Gas-powered generation continuing to be bumped!

Carl Daley
Carl Daley
Gas-powered generation continuing to be bumped!

Gas-powered generation was expected to be the main transition fuel from coal-fired generation but has a track record of being bumped in the queue. Looking forward, will gas powered generation ever have a major role?

Going back 20 years or so, the conventional wisdom was that gas-powered generation would be the transitional fuel from coal-fired generation to renewables but the renewable sector wasn’t quite ready in terms of cost and technology. Such wisdom has proven to be incorrect.

Up until 2010, gas-powered generation increased across the NEM, but since this time renewable wind farms, solar farms and roof-top solar have grown at a much faster rate aided by the Renewable Energy Target and a falling cost curve. By 2019, renewable wind and solar generation provided 73% more energy across the NEM than gas powered generation. For 2020 year-to-date, renewable generation has produced 120% more energy than gas powered generation.

Energy Production of Gas vs Wind/Solar

Looking at the 2020’s, gas-powered generation is likely to be bumped again, and be a much smaller contributor than originally conceived. Other fast start technologies such as battery storage and hydro are shaping up to fill the market need for fast-start plant and ancillary service providers. According to Committed and Proposed generation projects listed with AEMO, gas powered generation capacity represents 3,330 MW, battery storage represents 6,160 MW and hydro represents 7,900 MW; it should be noted however, that each MW of gas-powered generation can produce more energy than battery storage and hydro pump-storage. Also, not all these so-called Committed and Proposed projects will proceed.

It looks the 2020’s will be when battery storage systems will make their mark (Lithium Decade), driven by grid-scale and behind-the-meter applications. The feed-in rate for Solar PV is expected to crash, and this will drive further interest in behind-the-meter energy storage systems aided by a falling cost curve. Consequently, gas-powered generation will be largely bumped by other technologies.

By the time 2030’s arrive, gas-powered generation will potentially have a new competitor in the form of Hydrogen. Will gas-powered generation be bumped again?

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