As battery costs decline, researchers say localized portfolios of clean energy could challenge gas plant investments.
The stranded cost risk
The financial risk of stranded assets is not news, RMI reports. “The same technological innovations and price declines in renewable energy that have already contributed to early coal-plant retirement are now threatening to strand investments in natural gas."
The modeling solved for least cost net present value at the plants' in-service dates, Dyson said. “But renewables and storage are getting cheaper and the price of natural gas will probably either stay the same or go up.”
If the price of natural gas remains at its current level, in the $3 per million British thermal units (mmBTU) range, "a [clean energy] portfolio would replace a new combined cycle plant and be cheaper by 2040," Dyson said.
"With $5 gas, that happens in 2026."