What’s the future of energy? This question is at the heart of every discussion about sustainability and energy investments today. As the world transitions to cleaner energy systems, gas-based power and renewables are often seen as competitors. But is it really a zero-sum game, or can they work together to power the future?

Let’s dive into the strengths, challenges, and interplay between these two energy sources.

Gas: Familiar, but Financially Fragile

Gas-based power plants have long been a cornerstone of energy grids worldwide. Here’s why they continue to play a significant role:

• Reliability and Flexibility: Natural gas plants can quickly ramp up or down to meet fluctuating demand, making them ideal for stabilizing grids during peak times or renewable intermittency.

• Lower Emissions (Compared to Coal): While not emission-free, natural gas emits 50-60% less CO2 than coal-fired plants.

• Scalability: Gas infrastructure is well-established, allowing for rapid deployment when needed.

However, challenges loom:

• Rising Costs: The cost of new combined-cycle gas turbines (CCGTs) has tripled in recent years, with projections reaching $2,400/kW by 2030.

• Environmental Concerns: Methane leaks during extraction and transport remain a significant contributor to greenhouse gases.

• Finite Resource: As a fossil fuel, natural gas is inherently non-renewable.

Renewables: No Longer the Underdog

Renewable energy sources like solar and wind are reshaping the global energy landscape. Their appeal lies in their sustainability and declining costs.

• Zero Emissions: Once operational, renewables produce no greenhouse gases.

• Cost Competitiveness: The leveled cost of electricity (LCOE) for onshore wind and solar ranges from $25-$75/MWh—cheaper than new gas plants in many regions.

• Rapid Growth: In 2025 alone, the U.S. is expected to add 32.5 GW of solar capacity.

Yet, renewables face obstacle:

• Intermittency: Solar and wind depend on weather conditions, making them less predictable.

• Storage Costs: Battery storage solutions are improving but remain costly at scale.

• Land and Infrastructure Needs: Large-scale renewable projects require significant land and grid upgrades.

The Case for Collaboration

Rather than framing gas-based power and renewables as adversaries, consider how they complement each other:

• Bridging the Gap: Gas plants can act as a "bridge fuel," providing reliable power while renewable technologies mature further.

• Grid Stabilization: Gas peaker plants are essential for balancing renewable intermittency until battery storage becomes more widespread.

• Hybrid Solutions: Co-located gas and renewable projects are emerging as innovative ways to maximize efficiency.

For instance, NextEra Energy estimates that while gas may serve ~75 GW of projected electric demand growth by 2040, renewables will need to meet the lion’s share.

Key Metrics at a Glance

Here’s how gas-based power compares with renewables across critical metrics:

What Lies Ahead?

The future is clear: both gas-based power and renewables have roles to play in meeting rising global energy demand. Key trends include:

• Battery Storage Expansion: By 2027, up to 11 GW of battery storage could be developed in the U.S., reducing reliance on gas peakers.

• Hydrogen Integration: Green hydrogen could eventually replace natural gas in some applications.

• Policy Support: Tax credits and incentives will continue driving renewable adoption.

Closing Thoughts

The transition to a sustainable energy future isn’t about choosing one source over another - it’s about leveraging their strengths together. As costs for renewables decline and storage technologies improve, their dominance will grow. But until then, natural gas remains an essential partner in ensuring grid reliability.

Ready to shape the future of energy? At Penomo, we empower decision-makers like you with insights that drive impactful investments.

Check out our website to see how.