Natural Gas Prices Present Interesting Challenges for Renewable Energy

It’s clear that the abundant supply of (and thus low price of) natural gas presents challenges for the renewable energy industry, just as the artificially low price of gasoline generated by subsidies for the oil companies creates a challenge for electric transportation. But you won’t hear too much moaning about that subject here at the Renewable Energy Finance Forum.

Occasionally a speaker will remind the audience that fracking comes at an environmental cost that is still not well understood, but in the main, the subject is taken as just another factor in the overall equation.  Why this calm demeanor in the face of such robust competition? I’m not sure. Perhaps it’s that intelligent and mature people don’t curse their luck. Maybe we’re just trying to be “the adult in the room.”

In fact, several times I’ve heard that this phenomenon with natural gas is actually a good thing for clean energy, as it represents the “perfect partner” for renewables — a low-cost provider  of energy to deal with the intermittence of wind and solar. But to me, this seems like “sour grapes” in reverse, i.e., we’re stuck with this; let’s find a way to like it.

All of us who follow and advocate for clean energy acknowledge that it is, at the end of the day, a considerable challenge on several levels: technologically, economically, and politically. Even putting aside the politics of the situation, which is clearly not on our side, we still need to face the fact that renewable energy is replacing something that works perfectly well. The lights generally don’t go out, and the cost of energy, at least as the externalities of fossil fuels remain external to its cost/price structure, is quite affordable. Thus until the world is willing to pay for a clean solution to the energy situation that is good for national security, no one here is expecting a precipitous adoption curve — at least until the point of grid parity in a few years.

My advice: Fasten your seatbelt and settle in for a long ride.