Despite climate risks, utilities bet big on natural gas?
Coal plants are being retired due to regulatory compliance with existing and new Clean Power laws.
Wind and solar projects are being installed on an increasingly utility scale (meaning very large); such renewable power is expected to grow to over 20% of the U.S.’s power needs by 2030 (currently around 6%). In one case, renewables are replacing the power from a retired nuclear power plants.
However, utilities are making substantial investments in natural gas pipeline projects. These projects are expanding the supply of natural gas for use in large power projects.
Concerns are mounting for these investments from two opposite sides:
- Environmentalists will illustrate that the proposed gas power generation will prevent the U.S. from meeting its commitment to reduce greenhouse gases.
- Investors are concerned, as is the case for coal projects, that these gas pipeline investments may be stranded (not fully repaid) if environmental regulations are fully implemented.
So the utility planners are hedging their bets. Natural gas is currently abundant and for highly reliable power production it is cost effective. However, if greenhouse emissions become an economic reality, this planning might lead to not only stranded costs but additional global warming.
With such conflicting interests utilities, markets and regulators need clean Energy Policy from the US Federal Government.
Realgy Energy Services is a registered Retail Energy Marketer in the states of Illinois, Michigan and Indiana. We offer Service Plans that will provide electric and natural gas at wholesale pricing direct to customers without any utility markup. Our Service Plans work with the local utility to provide seamless service and annual energy savings. Service Plans include Guaranteed SavingsTM, ManagedPriceTM, ManagedGreenTM Index, Fixed and PriceAssuranceTM.
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