USA Today, Sept. 9, 2019
Powerful hurricanes. Record-breaking heatwaves. Droughts that bring ruin to farmers. Raging forest fires. The mass die-off of the world's coral reefs. Food scarcity.
Instead, utilities and energy companies are continuing to invest heavily in carbon-polluting natural gas. An exclusive analysis by USA TODAY finds that across the United States there are as many as 177 natural gas power plants currently planned, under construction or announced. There are close to 2,000 now in service.
All that natural gas is “a ticking time bomb for our planet,” says Michael Brune, president of the Sierra Club. “If we are to prevent runaway climate change, these new plants can’t be built."
It also doesn't make financial sense, according to an analysis by the Rocky Mountain Institute, a Colorado-based think tank that focuses on energy and resource efficiency. By the time most of these power plants are slated to open their doors, the electricity they’ll provide will cost more to produce than clean energy alternatives.
By 2023, the U.S. Energy Information Administration estimates the average cost of producing a megawatt hour of electricity will be $40.20 for a large-scale natural gas plants. Solar installations will be $2.60 cheaper and wind turbines will be $3.60 cheaper.
The world needs to reduce its carbon emissions rapidly – by 50% within the next decade – or face the prospect of a global temperature rise of more than 2.7 degrees within decades, said Michael Mann, a professor of atmospheric sciences at Pennsylvania State University.
That’s enough warming to kill off the coral reefs, melt large parts of the ice sheets, inundate coastal cities and to yield what Mann calls “nearly perpetual extreme weather events.”
“By any definition, that would be catastrophic,” he said.
We’re seeing the start of it now. There’s strong data to suggest that global warming is already causing changes in the jet stream and other weather systems. That can cause hurricanes to slow down and wreak devastation in single areas for longer, said Marshall Shepherd, director of the atmospheric sciences program at the University of Georgia.
“With Dorian, we saw it stall over the Bahamas. We saw that with Harvey in Houston and Florence in the Carolinas,” he said.
Adding dozens of new natural gas plants in the coming decades is going in the exact opposite direction of what we need, clean energy advocates say.
“If the current pipeline of gas plants were to get built, it would make decarbonizing the power sector by 2050 nearly impossible,” said Joe Daniel, a senior energy analyst with the Union of Concerned Scientists, a nonprofit based in Cambridge, Massachusetts.
An analysis by the Rocky Mountain Institute published Monday looked at 88 gas-fired power plants scheduled to begin operation by 2025. They would emit 100 million tons of carbon dioxide a year – equivalent to 5% of current annual emissions from the U.S. power sector.
The institute calculated the cost of producing a megawatt-hour of electricity of a clean energy portfolio in each state that would provide the same level of power reliability as a gas plant. It determined that building clean energy alternatives would cost less than 90% of the proposed 88 plants.
It would also save customers over $29 billion in their utility bills, said Mark Dyson, an electricity markets analyst who co-authored the Rocky Mountain Institute paper.
“If you look at how things pencil out, we’re at a tipping point,” he said. "Here's evidence that the switch from gas to clean energy makes economic sense and is compatible with utility companies' need for reliability."
USA TODAY compiled its own list of 177 planned and proposed natural gas plants through August, using data from S&P Global Market Intelligence, which tracks power plants that have been officially announced, and the Sierra Club, which tracks proposed plants.
Of those, 152 have a scheduled opening date of between 2019 and 2033, though only 130 have specific locations chosen. An additional 25 are part of companies’ long-term planning processes and don’t have estimated opening dates yet.
The plants are a mix of large-scale installations meant to provide lots of electricity much of the day and smaller plants used for short periods when demand for energy is particularly high.
Texas has the most proposed plants, with 26. Next is Pennsylvania with 24, North Carolina with 12, Florida with 10, California with nine and Montana with eight.
Not all will be built. Power companies are required to estimate future needs and plan as much as 15 years out, and this list includes plants which the companies may eventually decide they don’t need.
But the numbers show that greenhouse gas-producing natural gas is still on the table for many power producers, despite warnings that the energy sector needs to be quickly moving away from carbon-producing power sources.
Another concern raised by clean energy advocates is that once built, natural gas plants typically have a 30-year lifespan. Many of these plants will end up as "stranded assets," unused because they're too expensive to run, while consumers will still be on the hook for the cost of the construction, said Daniel.
It’s also true that power companies are building out solar and wind generation. Over the next two years, clean energy is expected to be the fastest-growing source of U.S. electricity generation, according to the U.S. Energy Information Administration.
Even so, that will only bring the share of wind and solar in the United States electricity market to slightly under 11%.
By 2020, EIA expects natural gas will make up about 36% of U.S. electricity generation. In comparison, coal is at 23%, nuclear at 20% and hydroelectric at 7%.
If natural gas plants contribute to global warming and most of them are going to be more expensive, why are so many still on the drawing board? The reasons are varied.
Energy companies say gas is more reliable than renewables and cheaper and less carbon polluting than the coal it often replaces.
But renewable energy advocates say the incentives for utilities and energy producers aren’t always in line with those of consumers.
For regulated utilities, one of the easiest ways to make money is to invest capital in large building projects, such as natural gas plants. Regulators allow utilities to set rates so that they get a return on invested capital of about 10%, Dyson said. That gives energy companies an incentive to build as much as possible.
In contrast, utilities that procure wind and solar power via commonly available purchase contracts earn no returns for these projects.
"There's a perverse incentive for some utilities to build as big as they can, rather than to build as smart as they can," said Ben Inskeep, an analyst with EQ Research, a clean energy policy consulting firm in Cary, North Carolina.
Companies also focus on reliability. Duke Energy, a power company based in Charlotte, North Carolina, has more than 7 million customers. As it transitions away from coal, it has embraced natural gas, announcing last week that it was considering as many as five new gas plants.
Today 5% of Duke Energy Carolinas' electricity comes from solar, a percentage it plans to increase to between 8% and 13% by 2034, according to its most recent filing with state regulators. The state has almost no wind energy because of laws restricting the placement of wind turbines.
"We know our customers and communities want cleaner energy, and we’re doing our part to deliver that," said spokeswoman Erin Culbert.
But she emphasized that Duke doesn't believe solar and wind can be cost-effective and reliable enough to meet all its customers' energy needs.
“Continued use of natural gas is key to our ability to speed up coal retirements, and its flexibility helps complement and balance the growing renewables on our system,” she said.
Another hurdle for renewable energy, some supporters say, is a combination of state-level rate-setting requirements and regional market rules that have led to a compensation structure for companies that favors coal and natural gas.
Who sets those rules depends on where the plant is.
In states where retail utilities own their own power generation facilities, the rates are approved by public utility commissions. Commissioners are typically appointed by state governors.
The process is less clear in the Midwest, Northeast, Mid-Atlantic, California, and Texas, where utilities buy and sell their power through organized markets run by regional transmission organizations.
These are run by boards that by law must be independent. They are typically composed of people from the business and energy world and are chosen by complex systems. In some cases they are voted on by existing board members.
The boards set the rules, which are then approved by the Federal Energy Regulatory Commission.
Ultimately these commissions and boards are supposed to decide what’s cost-effective for both the companies and ratepayers, said Scott Hempling, an adviser to regulators, law professor at Georgetown University in Washington, D.C., and author of two books on public utility law and regulation.
“A utility’s preference for profit is neither surprising nor wrong. But it’s not the utility’s job to balance its self-interest against the customers’ interest. It’s the job of regulators to constrain the private profit impulse with public interest principles,” he said.
It’s not news that there is bias towards profit, which can disadvantage customers. “The question is why it’s allowed to persist," he said.