A friend of mine suggested a good rule of thumb was that natural gas fuel prices translate roughly to 0.7 cents per KWh per dollar per MMBTU. If I were to put a little time into the question (which I'm skipping now, but some of the others here might be able to do faster) I could probably define the efficiency of the natural gas plant my friend is using as a baseline. The thing is that U.S. natural gas plants average 45% efficient - rising a tiny bit every year - and that the low price of gas still doesn't ensure that a lot of the plants are competitive with new wind and solar prices when operation and maintenance costs are included.
I agree that for the time being the resource which is threatened is coal. I observe that nuclear plants tend to be cheap for a long time until they are not, and once they are not, most of them will retire. Not everyone is going to give the nuclear plants a handout at ratepayer expense for the sake of protecting a handful of jobs at the expense of many more jobs due to the rate increase.
In 2019 the rate of new wind and solar plus our current rate of energy efficiency (something that is left out of the conversation all too often, since in 2019 utility efficiency programs saved three times as much energy as new wind or new solar produced, and the Federal Appliance Standards saved slightly more than new wind or new solar) was five times the current rate of nuclear retirement. I expect nuclear retirements to speed up though.
The thing about this conversation is that the regional differences are so large - of course those affecting wind and solar are, but natural gas is also highly sensitive to regional differences - that it isn't really possible to generalize.
We are seeing some contracts for wind and solar under the lowest possible price for any natural gas plant. Before there is a real face to face conflict between renewables we are going to see more wind and solar picking up momentum against coal, and I firmly expect that we will see some pretty wild rides in the price of gas.
That is more dangerous to gas than it may seem. But there's another facet to this: Let's start with this announcement: https://www.eia.gov/todayinenergy/detail.php?id=42495
It is an EIA post from February (before the virus). The text says that 76% of all new generation expected in 2020 will be wind and solar. What it doesn't say, but the numbers say is that wind construction in 2020 is likely to be double the amount in any year since 2013, and to be a new all time record year almost 50% higher than 2012, which is the current record year. Solar is expected to be 50% higher than any year since 2017, and about 20% higher than 2016, which is the current year.
The expected 2020 renewable construction is also almost a third of the rate of construction needed to eliminate all fossil generation well before 2030 and to eliminate all fossil fuels, assuming we do the right things with the added electricity, by 2040.
As a long time climate activist whose path has been lonely, since I only promote things that cut emissions and also save money, I join in the shame of my lot for failing to associate the known harm from fossil fuel air pollution in a concrete way before this. The COVID-19 lockdowns have given much of the world a sample of what it would be like if we replaced all our fossil fuels with renewable energy.
Ending fossil fuel pollution in the U.S will save 100,000 lives per year, and eliminate 10 million doctor visits for pollution-induced medical problems every year. This would be justification enough for replacing fossil fuels with renewables at a break-even or a small cost. But my way of looking at things see this: We will build wind and solar until we have eliminated 80% of fossil fuel generation and whatever nuclear retirements occur in that time. What will be left is the most efficient of the natural gas plants, which are also the most recently constructed, and the ones that owners will be most reluctant to retire soon.
Around that time, and not before, we will begin having enough excess wind and solar generation that it makes economic sense to use that electricity, which may be discounted because it is above consumption - to produce hydrogen. The hydrogen can be stored in existing natural gas storage facilities and used in those remaining natural gas plants. There are several versions of this projection, and I have no opinion about which one will rise to the economic surface. They include a cheap process for converting renewable hydrogen to methane, and more rapid development of electric cars, electric heat pumps, and other industrial processes which erode non-electric fossil fuel production and sales.
This really is a pretty firm path, if we agree that renewables aren't likely to get more expensive, and that natural gas isn't going to be produced at a much lower cost for very long. The only uncertainty is how fast we follow it.
According to several recent announcements, the virus isn't doing much to slow down the EIA projection for new wind and solar. Further, U.S. resistance or foot-dragging will not be replicated in most of the rest of the world and we will suffer if we lose more of our technological lead in this race.
I think that people who look at this from the perspective of preserving natural gas as a resource are challenged more by the Saudi control of the price of oil than anything else. In the U.S., oil and gas tends to come out of the same wells, and for a long time oil prices have supported gas. If that support is substantially weakened, one could imagine natural gas prices picking up some of the weight, but that would require higher natural gas prices.
I think we should celebrate the nearing end of fossil fuels, and will work to promote that in every way that ensures lower energy costs for everyone. The cost of wind and solar dropped about 40% in late 2017, and the EIA notice is a reference point for how fast the electric utility market moves in response to price signals of any sort. This is a global transition, and U.S. opinions need to be realistic in that light. We have lost a lot of our leadership in renewables, and have neglected the importance of our abilities with efficiency technology and strategies for far too long. The virus makes the dirty air visible by temporarily removing it, an the virus creates an economic demand for the huge new investments, jobs and growth that will result from an intentional increase in new wind and solar construction - and expanding utility efficiency programs. U.S. electricity could be cut by 1% per year by bringing the utility efficiency programs in 44 states up to the level of the best six states.
There's no good place to end this statement. It's a start. Not an end.