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Unlike Peak Oil, Peaker Gas Has a Future

Alternative Energy

Bloomberg New Energy Finance has just released its annual tome of forecasts. The short story is that wind and solar power are getting cheaper and we will all be using more of them — a lot more, and relatively soon: Not the most encouraging forecast for coal, obviously. Natural gas, though, is a bit more nuanced. While gas-fired electricity drops from 25 percent of the market to 17 percent, its absolute output isn’t cut in half as coal’s is. On the other hand, it doesn’t grow much either. That undermines the thesis of gas being a “transition” fuel, generating lower carbon emissions than coal and bridging power’s dirty past and cleaner future.

Still, even under BNEF’s projection of a far greener energy sector, gas is expected to have a meaningful role, particularly as flexible capacity. The intermittency of solar and wind power requires more sophisticated management of demand for power, as well as storage and back-up options. Storage generally means batteries, and BNEF certainly foresees growth there, with capacity forecast to rise by a factor of more than 160 times by 2050.

But the limitations of lithium-ion batteries — particularly in terms of meeting peak demand for long periods or providing storage over long periods of time — means BNEF foresees gas-fired plants continuing to provide back-up. What changes, however, is the type of plant required.

Rather than the more efficient (and expensive) combined-cycle gas turbines that dominate the market now, simpler (and cheaper) “peaker” plants — which turn on only to meet high demand — will be more suited to competing with renewables and storage for those relatively infrequent periods where they can provide the last kilowatt-hour required. Hence, the mix of new gas plants being built shifts significantly.

One striking aspect of that projection is the sheer size of the market, with orders for new turbines averaging almost 60 gigawatts a year. That contrasts sharply with the gloomier noises coming from manufacturers such as Siemens AG and General Electric Co. (see my colleague Brooke Sutherland’s column on their troubled power businesses here). GE is planning for a market of less than 30 gigawatts of new heavy-duty gas turbine orders in 2019 and 2020. BNEF’s projections imply that may be too pessimistic.

Concurring with this, a new report from Hugh Wynne and Eric Selmon of Sector & Sovereign Research LLC, also published this week, projects turbine orders to rise from 31 gigawatts in 2020 to 49 in 2025 and 70 in 2030. Even under its more-bearish scenario — where batteries are deployed much more quickly — annual orders rise back toward 50 gigawatts by the end of the 2020s, in part simply to replace retiring plants (on that note, it’s worth pointing out BNEF’s projections imply net additions to capacity averaging just 31 gigawatts a year out to 2050).

If that offers a hopeful note for turbine-makers, it comes with caveats. The shift toward peakers rather than baseload gas plants means even if orders are higher than expected, that will be partly because they are cheaper. There’s no other way to compete in a market becoming more defined by renewable sources, where deflation is structural. Plus, as peakers, they will be used less often.

Cheaper plants requiring less maintenance mean the revenue opportunity for turbine makers probably won’t be as big as those higher order numbers imply.

The other issue to consider is this: Who will finance and build those gas plants? In the past, merchant generators played a big role in the gas-plant boom in the U.S. But that model has come under increasing pressure as power demand has flattened and things like renewable energy and demand management have muscled in — all of which will intensify from here.

Future gas-peaker plants may instead have to be built by utilities (funded by ratepayers) or require some other incentive mechanism similar to the capacity auctions currently run in some U.S. regional power markets. In this country, at least, the energy transition and the political maneuvering to undercut it make getting to a sensible and, from a developer’s perspective, reliable planning environment doesn’t look like a sure thing.

Above all, the biggest wildcard is that transition itself. If storage technologies, in particular, advance much more rapidly, then natural gas’ role begins to look more doubtful. Even the concept of peaks in power demand is shifting as a result of renewable energy’s penetration and the likely impact of more electric vehicles getting on the road (and into sockets). The overriding message from BNEF’s report is that the world is changing profoundly; gas will have to fight for its place in it.

 BloombergQuint



30 Comments on "Unlike Peak Oil, Peaker Gas Has a Future"

  1. Coffeeguyzz on Mon, 8th Jul 2019 3:34 pm 

    A little surprising that so much time seems to have gone into this BNEF analysis without acknowledging – apparently – the rapid emergence of cheap, globally accessible natgas that is powering new build CCGPs worldwide.

    Even the graph accompanying this article shows, with the black bars, the high percentage of huge CCGPs out to 2030.

