As 2013 comes to a close, it’s time to look back at the big energy stories of the year. Here’s my top 10 stories from 2013…
The Japanese Ministry of Economy Trade and Industry announced in March that a team aboard a drilling ship pearched above the Eastern Nankai Trough had extracted methane gas from hydrates trapped 1,000 feet below the sea floor surface. Methane hydrates, also known as clathrates or “fire ice,” are deposits of natural gas trapped within the crystaline structure of frozen water. The extraction of usable gas from undersea methane hydrates in 2013 was a world first, a breakthrough step towards tapping a potentially massive new alternative source of natural gas. Estimates of the scale of hydrate resources range from 10,000 trillion cubic feet (TCF) to more than 100,000 TCF—the equivalent of anywhere from 50% more to 15 times more natural gas than all global shale gas deposits combined. While commercial extraction of methane hydrates is still many years away, the potentially enomormous implications for global energy supplies—and efforts to confront global climate change—are worth pondering today. Read more.
2. The historic shift from gas to coal in the U.S. power sector stalls as coal consumption rebounds in 2013. Coal consumption in the United States rebounded in 2013, eroding some of the historic declines in U.S. coal use experiencec during 2011 and 2012. Coal consumption climbed 36.2 million short tons for the first half of 2013, according to EIA data, an 8.8% year-on-year increase. The rebound was driven almost entirely by the electric power sector, where coal regained some of the market share lost over the two preceding years in the face of this year’s higher natural gas prices. In total, the EIA projects that the rebound in coal consumption in 2013 combined with a very modest increase projected for 2014 will take back about 39 percent of the cumulative declines experienced since 2010. Read more.
A prolonged heat wave settled across the northeastern and midwestern United States in July, straining electricity systems across some of the nation’s most densely populated areas and setting several record days for peak electricity consumption in the New England region. Power demand surged as the heat wave began on Wednesday, July 17th, which briefly held the record for the 10th highest peak demand day in New England history, according to the New England System Operator. That record would soon be crushed as the heat index continued at or above 100 degrees across the region for three days. By the time temperatures fell over the weekend, Thursday, July 18th and Friday, July 19th became the 4th highest and 8th highest peak demand days in New England history with 26,884 and 27,379 megawatts, respectively, or the equivalent output of more than 26 large nuclear reactors. Real-time five-minute electricity prices spiked to nearly $700 per megawatt-hour and average hourly prices exceeded $466 per megawatt-hour as the system operator ordered emergency demand response programs and fired up standby oil-fired power plants. Read more.
8. Challenged by distributed generation and falling demand, electricity utilities must evolve or die.
This year was abuzz with talk of the “utility of future,” “utility 2.0” and “new business models” for the electric power sector, as industry analysts and observers became acutely aware of a confluence of new trends eroding traditional utility market shares and sending profits into free fall. With rising use of renewable energy, falling wholesale market prices, and the growth of distributed generation and energy efficiency, the electric power sector is being reshaped. Together, the changes coming over the next two decades are likely to be at least as profound as the wave of industry restructuring and deregulation experienced over the previous two decades. With market shares and profitability of conventional centralized generation assets declining, electricity demand growth stagnating, and emerging technologies enabling new ways to meet consumer demands, electric utilities may be facing a stark new reality: they must evolve or die. Will they be up to the task? Read more.
Source: Wiser & Bolinger (2013). 2012 Wind Technologies Market Report. US Department of Energy.
Author’s note: Have a happy new years and stay tuned at TheEnergyCollective.com for daily coverage of the biggest energy stories of 2014!