clock menu more-arrow no yes mobile

Filed under:

The missing puzzle piece for getting to 100% clean power

It’s about using renewable energy to make gas.

natural gas power plant
A natural gas power plant — perhaps not evil?

Across the country, dozens of cities and states have passed laws or resolutions targeting 100 percent carbon-free electricity — most recently 20 communities in Utah and the state of Virginia.

But is it even possible to power a modern economy with a carbon-free grid? And if so, what are the best energy sources and technologies for getting there?

These questions have been the source of raging debate among energy wonks for many years but have moved closer to mainstream political discourse since the introduction of the Green New Deal. (For a brief introduction to the terms and players involved in the debate over 100 percent clean electricity, see here and here.)

Now there is a growing list of jurisdictions that face stringent emissions targets in years ahead and urgently need to figure out answers. We’ll discuss the most notable such jurisdiction, California, and a cool new(ish) technology that may help it reach its 100 percent target.

First, though, let’s look at the problem to be solved: the dilemma that comes with an energy grid run mostly on renewable sources of energy.

Renewable energy needs dispatchable generation and long-term storage

The core issue is variability. Whereas fossil fuel power plants can be turned up or down to meet demand (they are “dispatchable,” in the lingo), the big sources of renewable energy — sun, wind, and water (hydropower) — cannot. They come and go on nature’s schedule. Sun disappears each night and on cloudy days. Wind and precipitation vary daily and seasonally. All three show longer-term variations over years and decades.

All these variations in supply cannot be controlled by power grid managers, so they must be accommodated.

To some extent, sun, wind, and water balance one another out; where it is not sunny, it is often windy. With a good national transmission system, renewables could supply up to 60 percent, maybe 80 percent of electricity in the US, but after that, things get expensive and something else is needed to fill the gaps.

california’s duck curve.
The “duck curve” of demand created by renewable energy on the grid.

But what? Coal plants emit carbon, so they can’t be part of a clean grid. Nuclear plants are not very good at gap-filling — they are big, relatively slow, and expensive to ramp up and down. (Though nuclear proponents argue they are better than they’re given credit for.)

In practice, most places in the US with high penetrations of renewable energy (like California) fill the gaps with natural gas plants, which are smaller and more nimble than coal or nuclear plants. But natural gas is a fossil fuel, and if its emissions are not captured and buried, it can’t be part of a net-zero-carbon grid either.

Is there a carbon-free way to fill the gaps? This is where the debate comes in. Some renewable energy advocates argue that the gaps can be filled with energy storage, what at least at the moment mainly means batteries. But getting to 100 means covering for any foreseeable seasonal or even decadal dip in renewable sources, which means a lot of batteries. Without some other, cheaper form of energy storage, which can hold more energy for longer, that gets expensive.

Some people take this to mean that 100 percent clean electricity can’t be done. Some use it to argue that small nuclear plants will be necessary. Some argue that coal or natural gas plants should stay online, with their emissions captured and buried, or that biomass electricity generation (which can conceivably be carbon-negative) should scale up.

And that’s where the debate typically gets stuck. But there’s a new(ish) energy technology on the scene these days that promises a neat and satisfying resolution to the variability dilemma. It’s called power-to-gas, or PtG.

A new study argues that PtG could help California, and by implication other jurisdictions aiming for clean grids, reach ambitious clean-energy targets without spiking electricity costs. If that’s true — and to some extent, whether it’s true depends on policy choices made in coming years — it could make the 100 percent target safer, luring other jurisdictions to jump on board.

Let’s take a look at PtG, what it is, and how it could help.

Natural gas storage and pipelines.
Natural gas storage and pipelines.

Renewable energy can make its own dispatchable generation and long-term storage

Remember the dilemma at the heart of renewable energy: variability. As a place like California puts more solar and wind power onto the grid, the grid begins experiencing more short- and long-term swings — more gaps that must be filled by energy resources that are dispatchable.

Ideally, what a renewables-heavy grid needs is a source (or carrier) of energy that can sit idle for long periods but jump in at a moment’s notice to supplement a flagging supply of sun or wind. A clean grid needs backup energy that can be stored for long durations, in large quantities, but can be quickly available.