    Fact is, the Frame H gas turbines are now so efficient that the EIA just created a new classification for them … ANGCC … Advanced Natural Gas Combined Cycle.
    Pairing the fast, cheap set up of LNG import terminals via Floating Storage and Regasification Units (FSRUs), with ANGCC plants, global power generation and natgas consumption is exploding upwards.

    Bangladesh is on its second, Pakistan its third FSRU.
    Turkey, Argentina, Jamaica, Kaliningrad (!), India, China are just some of the countries rapidly embracing this technology.

    Brazil’s Sergipe has the largest gas plant in South America – 1,500 Mw – using an FSRU.
    Port Kembla, Australia should have one – of potentially 5 Oz terminals – up and running next year.

    Cowboyistan!

  2. Anonymouse on Mon, 8th Jul 2019 5:19 pm 

    Coffeeguyzzz = Nonytardstan!

  3. Theedrich on Mon, 8th Jul 2019 9:12 pm 

    The West has a psychopathic class of elites.  How did this come about?  Ultimately, it can be traced back to Christianity, Europe’s 2000-year-old myth system with its religio-political control mechanism of guilt.  This guilt notion originally centered on sex, but in recent times has been shifted to having a White skin.  The political and economic elites, even those who are atheist or merely agnostic, feel neurotically burdened by this guilt (which is truly “peak gas”), and are now driven by it to rescue non-Whites everywhere by enslaving Whites (other than themselves, of course).  So the current Western civilizational obsession is White genosuicide, which will (pace the virtue-signallers) doom over 4½ billion years of evolution.

  4. Theedrich on Mon, 8th Jul 2019 9:15 pm 

    Thus it behooves us to inquire into the true nature and origins of Christianity, the most powerful fakery the world has ever known.  Although requiring a fair amount of detail, understanding this is worth the time and effort:

    Christianity is fake news.  From beginning to end.  Yid-Cretinity begins with a myth about two humans and a talking snake.  For that, read What Really Happened in the Garden of Eden? by Professor Ziony Zevit.  Then, on the bizarre fantasy of the “Exodus,” read first professor and archeologist Ann E. Killebrew’ 2005 work, Biblical Peoples and Ethnicity: An Archaeological Study of Egyptians, Canaanites, Philistines, and Early Israel, 1300-1100 B.C.E. (Atlanta, GA: Society of Biblical Literature, 2005), archeology shows the beginnings of ancient Israel (the ethnogenesis of the Hebrews) appearing in the Cisjordan and Transjordan hill country in the eleventh century. In addition, scholars have found a correlation between the description of the boundaries of the “promised” land (as described in Numbers 34:1-15, Josh. 15:1-12; Ezek 47.13-20) and Levantine territory under Egyptian control at the end of the 13th century. (Cf. Adele Berlin and Marc Zvi Brettler, edd., The Jewish Study Bible, Oxford, England: Oxford Univ. Press, 2004, p. 341.) In other words, after the retreat of the imperial Egyptians, the subsequently independent Canaanites claimed as their own the newly freed territory as having been “promised” to them by Yahwéh.

  5. Theedrich on Mon, 8th Jul 2019 9:16 pm 

    As for the so-called Levites and their part in the “Exodus,” go to The Exodus Is Not Fiction by Reform Judaism rabbi Richard Elliott Friedman, who shows that the real bunch leaving Egypt was a small but violent tribe of invaders known as “Levites” (literally, “adjoined to”), not the original and indigenous Canaanites/Israelites, let alone several million of them.  The Levites (who took over the priesthood) were violent in the extreme, as four different texts (Gen 34, 49, Exod 32:26–28, Deut 33) note.  As Friedman points out, “So basically everyone knew:  You don’t mess with the Levites.”  Interestingly, including the illusive Moses himself, the only eight Levites mentioned in the Pentateuch/Torah all have Egyptian names:  Hophni “tadpole”;  Hur “Horus”;  Merari “beloved”;  Moses or Moshe “child”;  Mushi “He that touches;  that withdraws or takes away”;  Pashhur “portion of [the god] Horus” and two youths named Phineas “the Nubian.”  Richard Elliott Friedman, in his The Exodus, concludes from this that, after the Egyptian retreat, that tiny but powerful group of such Levites, perhaps originally enslaved, left Egypt and brought their migration/escape story with them when they moved to Canaan and joined the indigenous people, arrogating the priesthood to themselves.

