July 02, 2013

Brattle Report on the Relationship between Natural Gas and Renewables Cited in POWER Magazine Article

A recent article published in POWER Magazine provides a synopsis of a recent report by Brattle economists that discusses how, contrary to widespread suggestions that abundant supplies and low prices for natural gas are pushing out wind and solar, the resources are in fact long-term allies that may force other generation to the sidelines in the future. The report was sponsored by the Texas Clean Energy Coalition (TCEC), and focuses on the Electric Reliability Council of Texas (ERCOT).

The recent fall in natural gas prices has led to concern that cheap gas-fired power is undercutting incentives to build renewable capacity. The report argues that this concern focuses too much on renewable capacity installation costs and ignores both its advantages and the significant synergies that exist between gas and renewables. In the short term, despite low gas prices, renewables are called upon first, especially in competitive markets, because they have the lowest variable costs. Although the report focuses on the ERCOT region, its insights are applicable in other states and countries.

The article, “Natural Gas and Renewables Are Allie, Not Adversaries, Says Report,” discusses the report’s finding that both gas and renewables can be utilized as complementary resources, depending on the time frame as well as additional factors, such as the long-term path of gas prices, renewable technology costs, electricity market rules, and policies affecting all power generation technologies.

The report, “Partnering Natural Gas and Renewables in ERCOT,” was authored by Brattle principals Peter Fox-Penner, Jürgen Weiss, and Ira Shavel, and Senior Policy and Marketing Analyst Heidi Bishop. To view the report, please visit the TCEC website.

To read the article in its entirety, please visit POWER Magazine’s website.

Associated Experts
Shavel 087
Principal
+1.202.955.5050
Dr. Shavel is an energy economist specializing in the economics and operations of the U.S. electric power system, generation and transmission investment, and environmental strategy. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Jurgen weiss0492
Principal
+1.617.864.7900
Dr. Weiss specializes in issues broadly motivated by climate change concerns, such as renewable energy, energy efficiency, energy storage, the interaction between electricity, gas and transportation, and carbon pricing. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Fox penner 131
Academic Advisor
+1.202.955.5050
Dr. Fox-Penner specializes in economic, regulatory, and strategic issues in network industries. His practice centers on energy and environmental policies and electric regulation, planning, and competition issues. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4