There is one technology that perfectly fits that bill: natural gas, i.e., methane.

Methane is itself an extremely stable form of stored energy. Unlike the chemical energy stored in lithium-ion modules, which leaks over time, natural gas can be stored indefinitely. The system of natural gas storage reservoirs and pipelines in the US is thus akin to a giant, distributed battery. And natural gas power plants are (to continue the electricity metaphor) the inverters that convert the stored energy into useful electricity.

A sprawling battery with enormous capacity that can produce electricity at a moment’s notice: That’s perfect for renewable energy. Except for the whole carbon-emissions thing.

Wouldn’t it be nice if there were a carbon-neutral form of gas, so that California could make use of its massive gas “battery” to back up renewable energy without adding any carbon to the atmosphere?

That’s where PtG comes in.

Fossil fuels are hydrocarbons, and hydrocarbons are just hydrogen and carbon. If you can gather hydrogen and carbon dioxide separately, you can combine them through “methanation” to produce synthetic natural gas.

The carbon intensity of the synthetic gas depends on where the hydrogen and carbon dioxide come from.

Currently, most hydrogen is produced through steam reforming of natural gas, which is energy- and carbon-intensive. But it can also be produced through electrolysis, which uses electricity (ideally generated by wind and solar) and a catalyst to free hydrogen directly from water. About 4 percent of current hydrogen is made through electrolysis. Nuclear power plants can also be used to make hydrogen — it’s one avenue being discussed to give existing nuclear plants stable markets and enable them to stay running — but that’s not happening yet at any scale.

The carbon dioxide can be dug up from natural reservoirs, but digging carbon out of the earth is hardly carbon-neutral. CO2 can also be captured from the waste streams of industrial facilities and power plants, or captured from the ambient air itself through direct air capture (DAC).

direct air capture (DAC) of carbon dioxide
A direct air capture (DAC) plant.
Carbon Engineering

If the hydrogen comes from hydrolysis powered by renewable energy or nuclear power, and if the carbon dioxide is captured from the ambient air, then the synthetic methane produced is carbon-neutral. Carbon is pulled out of the air and returned to the air when the methane is burned — no net gain or loss.

And the process is driven, ultimately, by renewable energy. It is a way for renewables to create their own long-term energy storage and dispatchable generation, their own backup, which they can leverage to ratchet up and grow further.

If PtG takes off, there are many ways the resultant gas could be used — heavy industry, residential heating, and transportation will probably be first in line — but let’s focus here on what it could do for the electricity system.

PtG reduces the cost of an all-renewables electricity system

The global energy services company Wärtsilä, headquartered in Helsinki, Finland, recently released a white paper arguing that California could reach its ambitious goals for the electricity sector — 60 percent renewable energy by 2030, 100 percent carbon-neutral by 2045 — more quickly and cheaply through PtG.

Using the same Plexos energy simulation software used by California regulators, Wärtsilä modeled three scenarios for the future of the state’s grid.

The first is the state’s current plan, as reflected in its integrated resource planning (IRP) process through 2030 and then using “high electrification” projections through 2045. This scenario relies heavily on solar, wind, hydro, and batteries. Notably, the current plan does not reach full carbon neutrality by 2045 (more details on that later).

The second is the “optimal path.” In the early years, it builds out solar, wind, and batteries somewhat faster than the current scenario, but post-2030, it relies more heavily than the current plan on thermal plants, i.e., plants that burn stuff to generate electricity. It retires existing natural gas plats more slowly, keeping the more flexible ones open, and it builds out a lot of small, fast natural gas power plants. All these natural gas plants are converted to synthetic methane when it is available from 2030 forward. The optimal path reaches full carbon neutrality by 2045.

The third scenario is an extension of the first; it is the current plan on steroids. Relying purely on renewables and batteries, it banishes all thermal plants from the grid and reaches total carbon neutrality by 2045.

Spoiler: The second scenario, as its name would suggest, wins. The use of PtG makes the 100 percent target cheaper and reduces more carbon emissions along the way.