  6. Theedrich on Mon, 8th Jul 2019 9:17 pm 

    The next major phase came with the capture of Jerusalem in 587/6 B.C. by the Babylonians and the deportation of the Hebrew upper classes to Babylon, where the Jewish rabbinate emerged to maintain the culture.  Then, along with Persia’s conquest of Babylon itself and the release in 538 B.C. of many Jews to return to Canaan and rebuild their temple, major elements of dualistic Persian Zoroastrianism (of the prophet Zarathuštra, who lived sometime between 1400-1000 [cf. Mary Boyce, A History of Zoroastrianism, Leiden/Köln: E.J. Brill, 1975, p. 190]) were infused into the Hebrew/Jewish religious ideology. Among other things, the Persian ruler, Cyrus the Great, was scripturally crowned as the first Messiah (“Anointed One,” Isaiah 45:1). Major theological developments and borrowings from all this were the following:

    – The national god, Yahwéh (“YHWH”), was promoted to the same status as Ahura Mazda (the “Wise Lord”).
    – Satan (formerly merely “the Antagonist,” a kind of prosecuting-attorney-demigod) was diabolized as Angra Mainyu (the “Evil Spirit”)
    – Yahwéh’s former wife, Ishtar/Astarte (Jer 7:18; 44:17ff.), the Regina Cæli, disappears from the popular Jewish pantheon after the Babylonian Captivity.
    – The concept of heaven as a “reward” for normative civil/religious behavior:  “democratization” of the apotheosis (originally only) of potentates, as long found in Egyptian religion, where the pharaoh became a god at death.  This idea prepared the way for the notion of the resurrection of the body, which was to play a large role in the Hellenistic mystery religions with their divine heroes rising anew after death.
    – The concept of hell (“Sheol,”, “Gehenna,” etc.):  originated in the “supernaturalization” of the ancient Persian “ordeal” by fire (molten lead being poured on chest of the accused) as a test of culpability.  (The innocent were preserved from death by the Christ-like god, Mithras, as entranced fire-walkers today are immune to being burned by the coals they walk on.)

  7. Theedrich on Mon, 8th Jul 2019 9:17 pm 

    It is impossible here to detail all of the fakery, humbuggery, lies and propaganda in the Torah/Pentateuch or the rest of either Testament.  Either you know what you are talking about or you don’t.

    The drivel about whatever a transmogrifried, transgendered and feminized Yeshuah/Jesus is fancied to have said is good only for use in political attacks.  But if anyone is looking for facts and what is necessary for survival, he must look elsewhere.  One might start with the Jesus Seminar’s The Five Gospels:  What Did Jesus Really Say?  The Search for the Authentic Words of Jesus and Robert Walter Funk’s The Acts of Jesus:  What Did Jesus Really Do?

  8. Theedrich on Mon, 8th Jul 2019 9:18 pm 

    No history of Christianity would be complete without mentioning the rumor that Jesus had been sired by a Roman soldier named Pantera.  In 1859, near Bingerbrück, Germany, road builders found the gravestone of a Roman soldier named Pantera, who had originally served in Syria:

    TIB(erius)·IVL(ius)·ABDES·PANTERA
    SIDONIA·ANN(orum)·LXII
    STIPEN(diorum)·XXXX·MILES·EXS(ignifer)·
    COH(orte)·I·SAGITTARIORUM·
    ·H(ic)·S(itus)·E(st)·
    Tiberius Julius Abdes, Panther
    from Sidon, 62 years of age,
    a soldier, former-standardbearer, with 40 years of service
    with the First Cohort of Archers
    lies buried here.

    The Cohors I Sagittariorum may have taken part in the suppression of a revolt in 4 B.C. after the death of Herod the Great, in which the city of Sepphoris, a few miles north of Nazareth, was destroyed by Publius Quinctilius Varus (famous for the loss of three Roman legions in the Teutoburg forest in A.D. 9).  Though uncertain, it is possible that the Cohors was stationed in Syria Palæstina until the year A.D. 6, when it was redeployed to Dalmatia and in A.D. 9 finally to Bingen (Germany), where it stayed from A.D. 43 to ca. 70.  It was, thus, in Germany that Pantera spent his last years.  (His gravestone is now in the Römerhalle in Bad Kreuznach.)  Given that, in official ceremonies, army standardbearers wore the pelts of animals as cloaks, the name “Pantera” (Latin for Greek pánthēr [πάνθηρ], “panther”) as a title-turned-name would be consistent with the image of a Roman standardbearer (signifer) wearing the pelt of a large predatory cat such as a leopard, lion or tiger.  According to early exegete Origen, the pagan philosoher Celsus was one who mendaciously repeated the 1st-century Jewish, anti-Christian idea that Pantera was the real father of Jesus.  (Cf. “Was Pantera Really the Father of Jesus?” by Jason Colavito at http://www.jasoncolavito.com/blog/was-pantera-really-the-father-of-jesus)

