Natural gas and renewables are projected to be the nation’s leading power generation sources over the next decade, according to Morningstar Equity Research.
From 2018 to 2030, the share of U.S. natural gas from electric generation is forecast to rise to 41% from 35%, while renewables are expected to more than double to 22% from 10%. Renewables would surpass coal, nuclear and hydroelectric to take a role second only to gas in the power stack. Gas-fired power is forecast to increase by grow 33% and renewables 142% during the period, according to the report.
Morningstar is forecasting renewables growing at about the same pace during all of the coming decade. Renewable portfolio standards (RPS) now in effect across the country would help drive growth, Morningstar analyst Charlie Fishman said.
The American Gas Association’s Richard Meyer, managing director for energy analysis, said the Morningstar forecast reflects the economic and environmental advantages of natural gas and underscores it is “a flexible energy source that has, and will continue to, enable the expansion of renewable technologies.”
In addition to various RPS, states have been moving aggressively to curb fossil fuel consumption, implementing policies to decarbonize and power their economies with renewable resources in a growing trend that could ultimately dent natural gas demand.
“In the next decade, we expect the main battle will be between gas and renewables, and we believe both will be winners,” Fishman wrote.
After the last two decades in which coal and gas were the main contestants vying to serve the power market, gas has won the battle to account for about 35% of the nation’s power generation, compared to 17% in 2001. During the same period, coal’s share decreased from 51% to current levels of about 27%.
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