Efficiency natural gas power plant

Given continuing high gas prices, almost all of the options to reduce emissions from oil and gas operations worldwide could be implemented at no net cost. 

The private sector should consider the cost, reputational and environmental benefits of reducing methane emissions from oil and gas operations. A number of oil and gas companies have already set targets to limit emissions, or reduce their emissions intensity. There are many voluntary, industry-led initiatives, including the Methane Guiding Principles, the Oil and Gas Climate Initiative, the Oil and Gas Methane Partnership 2.0 and the China Oil and Gas Methane Alliance. Through these initiatives, companies have committed to reduce their emissions intensity over time, advocate for sound methane policy and regulation, and to be more transparent about their emissions. 

Governments will play an important role in encouraging methane reduction efforts, including through measures such as leak detection and repair programmes, technology and equipment standards, limits on flaring and venting, and measurement and reporting requirements. 

El Segundo Energy Center, a 560-MW combined cycle power plant in southern California. Source:... [+] Combined Cycle Journal

For electricity, the lifeblood of our modern world, efficiency has been installed as the 1st choice to reduce energy usage and related GHG emissions. Although renewables are ranked 2nd in this critical "loading order," 3rd ranked natural gas often gets deployed 1st because of greater availability and reliability.

This demonstrates why since California first installed its Renewable Portfolio Standard in 2003, natural gas' share in the power generation mix has actually risen from 47% then to 61% today.

Thanks to its clean burning, predictable, and flexible nature, natural gas has become an increasingly attractive fuel, boosted by a production boom and lower prices. Evolving technologies will continue to allow gas to play an expanding role in the clean generation of electricity.

The U.S. Energy Information Administration reports that "under the proposed Clean Power Plan, natural gas, then renewables, gain generation share." In 2015, natural gas generated 33% of U.S. electricity, and gas is projected to overtake coal this year and become America's leading source of power.

But, the rapidly evolving efficiency of gas-based electricity might be what's most impressive.

"More than 80 percent of natural gas-fired generation in the U.S. comes from natural gas combined-cycle power plants." Combined Cycle Gas Turbines (CCGTs) can have energy conversion rates over 60% at full load, producing "up to 50% more electricity from the same fuel than a traditional simple cycle plant."

One way to measure the efficiency of a generator or power plant is the heat rate, or the amount of energy required to generate a unit of electricity. Higher heat rates indicate less efficient units, since more fuel is required to produce. The heat rate of our natural gas fleet has continued to fall about 1% per year, while rising or staying flat for other competitive fuels (EIA data here).

These rising efficiencies for gas-based power are crucial because they mean less "feed" is required to produce more power, reducing GHG emissions, water use, etc. Very importantly, a 1% improvement in efficiency cuts GHG emissions by 1-3%.

• In 2015, the U.S. used 9.6 Trillion Cubic Feet (Tcf) of natural gas to produce 1,340 Terawatt Hours (TWh) of electricity, more than a 20% improvement from 200o, when 5.2 Tcf produced 600 TWh.

In other words, producing 6 Tcf per year, the Marcellus shale gas play in Pennsylvania alone can generate 840 TWh of electricity, or enough to meet the entire electricity demand needs of Texas, California, and South Carolina combined. It's no wonder, then, that Pennsylvania's annual natural gas-based power generation has surged nearly 6-fold to 60 TWh since 2005, and the state is now investing $13.6 billion more in gas power plants.

A natural gas rush that has slashed total power sector CO2 emissions in The Keystone State by 25% in the past 10 years (here).

U.S. Natural Gas Plants Continue to Require Less Gas to Produce More Electricity

Source: EIA; JTC

Since 2000, 80% of new generation capacity in the U.S. has been natural gas. Today, we have nearly 500,000 megawatts of gas capacity, compared to 375,000 back in 2005, meaning that over 33% of our gas plants are 10 years old or less, having a long-life often exceeding 30 years.

Efficiency improvements will continue because we are installing newer and better gas plants: over 70% of new capacity going forward will be natural gas. Gas utilities have an "ongoing effort to replace older plants with newer, more fuel-efficient energy centers" with state-of-the-art generation technologies. 

This is great news for our environment: even the admittedly "left-leaning" The New York Times says that "in the U.S., the decoupling of emissions and economic growth was driven chiefly by the boom in domestic natural gas."

Because of New Source Performance Standards, the electric power industry will shift mostly to CCGTs for higher efficiency and lower CO2 emissions. CCGTs are constructed in 30 months, far lower lead times than the average for solid fuel plants of about 72 months.

And CCGTs  "are clearly the cheapest to build among thermal power technologies," a vital advantage for gas that is "maintained even after applying carbon capture technology." 

In fact, per Black & Veatch, in 2014, combined cycle gas accounted for about 21% of total U.S. power capacity, but this will rise to nearly 40% in 2038 under the Clean Power Plan. From now until then, total gas capacity will jump nearly 90%.

As for the all-important generation projections, EIA reports gas power could increase over 80% by 2040 to 2,440 TWh under the Clean Power Plan. But, this could ultimately be even higher because, as we know from the case of California, it's gas that gets deployed under normal conditions: "the sun doesn't shine and the wind doesn't blow." Not to mention any sort of carbon tax/trading scheme that would give gas an even firmer upper hand on coal.

Indeed, it's natural gas that has been replacing retiring coal plants (here), and the U.S. faces a "wave" of perhaps 15% or more of our nuclear reactor fleet retiring. In fact, EPA wants as much as 75% utilization for combined cycle natural gas plants (here).

EIA's 2040 projection for the contribution of wind (14%) and solar (6%) to total electricity output under the Clean Power Plan is significant but these non-dispatchable sources will clearly remain constrained by technical, physical, and financial limitations, regardless of the much reported on "shift to renewables" in the final version of the Clean Power Plan as opposed to the draft proposal.

Simply put, no law changes our most basic electricity reality that natural gas power is almost always available, whereas wind and solar are typically unavailable. Moreover, "sweet spotting," where the best opportunities get chosen first, indicates that many of quality wind and solar locations have already been deployed, and many of our quality energy efficiency chances have already been capitalized upon. Thus, incremental gains in these areas are far more difficult and expensive than you're being told. 

Indeed, the ongoing rise in natural gas power plant efficiency is just another indication that, as renewable energy technologies continue to evolve, so do fossil fuel technologies. Reality check going forward: renewables will not be competing against fossil fuels as they are now but as they will become.

Especially for cleaner burning natural gas, which is often incorrectly seen by the renewable energy business as unwanted competition, as opposed to the flexible peaker plants that will enable intermittent wind/solar to compete by backing them up, this constant evolution of fossil fuel technologies cannot be ignored.

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