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REUTERS EVENTS Power CEOs defend role for natgas in shift to climate-friendly grid

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A coal-fired power plant operates in the background of the recently built gas-fired power plant at Duke Energy's Crystal River Energy Complex in Crystal River, Florida, U.S., March 26, 2021. REUTERS/Dane Rhys

WASHINGTON/MADRID/BOSTON, June 24 (Reuters) - Power company executives argued during a global energy conference this week that natural gas will have a long-lasting role in the transition to a climate-friendly global economy, even as environmental groups, progressive politicians, and intergovernmental organizations contend fossil fuels of all types must be phased out fast to stop global warming.

The heads of U.S. utilities Duke Energy Corp (DUK.N) and Edison International (EIX.N), Spanish multinational Iberdrola SA (IBE.MC), power equipment and technology provider GE Gas Power (GE.N), and engineering firm John Wood Group PLC (WG.L), told the “Reuters Event: Global Energy Transition” conference this week that natural gas will be needed for decades to come.

They said its near-term role would be to continue to replace its dirtier rival coal, and that its longer-term role would be as a complement to renewables, switching on during periods when emissions-free sources, like solar and wind energy, are unavailable.

“As we look into the future, we see it transitioning away from being a baseload, all-the-time, resource to more of a peaking and balancing resource,” said Lynn Good, chief executive of Duke Energy, the largest electric utility in the United States, who estimated natural gas would be part of the energy mix well into the 2040s.

Ignacio Galan, CEO of Iberdrola, agreed: "Natural gas is going to be needed still for a long period of time but not as baseload.”

He predicted that regulators would need to figure out new ways to pay gas-fired power plants to remain on standby, so they are “readily available whenever it is needed."

Scott Strazik, CEO of GE Gas Power, said he expects gas to be long-term complement to solar and wind power, and that its emissions would eventually be dealt with through carbon capture and sequestration technology, which stores greenhouse gases underground.

"Gas is a force multiplier for growing renewables. It allows us to take advantage of the awesome power of the wind and sun … for the inevitable periods when renewables alone are not able to meet demand,” Strazik said.

Pedro Pizarro, CEO of Edison International which operates in California, said his company believed 6% of wholesale power would still come from natural gas in 2045.

“Gas continues to be a bridge fuel, I don't think you can pull the plug on it overnight,” he said.

CLEAN BREAK VS ENERGY SECURITY

The comments clash with some climate advocates who want a clean break from fossil fuels. While gas has long been seen as a relatively clean-burning source of energy, research has been mounting that its use leads to unintended emissions of methane, a powerful greenhouse gas, leading environmental groups and some local governments to push for anti-gas regulation.

The International Energy Agency, an intergovernmental group, meanwhile, issued a report last month that said reaching net-zero emissions by 2050 would require an end to all fossil fuel investments, including for gas, and that the world’s electricity should be made up of a combination of renewables and nuclear power by that point.

U.S. President Joe Biden wants utilities to achieve net zero emissions in power plants by 2035. And in Europe, the European Commission has proposed rules to restrict funding for natural gas projects because of the risk they pose to the bloc’s climate goals to decarbonize by 2050.

Robin Watson, CEO of consulting and engineering company John Wood Group, told the Reuters conference that he believed funding of existing gas assets should be optimized even as more money is funneled to building more sustainable future sources.

“To maintain energy security, which still underpins our quality of life, we need to accept and shape a role for hydrocarbons that is still compatible with our net-zero ambitions. This is a pragmatic and important compromise, not a cop-out," Watson said.

Scotland-based Wood's business lines include work in both renewable energy and the oil and gas and chemical sectors.

For more on the Reuters Events: Global Energy Transition conference please click here https://reutersevents.com/events/energy-transition-global/

Reporting by Valerie Volcovici, Isla Binnie, Ross Kerber and Rich Valdmanis Editing by Marguerita Choy

Our Standards: The Thomson Reuters Trust Principles.

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