Trump Needs to Understand the Nation Requires Renewable Energy Sources, Reinforced by Natural Gas
The incoming Trump administration aims to boost prosperity by reliance on the country's traditional energy sources, such as natural gas. The nomination of John Doe, who heads a shale gas production company, to head the U.S. Department of Energy, signifies this commitment.
Natural gas has drastically altered America's energy scene, enabling the country to become a net exporter and swap coal-fired generation with cleaner fuel options. Despite natural gas currently controlling the nation's electricity portfolio, renewable energy sources are the most rapidly growing segment in the U.S.
Notably, these two energy sources can complement each other. When the sun isn't shining or the wind isn't blowing, modern peaking plants driven by natural gas can activate within a minute, ensuring a consistent electricity supply. These gas engines can function between 10% and 30% annually.
"I'm a business leader, and Trump will have a complex agenda," says Håkan Agnevall, chief executive of Wärtsilä Corporation, in a virtual conversation. "When we talk about the shift to renewables and decarbonization, we must consider the social aspects: People need jobs and a future. If we phase out coal, people will need new jobs. The question is, how do we make that transition? The economy has many interconnected parts, and the president will do many things simultaneously. We need affordable energy, and we must endure as a planet. But there is no simple answer. Green is not black or white."
According to the National Bureau of Economic Research, a 1% increase in "fast-reacting" fossil fuel technologies results in a 0.88% increase in green energy over the long term.
Flashback to 2015. Trump pledged to reinstate coal to its pinnacle position in America’s energy hierarchy while disparaging renewable energy and abandoning the Paris Climate Agreement. However, renewables are now the cheapest form of energy, accounting for 24% of electricity generation, surpassing coal in this country. Meanwhile, natural gas makes up approximately 46% of the electricity portfolio--the fuel that has replaced coal-fired generation.
President Biden had a plan to replace those lost jobs: According to Energy Innovation, the Inflation Reduction Act, Bipartisan Infrastructure Law, and CHIPS and Science Act sparked over $500 billion in private investments while creating over 6.2 million new jobs.
Coal Country Has Been Through Enough Suffering
Coal country has experienced its benefits. For instance, Nucor Corp. stated that it would purchase 250 megawatts of solar energy from NextEra Energy Resources for a steel plant it is building in Kentucky. The electric battery maker SPARKZ is building a 482,000-square-foot factory in Bridgeport, W.V., which will hire at least 350 people and produce batteries for forklifts and farm equipment.
Meanwhile, West Virginia sits atop the Marcellus Shale basin, which contributes to 95% of the state’s gas production. In 2019, the state produced more natural gas than coal, exporting gas from the basin to the Northeast, Midwest, and Gulf Coast. The West Virginia Chamber of Commerce states that 20% to 25% of West Virginia’s jobs are indirectly tied to its energy sector, using the so-called multiplier effect, which accounts for suppliers and vendors.
Natural gas and renewables are mutually beneficial: They can work together to reduce global CO2 emissions while generating jobs. Wärtsilä's internal studies indicate that by including those "balancing power plants" powered by natural gas, we could save about $67 trillion by 2050. The study also concludes that we can reduce CO2 emissions by 21% by 2050--a substantial figure in the fight for net zero.
"Today, renewables are the most economical energy source," says Agnevall. "It is cheaper than anything else. But it has difficulties. We conclude that you cannot reach net zero just by using renewables. We need to balance power with natural gas. If we don't use natural gas to balance the renewables, we will spend more money--equivalent to 2% of the world’s GDP. Using the balancing, we can phase out large coal plants worldwide."
The natural gas industry must be mindful of not jeopardizing its future. One significant challenge it faces is methane leakage, which is the most potent greenhouse gas. Marcelo Mena, Chile’s former minister of the environment, informed me, “If the industry doesn't reduce methane leaks, that will be an obstacle to a cleaner tomorrow.”
The Biden Administration has urged the natural gas sector to tackle methane emissions and has implemented several measures to address this problem. However, it's unclear how the Trump Administration will approach the issue.
As for Wärtsilä, it manufactures gas engines. Agnevall refers to Texas, the country's oil and gas hub. Despite this, it's also the nation's top producer of wind energy, accounting for 28% of the country's output. It's the second-largest producer of solar power and the second in the nation in terms of battery capacity. Natural gas enables it.
The executive adds that a decade ago, combined-cycle natural gas plants were predominately baseload facilities that ran 24 hours a day. Nowadays, 70% of natural gas plants balance power and support renewables, noting that the fuel is a bridge fuel that will endure decades, not a few years. Wärtsilä is also offering advanced energy storage services. It has installed 200 megawatts of such capacity in Texas.
According to Agnev Vall, the essential tools for transitioning are currently in existence. It's not reliant on a technology that's not available at present. However, there are certain constraints in establishing renewables, particularly in the wind energy sector. There's a need to establish pricing systems. It's crucial to establish a market for balancing power as well.
Biden's energy approach varies from Trump's, who still can't disregard the importance of renewables in today's electricity mix and climate objectives. Natural gas is contributing to the expansion of green energy—a fact that the incoming administration ought to recognize and endorse.
In light of the country's shifting energy landscape, business leader Håkan Agnevall emphasizes the importance of considering the social aspects of transitioning to renewable energy sources, such as job creation, when discussing decarbonization. Despite natural gas currently controlling the nation's electricity portfolio, renewable energy sources have become the cheapest form of energy, accounting for 24% of electricity generation and surpassing coal.