Using a small number of PtG plants avoids the need for a whole bunch of extra renewables

California’s current scenario relies on overbuilding renewables, which requires a lot of land for all those solar and wind farms. That is no small thing, as California, like all states, is beset with NIMBYs and bureaucracies that make siting and building renewable energy plants endlessly difficult.

By using a small number of natural gas plants (eventually burning synthetic methane) to fill the gaps rather than overbuilding renewables, the optimal scenario requires less total built capacity: 237 gigawatts in 2045, versus the current plan’s 263.

ca capacity Wärtsilä

By reducing the amount of solar capacity needed, the optimal scenario reduces the new land needed by a third, from 900 square miles to 600. That represents hundreds of NIMBY battles avoided and hundreds of new grid hookups that won’t need to be approved.

The optimal scenario also reduces costs relative to the current scenario. In 2045, the current scenario would result in a levelized cost of electricity of $51 per megawatt-hour; in the optimal scenario, it’s $50. That’s not a huge gap, but over the years it adds up to an almost $8 billion cumulative difference.

ca power cost
Yearly costs.

One other benefit of keeping a few gas plants around is that they reduce the amount of wind and solar power that must be “curtailed,” i.e., wasted. First, they reduce the need for overbuilding. Second, PtG can serve as a load for all that excess renewable energy. When wind and solar are producing more power than the state can consume — a more and more common occurrence as they expand — all the surplus power can be channeled into making synthetic methane.

From 2020 to 2045, the optimal scenario makes use of over 500 terawatt-hours of power that would have been wasted in the current scenario.

CA curtailment

So the optimal scenario seems somewhat more efficient and cleaner that the current scenario. But here’s the most revealing part.

Getting to 100 percent without dispatchable thermal plants is hella expensive

Recall that the current scenario does not quite get to full carbon neutrality by 2045. California law requires that all power bought and sold in the state be carbon-neutral by 2045. But there are also transmission losses. An average of about 8 percent of energy is lost as it is carried around the state, so for customers to receive 100 MW, a utility must generate 108 MW.

That extra 8 percent does not have to be carbon-neutral. The state’s current plan envisions it being supplied by natural gas plants, leaving California about 4 or 5 percent carbon-positive. That’s why, overall, the optimal scenario, which reaches true carbon-neutrality by 2045, reduces 124 million tons more CO2 than the current path.

ca emissions
Carbon emissions.

This raises the question: What would it take to boost the current scenario so that it did get all the way to net-zero carbon?

That’s what the third scenario is about. It models a California electricity system with no thermal power plants at all, relying entirely on renewables and batteries. The results are pretty eye-popping. It’s technically possible, but damn is it expensive.

If the current scenario relies on overbuilding solar, the third scenario relies on overbuilding batteries. Really overbuilding them. Check out how much capacity would have to be installed through 2045.

ca capacity Wärtsilä

This is what critics have been saying: If all you have to work with is renewable energy and batteries, filling that final gap from 95 to 100 percent carbon-neutral requires installing tons and tons of batteries. You need enough battery capacity to cover even the most unlikely, once-a-decade extended shortfall of wind and sun, but most of the time, in ordinary circumstances, most of that capacity won’t be used — the battery “capacity factor,” or frequency of use, falls to 3 percent by 2045 in the third scenario. Energy assets that spend most of their time sitting there, unused, make for dismal economics.

Recall that the optimal scenario would have California electricity at $50/MWh in 2045. In the third scenario, it would be $128/MWh, well more than double. Installing all those batteries is expensive.

PtG is still fairly speculative, but it sure looks like it could help

Power-to-gas is a rapidly developing and endlessly interesting area. It’s been around for a long time — various forms of synthetic gas date back 180 years; it was popular during World War II when gasoline became expensive — but the carbon-neutral versions developing today, explicitly designed as tools for decarbonization, are relatively new.

There have been lots of PtG studies and pilot projects, especially in the EU, but the pieces have not come together for it to start scaling up in earnest.

The Wärtsilä modeling uses performance and cost numbers for PtG drawn from the renewable fuels group at the Lappeenranta University of Technology in Finland, but it’s worth emphasizing that all such numbers are somewhat speculative. The ultimate costs of PtG depend on the costs of direct air capture of CO2, the costs of green hydrogen, and the costs of renewable energy itself. The first two, in particular, are under furious development and difficult to predict.