  9. Theedrich on Mon, 8th Jul 2019 9:19 pm 

    Nor do most Christians know of the first Jewish War (described by Josephus) which severed the Jesus movement from Judaism and created Christianity, nor about pseudoepigraphy through which most books of the New Testament were compilations under false names, nor about the “charter myth” of the Acts of the Apostles, a pious lie invented out of whole cloth, nor about Marcion, the author of the first New Testament (around A.D. 144) composed of an early (gentilized) version of Luke and ten letters of Paul, nor the four centuries it took to establish something resembling a “canon.” (See The First New Testament:  Marcion’s Scriptural Canon by Jason D. BeDuhn.  Also Dennis E. Smith and Joseph B. Tyson, Acts and Christian Beginnings:  The Acts Seminar Report, plus Bernard Brandon Scott’s The Real Paul:  Recovering His Radical Challenge.)

  10. Theedrich on Mon, 8th Jul 2019 9:20 pm 

    From all of this scholarship, we now know that Yid-Christianity is founded on a base of lies, deceptions, mistakes and misinterpretations, all re-shaped to fit the political dictates and hierarchy of the Roman Empire.  It is amazing that, out of this long-steeping stew, Western civilization eventually developed, starting with Catholic priests such as Copernicus (heliocentrism), Gregor Mendel (founder of genetics) and continuing through Georges LeMaître (first to imagine “Big Bang” cosmogony).

    However, this cradle of our civilization has now outlived its usefulness.  Continuing to follow its fantasies about universal love and genosuicide leads only to the end of evolution and life itself on this planet.  Yid-Christianity is no longer a help but a curse.  Indeed, it is now disintegrating before our very eyes.  Many Catholic priests and high prelates have been found to abuse young boys and even seminarians, giving a new twist to the Gospel saying, “let the little children come unto me.”  Perhaps in some fly-over locales the faith remains unaffected for the time being, but in the large metropolitan areas it is moribund.

    Helping this death process along is the fact that the Western Yidmedia deliberately ignore the widespread expulsion and mass-murder of Christians by Mohammedans in the Middle East and Africa.  The media silence on this killing and slaughter shows the complicity of the Western political and propaganda elites in the utter extinction of Christianity as the wetnurse of the West.  The result can only be more “refugees” attempting to overwhelm White countries, to the glee of the Bolsheviks.

    If Whiteland can be saved at all, it will be only through a new religion embracing blood and soil as its unsympathetic, unyielding and resolute foundation.

  11. claes on Mon, 8th Jul 2019 9:30 pm 

    theeeeeedrich, for gods sake keep it short, you are killing the message.

  12. claes on Mon, 8th Jul 2019 9:57 pm 

    Whiteland will survive. Maybe just in a corner of the world. But it will survive, just like greek culture survived the roman empire. And we are the greeks.

  13. Doc on Mon, 8th Jul 2019 10:25 pm 

    Someone is off their meds again..

  14. nostradamus on Tue, 9th Jul 2019 7:41 pm 

    Shale oil production is going to peak eventually. It could peak much sooner than anyone expects.

  15. Duncan Idaho on Tue, 9th Jul 2019 8:19 pm 

    Shale oil production is going to peak eventually.
    The Eagle Ford has peaked. The Bakken has been on a plateau for quite a while, and will decline soon.
    Can you say Permian? (Thats all you have)

  16. nostradamus on Tue, 9th Jul 2019 8:35 pm 

    Thanks for that Duncan.

  17. Coffeeguyzz on Wed, 10th Jul 2019 12:53 am 

    Duncan
    The Director of North Dakota’s DMR – Lynn Helms – just said that North Dskota production should shortly get to 1.6 million barrels per day (currently just under 1.4).
    The biggest reason for the current plateau is the gas flaring limitations.
    2 new gas plants are coming online shortly.
    DAPL owner is increasing capacity from 570,000 bbld to 1.1 MMbbld.
    Two other pipelines are being proposed to run down Wyoming, ND, and CO.

