And shouldn’t build pipelines either?
A May 21, 2018, press release from Rocky Mountain Institute says, “US electricity generators may be committing their customers and investors to as much as $1 trillion in future investment and fuel costs through 2030 as they rush to build new gas-fired power plants. Yet advances in renewable energy and distributed energy resources (DERs) offer lower rates and emissions-free energy while delivering all the grid reliability services that new power plants can, according to a new Rocky Mountain Institute (RMI) report, The Economics of Clean Energy Portfolios. According to the analysis, in addition to beating proposed gas-fired power plants on a levelized cost basis, ‘clean energy portfolios’ of renewables and DERs will also increasingly threaten the profitability of existing gas plants.”
Writing in Power for the People VA on June 5, 2018, Ivy Main asks, “Dominion won’t build new baseload gas plants. So why is it still building the Atlantic Coast Pipeline?” She points out that, “Utility giant Dominion Energy and gas turbine maker General Electric reportedly agree on a startling fact: there is no market for new baseload gas plants,” and notes that new combined cycle plants are noticeably absent from Dominion Energy Virginia’s Integrated Resource Plan this year. She discusses RMI’s report, and says that, “as early as 2026, cost declines for wind and solar will make it more expensive to operate natural gas infrastructure than to abandon it and replace it with new wind and solar facilities. When that happens, gas plant owners will be left with stranded assets. Even in today’s market, RMI concludes gas is a risky investment.” The RMI report’s conclusions are “very bad news for the Atlantic Coast Pipeline.”
She concludes, “The problem for Dominion Energy is that the ACP is the only big trick it has now, after the failure of its own ambitions for new nuclear. Dominion doubled down on natural gas in 2016 when it paid 4.4 billion dollars for natural gas distribution company Questar, paying a 23% premium on the deal. It can’t back down from gas now. Either it has to spend 6 billion dollars (and rising) on this new pipeline, or admit its entire growth plan was based on a serious mistake. Abandoning the ACP could make Dominion’s stock price tumble, giving it something else in common with GE. But as the saying goes, if you find yourself in a hole, you should really stop digging. In this case, literally.”
Read Utility Dive’s article commenting on the Rocky Mountain Institute report.
Read the Rocky Mountain Institute press release on the report .