The energy market has reached a tipping point as clean energy technologies have seen dramatic reduction in prices over the past decade and have become the least cost option for the US power market.
In the past few decades, natural gas has been taking on a larger share of electricity production in the US as it is cheap and plentiful compared to coal. Given the rise in demand for natural gas, 68 gigawatts of new gas plants have been proposed. However, according to the latest report from the Rocky Mountain Institute, by 2035, it will be more expensive to run 90% of gas plants being proposed in the U.S. than it will be to build new wind and solar farms equipped with storage systems (Baker, 2019). The comparison is valid as it looks at the economics of gas plants against a “clean energy portfolio”, or better a bundle of renewable technologies that together provide the same energy, capacity, and flexibility as the proposed gas plants (Levin, 2019).
Furthermore, according to Lazard’s Ltd analysis from 2017, merely keeping an existing coal plant running can cost $26 to $39 and a nuclear one $25 to $32 per megawatt-hour, while building and running a wind utility scale farm can cost $30 to $60 per megawatt-hour over its lifetime - when factoring in subsidies, this can drop as low as $14 (Malik, 2017).
Growth in the renewable energy sector is weakening the economic case of operating gas power plants and pipelines. With solar and wind commercialization, pipe utilization will keep falling, while costs to deliver gas will likely increase dramatically. Therefore, this is not a very sustainable prospect for investing in new gas plants and pipeline construction at the present time. The sustainable choice, both financially and environmentally, would be to divert as much investment as possible towards new renewable utility-scale solutions.