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US power sector will 'continue to need natural gas,' EEI head says

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Six trends shaping the industries and sectors we cover in 2021

Six trends shaping the industries and sectors we cover in 2021

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Essential Energy Insights - January 2021


US power sector will 'continue to need natural gas,' EEI head says

The U.S. power sector's transition to a lower-carbon future is underway but will not eliminate the need for natural gas in the coming years, Edison Electric Institute President Tom Kuhn said at the U.S. Energy Association's annual State of the Energy Industry Forum on Jan. 28.

Although Kuhn expects electric utilities to meet their decarbonization goals, he and other industry group leaders said the power sector must do so with a wide range of energy sources and technologies rather than renewables alone.

"We're going to continue to need natural gas, which has helped us to reduce our carbon emissions greatly and provides that 24-7, on-demand power that helps us maintain the reliability as well," Kuhn said. "Wind, solar and [energy] storage will continue to help us make the journey, and I think that we are going to need new technologies to get to the last 20%."

U.S. President Joe Biden has called to decarbonize the power sector by 2035 as part of a goal to help the country achieve net-zero greenhouse gas emissions economywide by 2050. Ahead of Biden's presidency, many large utilities already announced pledges to slash their emissions in the coming years with the ultimate aim of being carbon-free by 2050.

But with coal- and natural-gas fired generation still making up roughly 60% of U.S. electric output, carbon capture and sequestration must be employed along with efficiency improvements and renewable energy, according to Kuhn.

"It really is going to take a combination of all those technologies out there that we need to make that happen," Kuhn emphasized. "I am very, very convinced that we will get there."

A broad bipartisan energy innovation bill that Congress passed in late 2020 was "a down payment" on zeroing out emissions, according to Kuhn. "But we're going to need a lot more research and development on these carbon-free technologies to move forward."

Those thoughts were echoed by other power industry group executives at the Jan. 28 event.

"The plans that some entities have talked about for reaching zero carbon by a certain date, if you ask them how they're going to get there, they can talk about getting most of the way there, but unless there's some technology innovation, it's really hard to get all the way there," said Jim Matheson, CEO of the National Rural Electric Cooperative Association. As a result, investment in technological innovation "ought to be part of the discussion," he added.

Power generators' continued reliance on coal and gas has frustrated environmental groups that want utilities to act more quickly to avoid the worst impacts of climate change.

According to a new report from Sierra Club, the 50 U.S. utilities that generate the most electricity by burning coal and gas are planning to retire just 25% of their coal generation by 2030. Out of the 79 utility operating companies covered in the study, 32 are planning to build new gas plants totaling over 36 GW through 2030.

"Science shows that unless utilities retire all their coal plants by 2030, abandon all plans to build gas plants, and aggressively build out renewable energy resources, we risk destabilizing our livable climate," Sierra Club said. "Despite this pressing deadline, utilities are either not moving fast enough toward these goals, or not moving at all."

Along with renewable resources, nuclear energy will be crucial to industry decarbonization efforts, another speaker at the U.S. Energy Association conference said. At roughly 20% of U.S. electric generation, nuclear power "will be at the foundation of our clean energy future," Nuclear Energy Institute President and CEO Maria Korsnick told attendees.

"As we look at the ambitious climate goals that have been announced, including President Biden's commitment to 100% clean by 2035, we can only meet them with nuclear as part of the mix," Korsnick insisted.