It’s also worth noting that there is a school of thought that says the extra step of converting hydrogen into methane isn’t worth it — that instead, hydrogen should be stored and combusted in power plants directly, without the intermediary step. “My prejudice is that, in the long-term, switching to hydrogen will be easier and make more economic sense,” Tom Brown, leader of the energy modeling group at the Karlsruhe Institute of Technology, told me, “and we should limit methane to sustainable biogas resources.”

There is already a network of hydrogen pipelines, worldwide and in the US, and natural gas pipelines can be converted to carry hydrogen. Germany, for instance, is planning for a nationwide hydrogen network:

And companies like GE are already investing in gas turbines that can run on either methane or hydrogen. Given that only a comparative handful of thermal plants are required to stabilize renewable energy, perhaps they should just burn the green hydrogen directly. (“Hydrogen was not considered as a direct fuel source,” the Wärtsilä folks told me, “because there is no way to estimate the cost of hydrogen infrastructure needed.”)

It’s too early in the game to predict which “firm” (always available) resource will prove to be the best carbon-free complement to renewable energy. It could be synthetic fuels or hydrogen, small nuclear, advanced geothermal, biomass with CCS, natural gas plants using the Allam cycle to capture their emissions, or some mix.

What Wärtsilä has convincingly shown, as echoed in previous academic research, is that some firm resource will be necessary, or at least extremely helpful, to get to a fully carbon-neutral electricity system. A renewables-heavy grid needs backup resources that are always available and can be quickly turned on or off, up or down, as needed. For now, batteries can’t store enough energy or hold it long enough to serve as sole backup for a large system like California’s — at least not without breaking the bank.

Other firm and flexible resources are needed to complement renewables and batteries. The grid doesn’t necessarily need a ton (look how small the orange “flexibility” bar is on the graph above), but having even a small amount ends up avoiding the need for tons of overbuilt capacity.

It’s difficult to know at this stage which firm, low-carbon resources will be cheapest when they become more necessary post-2030. It is worth researching and developing every form that has even a plausible chance of success. Different ones may prove to be more or less competitive in different geographic areas.

But hydrogen and hydrogen-based fuels like synthetic methane are my favorites, the ones I believe warrant the most intense research, development, and deployment. For the most part, that’s based on expert research and current developments in the field, but I will confess that at least some part of it is, for lack of a better word, aesthetic.

There is just something satisfying about the thought that, to make electricity in the 21st century — a century to which electricity will be absolutely central — we no longer need to dig anything up or cut anything down. We don’t need fossils, we don’t need plants, we just need the wind, sun, and water. Insofar as a system based on renewable energy needs firm resources, it can make its own, through green hydrogen or PtG. It is a closed loop, based on Earth’s present-day energy budget, with zero net carbon emissions and radically less air pollution.

power to gas system Wärtsilä

Wärtsilä’s study should, at the very least, awaken California legislators and regulators to the crucial role that green hydrogen and/or PtG could play in holding down the costs of a fully carbon-neutral electricity system. If hydrogen and hydrogen fuels are to play that role, they need aggressive policy support to accelerate their progress down the cost curve.

To begin with, Wärtsilä suggests allowing sustainably sourced PtG to qualify as renewable fuel, and power generated from it as renewable energy, under California law. And it recommends that the only new thermal generation permitted be small (under 100 MW) and nimble, able to start or stop quickly multiple times a day, while consuming no water. These and what remain of existing natural gas plants could be converted to synthetic methane when it becomes available; by 2045, when the state hopes to be carbon-neutral, only synthetic methane (and perhaps some biomethane) would remain in the pipeline system.

Meanwhile, to support hydrogen and hydrogen fuels, the federal government should plow money into R&D, pilot projects, and deployment subsidies; institute market-pull policies like a national renewable fuel standard (RFS); and support their growth through government procurement.

The puzzle of a carbon-neutral power grid has been missing a puzzle piece, a firm resource that can reliably and cost-effectively back up large amounts of renewable energy. Power-to-gas just might fit.

Sign up for the newsletter Today, Explained

Understand the world with a daily explainer plus the most compelling stories of the day.