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Thursday, April 4, 2013

Citigroup: Renewables and shale gas in a symbiotic relationship

This Dave Roberts piece in Grist is a must-read.  It describes a report issued by Citigroup last September entitled Shale & renewables: a symbiotic relationship that finds that, contrary to fears – largely unrealized – that  cheap shale gas could displace renewable energy generation, gas and renewables “could in fact be the making of each other in the short term” because renewables are reaching cost parity with conventional fuels in many parts of the world - driving additional demand for them – but also driving demand for more gas-fired peaking power, which is in many ways essential for (renewable energy’s) large-scale adoption.”

This echoes important work by the Worldwatch Institute on using gas strategically in energy policy to drive a low-carbon economy.

So, Citi see natural gas as a bridge to a renewable future – though in climate terms, it may more accurately be viewed as a hedge against the most catastrophic warming.

Roberts summarizes:

Shale gas will not swamp and displace renewables, it will help them. Renewables will become cheaper than fossil fuels in the medium- to long-term. It’s happening now in some places, it will happen in others soon. Obviously the rise of renewables could be accelerated by policy, and should be. It won’t happen fast enough to avert the worst of climate change without a policy boost.

That policy boost cannot come too quickly, or too aggressively.

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