled to break ground. During that four-year period, 322 GW are planned for Asia, including Vietnam, China, South Korea, Bangladesh and others. There are 52 GW planned in Europe, including the U.K., Italy, Germany and elsewhere.
In South America, 48 GW are on the drawing boards, mostly in Brazil. African nations have plans for 37 GW, mostly in Nigeria and South Africa, but a certain number of projects are set across the continent. North America completes the list, with the U.S. and Canada on board for 30 GW of new capacity.
For 2028 and beyond, Industrial Info sees another 77 GW in the pipeline.
Why is the Grid Still Gassing Up?
Burt notes a number of factors, but, "the primary issue is concern over making sure they have reliable electricity sources available to meet future demand."
Questions about availability and capacity may be behind those concerns. Lithium is about the most popular date at the energy-transition storage ball, with electric vehicle (EV) makers and utilities among a long list of suitors begging for a turn. Will everyone get all the dances they want?
In 2021, the world produced just over a half million metric tons of lithium carbonate equivalent (LCE), which is expected to grow to about 4 million metric tons by 2030. Some feel that new technologies will speed up the growth. Indeed, some new systems and locations (such as Arkansas) are growing in importance.
If that does not ramp up quickly enough, however, supplies may be short and, in the land of supply-and-demand, prices then could shoot higher. Utilities depending on the substance for lithium-ion batteries may not have the supplies they need, and could pay much more for what they can get.
Others in the industry have noted that today's best storage, lithium-ion or otherwise, usually only holds about a four-hour charge, not nearly enough to get through a dark night or a calm week--putting the convenience and safety of a community at greater risk, if natural gas or some more reliable source is not in the mix.
Gas Investment Questions
The Reuters story notes that natural gas plants must run a certain percentage of the time to be profitable, and that the utilities that are hesitating to build are concerned about return on investment (ROI) if renewable growth idles those plants to an uneconomical level.
So, while this tug-o-war continues, it seems in most cases that utilities are opting for security instead of transition.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
