The U.S. economy still runs largely of fossil fuels, with petroleum, gas and coal accounting for 80% of both domestic energy production and consumption. Renewables account for just over 12% of the energy mix and nuclear for the remaining 8%, with little drive towards green energy sources except for California.
To reach net-zero emissions globally by 2070, the industry needs to “dramatically scale up clean energy technologies” particularly in areas beyond the power sector. The International Energy Agency (IEA) hence compiled over 800 options to curb emissions, e.g. shuttering inefficient coal power plants, steel mills and cement kilns.
Gas-fired power plants in China a struggling to stay afloat as profits are squeezed by Beijing’s reduction in regulated power tariffs. Since June, tariffs for electricity generated from gas have been cut by 16% to 28% in key coastal provinces to bolster energy-intensive industries amid trade tensions with the U.S.
Global gas demand is recovering from the Covid-19-related “dip” and grows robustly over the next 15 years, spurred by coal-to-gas switching in China, India and Southeast Asia, the Rapid Scenario of BP’s Global Energy Outlook shows. From 2035, however the impetus from Asia fades and gas demand falls back to 2018-levels.
Spot price differentials between regional U.S. gas trading hub and the benchmark Henry Hub have narrowed in the first half of 2020 amid lower production and a Covid-19-related plunge in demand. Basis prices are set to stay narrow at most hubs, with Winter 2020/21 forward basis swaps for SoCal Citygate and Waha Hub averaging $1.11/MMBtu and -$0.47/MMBtu.
Pacific Gas & Electric (PG&E), California’s largest utility, has been cutting power starting from Tuesday due to high winds and heat that could exacerbate the spread of wildfires. An all-time record heat across Southern California keeps fuelling fires, with up to 3 million residents at the brink of power outages.
U.S. liquefaction plant developer Venture Global sees LNG-fuelled power generation as “a counter” to China’s building spree of new coal power units. By turning to LNG, utilities can “regain control of the energy transition in the post-Covid-19 era," Venture Global co-founder Michael Sabel told the Gastech Virtual Summit.