Why Fracking May Support Renewables

Posted on


Hydraulic fracturing, or fracking, is shunned by the environmentalists that laud renewable energy sources. However, by not supporting both initiatives, they may be working at cross purposes. Natural gas, booming largely because of fracking, complements renewable energies on the grid. The two seemingly opposite technologies are, for the moment, inextricably linked.

Renewable energies like solar and wind produce most of their output at times of the day when not that many people need it. Peak demand for electricity is usually in the morning and evening. Solar production is highest during the middle of the day and afternoon, and wind reaches its highest production at night. Because there is no large-scale economical way to store that energy and reconcile the misaligned supply and demand, most of our peak demand must still rely on non-renewable fuel sources.

Electricity outputs from burning different fossil fuels also have different characteristics. Output from coal-fired plants is particularly inefficient to ramp up and down to meet changes in demand. However, natural gas-fired plants can quickly meet those hourly variations. Some natural gas can even ramp up or down at a moment’s notice to meet minute-to-minute fluctuations

During most of the year in Northern states, energy consumption peaks first in the morning as we all take showers and get ready for the day, then levels out during the midday. It peaks again more dramatically in the evening hours as we flip on computers, televisions, ovens, microwaves and water-heaters. Demand finally drops down to base load, or minimum demand, at night. Some states use Demand Response programs to smooth out demand by making electricity cheaper on off-peak hours, thereby disincentivizing peak use. However, even the best program can’t eliminate all variability in power demand.

Base load in most parts of the United States is still provided by coal plants or nuclear plants. Because both are slow and inefficient to ramp up — though very efficient once at full capacity — they have contractual minimum run times that can last several days. In contrast, large, efficient combined-cycle natural gas plants, which can often be ramped up in half an hour, are used to accommodate these relatively predictable hourly changes. More renewables, however, lowers the predictability of the total energy supply.

The wholesale price of electricity is measured by marginal cost, with the cheapest going on line first. Because renewables are essentially free to switch on, they’re the lowest part of the order, or supply stack, and are automatically connected to the grid. The minute-to-minute variations in solar and wind output from cloud cover or interrupted winds adds another layer of variability to the inescapable daily variation in renewable output.

That variation within daily variability is met by either gas- or oil- fired peaking units, named for their ability to meet fluctuations in peak demand quickly. While gas-fired peaking units are less efficient than their large combined-cycle counterparts, most of them are capable of ramping up to full output within just a few minutes to offset either an unexpected or expected fall in renewable production. Large natural gas combined-cycle units are ostensibly cleaner than coal plants and the same is true of gas-fired peaking units versus their oil counterparts.

When all options were available, hydroelectricity is actually the perfect way of compensating for variation in renewable production. Hydro power ramps up nearly instantaneously, emits few greenhouse gases, if any, and has almost no marginal cost, which determines electric wholesale prices. However, it is limited both to specific locations and in total quantity. Only 6 percent of American electricity is generated by hydropower, and most of it is consumed within state lines.

As gas prices have plummeted from the fracking boom, natural gas is becoming more attractive. Fracking cracks open deep hard-packed reserves of petroleum, and horizontal drilling allows up to 18 different miles-long fracking lines from one single well-pad on the surface. Drillers use a proprietary mix of chemicals to lubricate the fracture, hold it open with sand and allow the trapped gas and oil to rush to the surface. The consequent boom in natural gas extraction has been rebuked, however, largely because of the potential hazards of that chemical slurry. While many companies choose not to disclose their recipes, chemicals can include a lengthy list of ingredients, including hydrochloric and boric acids.

In addition, many blame fracking for the hundreds of earth quakes a year in states like Oklahoma, which recorded only a few dozen a year prior to fracking. After drilling, many companies pump the frack-water back into old wells, disrupting the tectonic homeostasis on the surface. Especially when the process was first developed, drill casings also leaked into water tables a la documentary film Gasland. What’s more, natural gas is largely methane, itself a potent greenhouse gas. So even if the process were entirely clean, it would still add to global warming, albeit less than oil or coal.

Record low natural gas prices induced by the fracking boom have made it more economical and a more likely choice for power generators. The cost of natural gas delivered to power plants peaked at $9.26 in 2008 and averaged $5.19 in 2014. In addition, the EPA’s Mercury and Air Toxics Standards make cleaner-burning natural gas a better choice for most generators. The EPA’s Clean Power Plan rules, yet to be fully fleshed out, are also expected to make early retirements for coal plants more attractive. This two-pronged move to natural gas is expected to incent increased natural gas-fired capacity, which can ramp up electric generation at a moment’s notice and increasingly supports renewable energy development.

The paradigm is usually framed as renewables instead of fossil fuels — what economists would call substitutes, as opposed to compliments. However, as natural gas compliments renewable energy, they become increasingly price dependent. For example, peanut butter and jelly are also compliments because they’re usually eaten together. If the cost of peanut butter goes down, people will eat both more peanut butter as well as more jelly, assuming that the cost of jelly hasn’t changed. Likewise, when the price of natural gas goes down, so does the effective cost of renewables, which are made ever more plausible by gas-fired generation.

It’s increasingly taken as a given that the energy industry, the largest global greenhouse gas emitter, has to become more sustainable. One theory of that transition supposes that using non-renewable resources can help ease our economy into a renewable era without causing rolling blackouts that can cost billions. The natural gas-renewable complementary relationship is a perfect example of that logic.

Despite the environmental consequences of fracking, the associated boom in natural gas may prove to be a crucial piece of the puzzle in renewable energy integration. Long-term climatic and economic stability depend on the smoothest and quickest transition to renewables possible — and the natural gas boom might be the ticket.

Owen Reynolds is a Washington, D.C.-based writer and an economist at the Federal Energy Regulatory Commission with an MS in economics from Northeastern University. The opinions and views offered here are his own and not those of the United States, the Federal Energy Regulatory Commission, individual Commissioners or members of the Commission staff.

Lead image: Fracking. Credit: Shutterstock.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s