Sharon Paterson, Director of Business Development
Demand for electricity is increasing rapidly due to a warming world, the adoption of electric vehicles, advancements in artificial intelligence, the expansion of data centers, and many other factors. While renewable energy sources are essential, they alone may not be able to meet the growing demand for power. Natural gas power stations have ramped up production recently to meet these needs and replace aging coal facilities, however this solution is only climate aligned if the upstream methane leakage is as low as possible.
Fuel Switching in Action
The United States has a large and complex electrical grid that already includes a significant fleet of combined-cycle gas turbine (CCGT) power generation facilities. Some coal-fired plants are being replaced with more efficient CCGT plants. For example, the Tennessee Valley Authority (TVA), the largest public power company in the United States, is planning to replace its iconic 1.3 GW Kingston coal-fired facility with a modern 1.5 GW complex that includes 4 MW of solar power and CCGT equipment.
Certified Gas: Making CCGT Power Generation Greener
When natural gas leaks potent methane during extraction, transportation, or use, the environmental advantages of switching from coal to natural gas are significantly undermined. To further improve the environmental performance of this growing fleet of CCGT power plants, operators must consider using certified gas as their fuel source. Certified gas can have a methane intensity 80% lower than the average methane emissions of uncertified gas in the United States. Methane, the primary component of natural gas, has a global warming potential 82 times that of carbon dioxide over a 20-year period. The urgency to reduce methane emissions is significant, and by certifying their gas using third-party verified standards such as MiQ, gas producers can substantially lower the amount of methane released into the atmosphere.
The Impact of Certified Gas on Utilities Like TVA
For utilities like TVA, the impact of switching to certified gas could be substantial. Over the past year, TVA added three combustion turbine units with a combined capacity of 750 MW at the Colbert Combustion Turbine site in North Alabama. In December 2023, they added another 750 MW with three new units at the Paradise Combined Cycle plant near Drakesboro, Kentucky. These facilities together represent an annual throughput of approximately 26,280,000 MWh, or roughly 89 million MMBtu, assuming 50% efficiency (the new facilities likely operate at higher efficiency). By purchasing MiQ Grade A certified gas with a verified methane intensity of 0.05% or less, TVA could reduce its methane emissions by over 15,000 metric tons annually compared to uncertified gas—equivalent to taking 274,000 internal combustion engine cars off the road for a year. The cost to customers for this climate-impact benefit would likely be just six cents per month.
The Economics of Certified Gas and Consumer Willingness to Pay
A 2023 survey by the Energy Policy Institute at the University of Chicago found that while most Americans take steps to reduce their energy costs, less than 40% are willing to pay even a dollar more per month on their energy bills to combat climate change. However, the example of TVA shows that significant reductions in greenhouse gas emissions can be achieved for as little as six cents per household per month. It’s important to note that the reduction in methane emissions achieved through certified gas is a direct reduction, not a carbon offset. Industrial gas buyers who use carbon offsets to achieve Net Zero goals could reduce their costs significantly by purchasing certified gas, as it would reduce the number of offsets needed to reach their targets.
The Availability and Future of Certified Gas
You might wonder how much certified gas is available. Over 30% of the natural gas produced in the United States has been certified under various programs over the last three years. It is abundant today, and major producers like BP, Exxon, Chesapeake, and EQT are committed to minimizing emissions throughout the supply chain. While it will take many years for the world to transition fully to renewable energy, certified gas offers a viable, less harmful alternative in the interim. Until we achieve a fully renewable energy grid, certified gas can help avoid unnecessary emissions.