Renewables Erode Liquefied Natural Gas Investments

The New Brattle Group report says yes, as data on increased number of investments in renewables reduce financial support for LNG projects.


(Source: GE)

Do you have natural gas investments, particularly in LNG? Read this. 

The world’s investments are currently going shifts due to emergence of renewable projects among several nations. Collapse in oil prices are experienced due to many factors such as China’s economic uncertainty, Japan’s resumption of nuclear power generation and more supply from Australia’s new sources of liquefied natural gas.

According to the New Brattle Group analysis, this, however, will be a long-term competition in Europe and Asia between renewables and LNG as another wave of LNG projects are said to push through. Asian LNG prices dropped in the past few years from US$ 15 million British Thermal Units (MMBtu) to US$ 6 to US$ 7 per MMBtu. Companies building new multi-million-dollar LGN plants need to deliver a price of US$11 to 11 per MMBtu to earn profits stated in the report.

A projection of natural gas power generation is also expected to double in Asia within 20 years. Renewable projects are also expected to gradually increase due to lower cost. China is said to be the main player in reducing capital costs in renewables as it continue to produce cheaper solar panels and turbines. Germany is also to boost its renewables as it aims to phase out nuclear power.

Natural gas investments (Source: GE Power via Giphy)

However, it is said that as these two rapidly meet demands on renewables, increase burning of coal are also being observe from China and Germany. The activity has been called a “dirty secret” as it covers the temporary stopgap of renewables until it becomes the primary source.

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Above all of these, electricity from these sources is the commodity being utilized and structuralized as of the moment due to new advances and business schemes. It is the only commodity that has to be used immediately after being produced and the challenge to provide electricity at lower costs and less environmental impacts is at stake.

The workable solutions for large-scale storage to be integrated in renewables are still being developed thus, power suppliers will always need back up power to suffice the demands. And as of now, the cheapest source for many nations is power produced from coal and natural gas. Indeed, it will be a long transition in the energy industry yet we hope that it will be soon.

Natural gas investments (Source: ExpressNews via Giphy)

John Vauden

Novelist, fictional writer and literary expert based in Australia

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Renewables Erode Liquefied Natural Gas Investments

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