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July 02, 2013
Brattle Report on the Relationship between Natural Gas and Renewables Cited in POWER Magazine Article

A recent article published in POWER Magazine provides a synopsis of a recent report by Brattle economists that discusses how, contrary to widespread suggestions that abundant supplies and low prices for natural gas are pushing out wind and solar, the resources are in fact long-term allies that may force other generation to the sidelines in the future. The report was sponsored by the Texas Clean Energy Coalition (TCEC), and focuses on the Electric Reliability Council of Texas (ERCOT).

The recent fall in natural gas prices has led to concern that cheap gas-fired power is undercutting incentives to build renewable capacity. The report argues that this concern focuses too much on renewable capacity installation costs and ignores both its advantages and the significant synergies that exist between gas and renewables. In the short term, despite low gas prices, renewables are called upon first, especially in competitive markets, because they have the lowest variable costs. Although the report focuses on the ERCOT region, its insights are applicable in other states and countries.

The article, “Natural Gas and Renewables Are Allie, Not Adversaries, Says Report,” discusses the report’s finding that both gas and renewables can be utilized as complementary resources, depending on the time frame as well as additional factors, such as the long-term path of gas prices, renewable technology costs, electricity market rules, and policies affecting all power generation technologies.

The report, “Partnering Natural Gas and Renewables in ERCOT,” was authored by Brattle principals Peter Fox-Penner, Jürgen Weiss, and Ira Shavel, and Senior Policy and Marketing Analyst Heidi Bishop. To view the report, please visit the TCEC website.

To read the article in its entirety, please visit POWER Magazine’s website.