Strategic Planning and Market Analysis; How the Natural Gas Futures Market will need Solar Power to Compliment Texas State Power Grid Demands
Zohreh Ravaghi
Ardebili*1, Max Kolbe2, John Sutherland3,
James Keeter4
Abstract Given the lack of market
stability in the oil and gas sector, the concept of applying solar energy as a
secondary or tertiary and stable power supply to state and national grids is
what should be driving investors towards this market.
According to the definition, a
primary energy source is an energy source that can be consumed directly or
converted into some other useful power, such as electricity. Roughly a third of
the natural gas consumed in the United States goes into power plants for the
production of electricity. Although in the current atmosphere of low gas prices
due to high supply from shale and low demand the market may seem prime for
electricity production, however the horizon for natural gas market will greatly
shift to undersupply and high prices. Studies show that shale reserves are
short lived and the recent construction of several ethylene cracker plants in
the US alone and the multiple LNG export plants in construction will have an
untold and very high demand for natural gas. Natural gas prices will rise
significantly and given the latest reduction in drilling the demand will not be
satisfied and therefore prices are expected to rise significantly.
The state of Texas is the highest
power consuming state in the US, in 2013 had a total of 367, 546 Million kW-hrs
over 40% greater than the state of California which has by far the most
advanced solar powered grid in the US. As a matter of primary power, sources of
electricity generation should be considered and optimized. Electrical power
production via natural gas fired plants may in the near future not produce
cheap electricity as the chemical and export demand of it may exceed the low
price capacity point and shift demand significantly upwards. Natural gas is the
building block of many industrial processes and chemicals for the manufacturing
industry. Consuming it for power is not strategically making use of the
resource and not providing a great return on investment, whereas using natural
gas to sustain a cheap and abundant supply of basic industrial chemicals is in
fact building a more competitive economic structure for the US.
The goal in power production and
market stability should be to minimize the use of natural gas as power
producing fuel and maximize it to produce the necessary chemicals used for the manufacturing
sector which in turn creates far more employment. In its place, power should be
produced from solar energy; Texas is one of the largest producers and consumers
of power given that it has a large industrial sector that has a high demand for
power. Texas is also one of the best regions in the US for high solar radiation
levels, therefore it is a logical Texas be the state where solar power be given
all the required financial and technical attention to strengthen the supply of
abundant and cheap solar power production.
This paper will attempt to first
carry out a market analysis in the consumption and production of energy and its
future trends, then followed by an application study of solar power to these
trends specifically assessing both photovoltaic and concentrated solar power
production system solutions. Given that Texas is one of the greatest power
producing and consuming states, we will present our study for the state of Texas
as a case study on how solar power can be feasibly considered as a stable power
producing source while allowing the oil and gas industry to prosper and
maximize its potential and strengthen the US industrial sector.
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