Why Wind and Solar Need Natural Gas: A Realistic Approach to Variability

Investment Rating - The report suggests a positive outlook for natural gas as a necessary component in the transition to a renewable energy grid, indicating a supportive investment environment for gas infrastructure and technology development [2][11][44]. Core Insights - The transition to wind and solar energy is accelerating, but these variable renewable energy (VRE) sources introduce significant reliability challenges that cannot be fully addressed by current storage technologies [2][5][6]. - Natural gas is positioned as a critical bridge fuel that can provide the necessary reliability during the transition to a predominantly renewable energy grid, especially in the face of seasonal and unpredictable energy supply variations [2][11][44]. - The report outlines a phased approach to the energy transition, emphasizing the need for regulatory support and technological innovation to manage the variability associated with increasing VRE penetration [2][10][34]. Summary by Sections Key Takeaways - Wind and solar are rapidly displacing coal but introduce variability that could compromise grid reliability [2]. - Seasonal storage technologies like hydrogen and pumped hydro are not viable alternatives in the near term, making natural gas essential for reliability [2][11]. - The Department of Energy (DOE) should focus on developing seasonal storage technologies and advanced modeling to address future grid challenges [3][11]. Introduction - The share of U.S. electricity from VRE is growing quickly, with projections indicating that VRE could exceed 40% of electricity generation by 2030 [5][15]. - Variability in electricity supply is becoming a significant challenge, necessitating solutions beyond short-duration storage [5][6]. The Challenge of Variable Renewable Energy - The transition to a VRE-dominated grid will require addressing predictable and unpredictable energy deficits, with significant implications for grid management [6][20][34]. - The report identifies three phases of grid evolution, each with distinct challenges and requirements for energy supply management [7][26]. Mitigating the Variability Problem - Energy storage is a potential long-term solution, but current technologies are insufficient for long-duration needs [35][55]. - Demand management and better grid integration are also highlighted as important strategies to address variability [35][36]. Gas and Phase II of the Energy Transition - Natural gas currently provides about 25% of U.S. electricity and is expected to play a crucial role in managing VRE variability as the grid transitions [44][46]. - Combined-cycle gas turbines (CCGTs) are identified as a reliable source of energy that can adapt to changing grid demands [44][46]. Beyond Phase II: Long-Duration Storage Technologies - The report discusses the need for long-duration energy storage (VLDES) technologies that can effectively address seasonal and annual variability [55][56]. - Current storage technologies are not yet capable of meeting the long-duration needs required for a fully decarbonized grid [55][57].