By Frank Andorka, Senior Correspondent
According to a report from Bloomberg, natural gas is going to run into significant price competition from solar+storage in the coming years – perhaps even eliminating the need for new natural gas plants in parts of the American Southwest.
The report by Bloomberg New Energy Finance advances a story SolarWakeup has been telling you about for months, which is that new natural gas-fired plants are increasingly being seen as unnecessary as the costs of solar+storage, especially at the utility-scale level, continue to come down.
Prices are so low, in fact, that Bloomberg predicts solar+storage will replace nearly 7 GW of coal-fired generation in the region – but that’s not all.
This won’t be contained to the Southwest,” said Hugh Bromley, a New York-based analyst at BNEF in the article. “This is spreading and will continue to spread.”
Bloomberg offers the following example:
For example, a 100-megawatt solar farm that goes into service in Arizona in 2021, coupled with a 25-megawatt storage system with four hours of capacity, will be able to provide power for $36 a megawatt-hour, according to BNEF. That’s well below the $47 price from a new combined-cycle gas plant, according to the report.
This finding mirrors what’s going on already in California and Arizona, where public service commissions (in Arizona called the corporation commission) are already looking askance a utility requests for new natural gas plants. In the past, utilities have relied on natural gas plants to fuel their electrical grids once the sun goes down, but with battery storage coming into significant usage, natural gas is increasingly obsolete.
In California, the Public Utilities Commission has become far more unwilling to allow its utilities to build or fix natural gas plants and is insisting far more often that they produce grid support through the use of solar + storage instead. And in Arizona, the Corporation Commission told Arizona Public Service (the state’s largest utility) to throttle back its plans to build 5.3 GW of natural gas plants in its latest integrated resource plan and instead resubmit it with more renewables (read: solar) in it.
Energy storage is the key.