An American institute estimates that in fifteen years, the construction of new wind and solar farms will be less expensive than the operation of gas plants. In other words, the energy produced by the wind and the sun will be cheaper than that obtained through natural gas.
A reversing trend
As Bloomberg explains in an article on September 9, 2019, natural gas is a real success across the Atlantic. Over the past two decades, the share of this resource in the US energy mix has increased from 20 to 35 percent. This development is due to the very good performance of gas plants, but also the use of hydraulic fracturing. This method of extracting gas makes it possible to reduce costs, although this is not very appreciated on an environmental level.
And yet, the deal could change in the face of renewable energy, according to a report published by the Rocky Mountain Institute (RMI) located in Colorado (United States). According to researchers’ estimates, it will be more expensive to operate 90% of US gas plants by 2035 than to build solar and wind farms with their storage systems.
The gas sector is worried about
You must know that the RMI researchers did not mince their words. According to them, this cost transition will be so fast that the gas plants currently planned will become economically unproductive even before they have been able to complete the repayment of the credits related to their construction! The leaders of the study reached such conclusions by studying the costs of producing 68 gigawatts on US soil. However, these costs were evaluated for the same amount of energy in the case of natural gas and then in terms of wind and solar energy.
This study sounds like a kind of warning for big companies in the gas sector. Conversely, actors positioned on renewable energies see this as a source of hope. For example, grants could be more often allocated to renewable energy projects if they prove to be more financially viable. Is this the beginning of the end for fossil fuels? The future will tell us very soon!
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Colin has been working in the business industry for quite a sometime and he recently made the decision to become a full-time business journalist. At Daily Research News, he also helps us take care of the business writing.