Report: Transformation in U.S. power supply breeds new challenges

A jump in natural gas use combined with big gains in energy efficiency have helped the United States make strides in cutting emissions over the past five years, according to a report released Thursday.

The “Sustainable Energy in America” factbook documents a 6.4 percent slide in total energy use between 2007 and 2012. During the same time frame, the amount of electricity generated both by natural gas and renewable sources climbed, and coal-fired power generation declined, helping to trim carbon dioxide emissions produced when fossil fuels are burned.

“Significant changes are occurring in the US energy sector that are boosting investment and accelerating deployment of a range of commercially available clean technologies,” said Lisa Jacobson, president of Business Council for Sustainable Energy, which developed the report with Bloomberg New Energy Finance.

Perhaps the biggest change documented in the report is America’s transition toward lower- and zero-carbon power sources, especially natural gas, which provided nearly a third of the nation’s electricity in 2012. That’s a big jump from five years earlier, in 2007, when natural gas was used to generate just about a fifth of electricity in the United States.

Renewable energy generation — including not just wind and solar, but also geothermal and hydropower — has climbed from 8.3 percent to 12.1 during the same five-year span, adding more than 17 gigawatts.

Total U.S. installed capacity of natural gas and renewables is now at 629 gigawatts (442 of that coming from natural gas), representing about 58 percent of the total power generating mix.

The evolution in the United States’ electricity supply will necessitate big changes down the road, as regulators work to ensure reliability and balance intermittent wind and solar supplies. According to the report:

Ensuring ongoing reliability will become an even tougher challenge for electricity market operators and regulators, given the diminished role for coal and the increased presence of variable resources (ie, intermittent renewables). Yet other changes afoot – including reduced electricity demand through energy efficiency; the introduction of smart grid technologies for improved grid management; and the growing role for dispatchable resources such as natural gas plants, hydropower, and demand response – can help the electricity industry meet this challenge.

Of course, emerging power sources don’t always exist in harmony, even though natural gas — which can more easily be used to generate power with a moment’s notice — is generally cast as a strong partner for intermittent renewables. The relatively low price of natural gas has made it tough for wind power to compete economically (though that industry has gotten a boost through a federal production tax credit, just extended for another year by Congress).