July 7, 2012
Updated June 7, 2013
For decades, coal has been a steady, reliable source of fuel for electricity. But a contender to has joined the mix: natural gas, fed by new hydraulically-fractured wells across the country. A central question many are asking is, "Can natural gas lower carbon emissions for electricity generation?" To help answer that question, we head to gas-fed power plant.
Bill Day walks onto a platform at the Fayette Energy Facility. It’s a vast, warehouse-type building that’s about five or six stories tall. There’s actually a building in the building. Inside sits a turbine engine, the heart of the power plant.
“Yeah, it is similar to a jet engine design. It’s just much, much larger,” says Day.
Day is the plant operations manager. He’s been here since Duke Energy opened the facility near Masontown, Pennsylvania in 2003. He walks across the plant and points to the so called “power block.”
“We have two gas turbines that produce power by burning natural gas, and then the exhaust of those drives the steam turbine, so we have three turbines all together. Each has its own generator,” Day says.
This plant is more efficient than a coal-fired power facility because it captures waste heat and converts it to steam energy. For this reason, it’s called a dual cycle power plant. Running 24-7, it can power half a million homes, but for most of its nine years, the plant’s barely been used. That changed a year and a half ago when a surge in production of deep shale natural gas helped to send gas prices to new lows. Since then, it’s been running non-stop.
Every day at 4 p.m., Day gets an email from the grid, the public-private agency that controls the supply of electricity. In this region, the grid operator is PJM Interconnection.
“PJM can actually control our generators from their office by sending an electronic signal that will raise or lower the output, and our guys watch and maintain everything to make sure it’s safe and capable of doing that,” Day says.
Inside the Grid
This decision—about what kind of fuel powers the grid—is made far from Day’s plant, at PJM’s office complex near Philadelphia.
It’s no ordinary complex. To even get to the elevator, you’ve got to be accompanied by an employee. To see the underground dispatch center where PJM technicians keep the supply and demand of electricity in balance, you have to pass through a series of hallways and security checks. The cavernous control room looks a lot like a NASA operations center. Operators scan a wall of digital monitors that show the status of more than 1,200 power plants in the Mid-Atlantic and Midwest. As electricity demand goes up and down, they switch power stations on and offline.
The people in this building have two jobs: keep the lights on today and in the future. Stu Bressler is the vice president of market operations here. He says PJM auctions the rights for utility companies to supply electricity, and coal is having a tough time keeping up with natural gas.
“We operate a market three to four years into the future, and beginning with the auction we ran last May, which was for the period from June 1, 2014 to May 31, 2015, we saw about 7,000 megawatts of older coal-fired generation that did not clear that auction.”
That means that coal was actually pricier than fuels like natural gas. PJM recently held an auction for the electrical supply for 2015 and 2016. The big winner? You guessed it, natural gas. That's from plants that aren’t even built yet, just planned. PJM, which controls about one-fourth of coal-fired generation in the United States, calls this shift from coal to gas “massive and unprecedented,” but the shift isn’t just based on supply and demand.
Coal's Many Hurdles
Michael Zenker is an energy analyst with Barclays, a multinational bank. He says gas and coal are competing in a stagnant market where there’s not much growth in demand for electricity. Zenker says anything that increases the cost of generation can shift the power mix. New environmental regulations for mercury and other pollutants call for coal plants to make expensive retrofits to meet emission standards.
“When gas prices were much higher, we saw most of the coal fleet that’s subject to these regulations go through the costly upgrades that are required. You may find that more operators are going to decide to throw in the towel,” Zenker says.
In fact, one in ten coal-burning power plants in the United States is expected to be shut down in the next few years.
Natural Gas Gains on Coal
Gas hasn’t exactly run coal off the corner, but it’s encroaching. Coal still cranks out about 40 percent of the power in the United States. But just four years ago, it was generating nearly half. The switch, from coal to gas, has already lowered the power sector’s carbon footprint. That’s what Harvard professor Mike McElroy found when he studied the EPA’s numbers from 2009.
“It triggered a very significant change in the emissions of carbon dioxide from the U.S. power sector over and above the recession that was happening in the intervening 12 months. That’s actually a trend that’s continuing,” McElroy says.
That’s because gas, when it’s burned, has much lower carbon content than coal, and newer gas plants are more efficient than coal-powered utilities. McElroy’s research says the decline in carbon dioxide emissions was most pronounced in areas of the country that normally used a lot of coal, but also had gas-fired plants. That includes the Appalachian region.
The Department of Energy predicts that these trends will continue for the next 25 years. Because of this, and an increased reliance on renewables, and greater energy efficiency, the department forecasts carbon emissions won’t reach the level they were in 2007, the year carbon dioxide pollution peaked in the power sector. But Jay Apt, who studies the power grid at Carnegie Mellon University, says gas-powered electricity generation isn’t a panacea for our greenhouse gas woes.
“First of all, it has to be a bridge and not a plank you’re walking,” says Apt.
He says we need to act quickly on climate, and just firing up more natural gas power plants isn’t enough.
“We have to take 80% of the CO2 that we’re producing in the electric power system out. If we imagine a system in which we produce 80% of our electric power by natural gas, it still doesn’t get us there,” Apt says.
Wind, solar and energy efficiency will help. “It probably involves some nuclear and involves capturing the carbon from natural gas plants or coal plants,” Apt says.
EPA's Carbon Rule
Apt doesn’t think the EPA’s new carbon rule for power plants goes far enough. That’s because it pushes coal plants to use carbon capture and storage, but does not require natural gas plants to do the same. This fact has has made coal much less attractive, since carbon capture is untested and so expensive. No plants currently use it.
At Duke Energy’s gas-fired plant in Masontown, Bill Day says, don’t count coal out.
“As people build natural gas plants because gas is cheap, it’s going to drive the price up. It’s a constant balancing act, and I think if you don’t have diversity, you’re setting yourself up for trouble,” Day says.
Natural is helping reduce our carbon footprint, but to make a real dent in climate-altering emissions, utilities will have to stick with gas and renewables for decades. The big question is, will gas remain as cheap and plentiful as it is now?