October 24, 2011 | last updated June 4, 2012 12:18 pm

NRG CEO: Natural gas not long-term energy fix | Future lies in distributed generation through widespread use of solar panels, expert predicts

HBJ PHOTO/BRAD KANE
HBJ PHOTO/BRAD KANE
NRG Energy CEO David Crane at the Oct. 6 ceremony celebrating the opening of the 200-megawatt GenConn natural gas plant in Middletown.

Natural gas will not be the long-term answer for Connecticut or America's energy future, according to the chief executive of one of the nation's leading energy companies.

David Crane — president and CEO of New Jersey-based NRG Energy, Inc. — said at the opening of his company's newest natural gas generating plant in Middletown recently that the solution to the state and the country's cost, dependency and environmental concerns lays beyond natural gas.

"Natural gas is great; environmentally, it is the best short-term solution," Crane said.

America's long-term energy future lies with both large- and small-scale solar and wind generation, especially solar, backed up by baseload and peaker power plants using a variety of fuels, Crane said. The bulk of that back-up fuel source was supposed to be nuclear power, he said, but after the Japanese nuclear disaster in March, the regulatory burdens make expanded nuclear nearly impossible.

With expanded nuclear out of the picture, natural gas is the best solution for now, Crane said. Large quantities of natural gas are starting to be harvested out of shale rock in the Midwest and Texas, causing prices to drop and decreasing the country's dependency on foreign fuel supplies.

Natural gas also emits 30 percent less greenhouse gas than petroleum and 45 percent less than coal, helping the country achieve environmental goals of clean air. The domestic supplies are estimated at 100 years, although limited data makes projections difficult to make.

Connecticut has made a big push for expanded use of natural gas in the state: 30 percent of Connecticut's total electricity generating capacity comes from natural gas, and 90 percent of the proposed new electricity generation in the state will come from natural gas, according to regional grid administrator ISO New England.

Three of the newest Connecticut power plants to come online use natural gas. The 200 megawatts at the GenConn Middletown Station where Crane was on Oct. 7 uses natural gas, as does the 200-megawatt GenConn Devon Station in Milford. Both stations are peaker plants, meaning they only come online when demand for electricity is high.

The Kleen Energy Systems' 620-megawatt generating plant in Middletown also came online this year using natural gas. That plant — infamous for the February 2010 explosion that killed six workers — is baseload, meaning it constantly provides power to the electric grid.

While natural gas is a positive solution for the short-term, Crane said the main problem for the long-term is natural gas is not environmentally sustainable.

Natural gas is a better environmental alternative than petroleum or coal, but it still emits greenhouse gases and only gets the country about half-way to its climate change goals, Crane said. Therefore, the future of electricity generation must come from even cleaner alternatives.

NRG already is the nation's largest developer of solar arrays, with 2,000 megawatts in operation or in the pipeline in California, Arizona and New Mexico. While such large-scale generation certainly plays a big role, small-scale solar generation will play a significant role as well, Crane said.

Small-scale solar comes when businesses and homeowners start putting photovoltaic panels up on their properties in what is known as distributed generation. These panels power the properties first and send the excess electricity back onto the grid, essentially winding the owners' electricity meter backward.

"We see more and more that power generation is going to occur on the other side of the meter," Crane said.

The distributed solar generation market is about to boom in places such as Connecticut because the price of solar installations is dropping, lower than the price of grid power, Crane said. In the past, solar users paid a premium for the clean energy; but soon they can get it at a discount. In places like Arizona where grid power users pay 11 cents per kilowatt hour, residential solar installations are built at 10 cents per kilowatt hour.

NRG identified 22 states where the cost of distributed generation solar will be cheaper than grid power in the next three years, including Connecticut, along with the rest of the Northeast, Crane said. Connecticut distributed solar will be sold at 13 or 14 cents per kilowatt when grid power costs about 16 cents per kilowatt.

Connecticut already has prepared itself for a solar revolution with the passage of an energy policy reform law in June. That law provides a credit program to build solar installations in the state; allows the state utilities to own up to 10 megawatts of renewable power; and provides grants and loans for other solar programs.

Based on the new Connecticut law and the dropping solar prices, companies such as Seaboard Solar and Soltas Energy have opened offices in the state, in Danbury and Branford, respectively. Soltas' goal is to install 250 megawatts of solar power in New England over the next five years.

Events such as Tropical Storm Irene — where distributed generation can provide power to businesses and homes after a grid outage — further encourage more solar installations, Crane said.

"People realize they can have green power that is cheaper than grid power, and they won't be dependent on grid power for 100 percent of their electricity," Crane said.

NRG will take advantage of this charge toward solar using its retail energy supply subsidiaries — Reliant Energy, Green Mountain Energy and the newly acquired Energy Plus.

Large-scale wind will play a role in the energy future as well, Crane said, although not on the same level as solar. The only way for the wind industry to reduce the costs per kilowatt hour of electricity produced is to builder larger and larger turbines, with fewer and fewer places accepting those turbines.

"Solar started to appeal to us because it is more nanotechnology," Crane said.

To back up all this clean energy, Crane said his company had made a bet on the expanded use of nuclear power, as nuclear also emits no greenhouse gas. However, after the Japanese earthquake, tsunami and subsequent radiation leak from a nuclear reactor, that future became much harder to reach; NRG has written down its $481 million investment in two new nuclear reactors at the South Texas Project, which would have been the first American nuclear reactors in three decades.

The problem with nuclear isn't the typical not-in-my-backyard neighbors concerns, as nuclear is widely accepted in the South, said Crane. Instead, nuclear development suffers from regulatory and government financing hurdles only made worse by Japan.

Connecticut receives 45 percent of generated power from two nuclear reactors at the Millstone Power Station in Waterford, with the federal operating permits set to expire in 2035 and 2045. The state has no plans for more nuclear reactors.

Because the outlook for nuclear power is dim, a variety of fuel mixes will be necessary to serve as backups to solar and wind generation, Crane said. While natural gas still can play a part, it is not the long-term energy future.

"It would be a terrible thing if this country took all the aging nuclear plants and coal plants and replaced them all with natural gas," Crane said.

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