Natural gas-fired power generation may be buffeted by increasing competition from renewables and nuclear capacity additions worldwide, but don’t count it out as it will continue to play a key role for decades in reducing worldwide emissions, according to the International Energy Agency (IEA).
The global energy watchdog in Energy Technology Perspectives 2017 (ETP) highlighted how policy actions and market signals are driving the trends reshaping the sector over the next 40 years, increasingly shaped toward low-carbon sources.
Gas-fired power increased worldwide by 2.2% in 2014 from 2013, generally in line with the 2.4% annual growth needed to achieve a global 2025 emissions reduction target, researchers said. However, ever-better renewables technology and efficiency gains are taking some of gas-fired market share as countries move toward lowering carbon emissions.
Gas-fired power generation has an "important role" to play in limiting emissions by gradually displacing coal-fired baseline generation. Efficiencies in gas-fired power also are improving, with top open-cycle gas turbine efficiency at about 4%, up from around 35% in 1990.
The ETP outlines a couple of references cases. In the base case, or reference technology scenario, existing energy and climate commitments are taken into account, including those made under the Paris agreement reached in December 2015. The ETP was completed before the Trump administration said it would withdraw the United States from the landmark global accord.
Researchers also outlined the 2 Degrees Celsius (2DS) scenario, which offers a pathway to limit the rise of global temperatures. Under 2DS, which examines gas-fired generation, the global power sector could reach net-zero carbon dioxide emissions by 2060, according to IEA.
"The role of natural gas-fired power generation in the 2DS is twofold: first, to provide flexibility to support the integration of renewables, and second, as a lower-carbon alternative to coal-fired generation," researchers said. "Coal-to-gas switching will be of particular importance in the short-term until 2025-2030 in the 2DS, with strong deployment of both gas turbines and combined-cycle plants at the expense of coal."
Under 2DS, gas-fired power generation increases worldwide over the next decade by roughly 2.4%/year.
"While this is markedly lower than the 2.2% observed in 2014 and the average over the last decade (3.9%), the volatility of the growth path over the last several years and pronounced regional differences indicate the fragility of gas generation growth," said researchers. "Additional progress in also needed in efficiency and flexibility performance of plants to provide support for the integration of variable renewables and serve as a short-term, lower-carbon alternative to coal plants, while preventing long-term stranding of gas plants."
However, gas increasingly has to compete not only against coal but in tandem with low-carbon alternatives that are quickly contributing to decarbonizing the power sector in many regions, such as energy efficiency and renewable power generation.
How competitive gas is to alternative generation technologies within the electricity system will remain "highly dependent on regional market conditions," according to researchers.
"Carbon pricing, maximum emission caps and strict pollution regulations have proven their ability to establish competitiveness of gas with coal, and technology-neutral competitive mechanisms can ensure electricity supply security."
Because gas is a carbon emissions source, researchers suggested that research and development "should be directed to gas power generation using carbon capture and storage (CCS), "because unabated gas, just like coal, is too carbon-intensive in the long run to reach the 2DS target."
Overall, policy signals are needed to accelerate and transform the electricity system, according to IEA experts.
"A number of trends indicate that the global energy system is changing," and the energy mix is being redefined. While renewables and nuclear capacity additions are supply the majority of demand growth in the power sector, innovative transportation technologies are gaining momentum.
"As costs decline, we will need a sustained focus on all energy technologies to reach long-term climate targets," said IEA Executive Director Fatih Birol. "Some are progressing, but too few are on track, and this puts pressure on others. It is important to remember that speeding the rate of technological progress can help strengthen economies, boost energy security while also improving energy sustainability."
Energy efficiency, bioenergy and CCS "are notable examples of where significant potential for technology progress remains, but strong policy signals will be required to trigger the appropriate investments."