    I will never understand why so many people simply look at production numbers on graphs and make analysis when they posses no awareness whatsoever of what is going on in the real world.

    The incredible buildout of both takeaway pipe from the Parmian and the rush to build more export terminals ensure growing Permian production for years to come.

  18. Davy on Wed, 10th Jul 2019 1:05 am 

    Go away Nony. Stupid non REAL Green non Adaptational dumbass.

  19. marmico on Wed, 10th Jul 2019 4:38 am 

    Coffee, what’s the thermal efficiency of the new technology ANGCC relative to NGCC?

    ANGCC construction costs are lower per unit of capacity.

    https://www.eia.gov/todayinenergy/detail.php?id=39912

  20. Coffeeguyzz on Wed, 10th Jul 2019 11:01 am 

    Marmico
    For several years, the Combined Cycle plants (Siemens, GE, Mitsubishi) touted efficiency as ‘near or ‘approaching’ the 60% threshold depending on many factors.

    GE Power site is claiming 64% combined cycle efficiency for their – currently – 39 units operating.
    62/63 per cent heading towards 65+% is what their boosters are touting.

    As you probably know, the staffing requirements for operating these 1,000/1,500 Mw plants typically run 20 to 30 fulltime staff with contractors brought in as required.
    The fact that these operating costs are SO minimal compared to competing sources of power generation is a big reason why they are virtually taking over the markets.

    On a global scale, the incredible speed, flexibility, and low cost of FSRUs in providing LNG virtually anywhere is buttressing the rapid spread of this form of power generation.

    World’s largest FSRU – Challenger – is to depart Turkey and set up shop in Hong Kong in the coming months.

  21. Anonymouse on Wed, 10th Jul 2019 1:46 pm 

    RoFLMaO.

    Really Nony? You doing back and forth with yourself again? Hey I got an idea, why not have ‘Econ101’ join in as well.

    Retard

  22. Anal black hole on Wed, 10th Jul 2019 1:50 pm 

    Anonymous, has anybody told you how stupid your comments are?

  23. More Davy Sock Puppetry on Wed, 10th Jul 2019 2:01 pm 

    Anal black hole on Wed, 10th Jul 2019 1:50 pm

  24. Anonymouse on Wed, 10th Jul 2019 3:14 pm 

    Question for you dumbass, do you ever post anything under your actual name anymore? Besides those turgid bloviating turd-salads and ZeroIQ junk that no one reads that you continue to crank out that is.

    And dont you find it the least bit hypocritical and or weird posting a fake message under a name like Anal black hole? Nony is a sock puppet having conversations with himself (again). A perfectly legitimate thing to point out, as it is considered rather bad form have fake conversations with your own sock puppet. You would realize these things if you were not such a complete and utter douche-bag yourself Davytard.

    Of course you dont find it hypocritical at all do you. That is because ‘Nony’ taught you everything you know lol. I guess since you regard him as your mentor, leaping to his defense is just a reflexive response. Nice touch using the fake name. Nony must be so proud of you right now prick-face.

  25. JuanP identity theft on Wed, 10th Jul 2019 6:51 pm 

    Anonymouse on Wed, 10th Jul 2019 3:14 pm

  26. makati1 on Wed, 10th Jul 2019 6:52 pm 

    Anon, Nony has taught me many things about the oil complex, why are you so mean to him?

  27. Anonymouse on Wed, 10th Jul 2019 6:54 pm 

    Mak, I learned from Juan on the best ways to stalk and to ad hom people. Almost all my comments are stalking ad homs. Try it mak and between the three of us we can own this forum.

  28. More Davy Identity Theft on Wed, 10th Jul 2019 6:55 pm 

    makati1 on Wed, 10th Jul 2019 6:52 pm

  29. More Davy Identity Theft on Wed, 10th Jul 2019 6:56 pm 

    Anonymouse on Wed, 10th Jul 2019 6:54 pm

  30. More Davy Child Like Behavior on Wed, 10th Jul 2019 7:02 pm 

    JuanP identity theft on Wed, 10th Jul 2019 6:51 pm

    “Anonymouse on Wed, 10th Jul 2019 3:14 pm”

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