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Title: Easing the natural gas crisis: Reducing natural gas prices through increased deployment of renewable energy and energy efficiency

Easing the natural gas crisis: Reducing natural gas prices through increased deployment of renewable energy and energy efficiency Heightened natural gas prices have emerged as a key energy-policy challenge for at least the early part of the 21st century. With the recent run-up in gas prices and the expected continuation of volatile and high prices in the near future, a growing number of voices are calling for increased diversification of energy supplies. Proponents of renewable energy and energy efficiency identify these clean energy sources as an important part of the solution. Increased deployment of renewable energy (RE) and energy efficiency (EE) can hedge natural gas price risk in more than one way, but this paper touches on just one potential benefit: displacement of gas-fired electricity generation, which reduces natural gas demand and thus puts downward pressure on gas prices. Many recent modeling studies of increased RE and EE deployment have demonstrated that this ''secondary'' effect of lowering natural gas prices could be significant; as a result, this effect is increasingly cited as justification for policies promoting RE and EE. This paper summarizes recent studies that have evaluated the gas-price-reduction effect of RE and EE deployment, analyzes the results of these studies in light of economic theory and other research, reviews the reasonableness of the effect as portrayed in more » modeling studies, and develops a simple tool that can be used to evaluate the impact of RE and EE on gas prices without relying on a complex national energy model. Key findings are summarized. « less
Authors: ; ;
Publication Date:
OSTI Identifier:838985
Report Number(s):LBNL--56756
R&D Project: 67675B; TRN: US200509%%108
DOE Contract Number:AC03-76SF00098
Resource Type:Technical Report
Data Type:
Resource Relation:Other Information: PBD: 21 Dec 2004
Research Org:Ernest Orlando Lawrence Berkeley National Laboratory, Berkeley, CA (US)
Sponsoring Org:USDOE. Assistant Secretary for Energy Efficiency and Renewable Energy. Office of the Deputy Assistant Secretary for Technology Development. Office of Wind and Hydropower Technology Program (US)
Country of Publication:United States
Language:English
Subject: 03 NATURAL GAS; 29 ENERGY PLANNING, POLICY AND ECONOMY; DIVERSIFICATION; ECONOMICS; ELECTRICITY; ENERGY EFFICIENCY; ENERGY MODELS; ENERGY POLICY; ENERGY SOURCES; ENERGY SUPPLIES; NATURAL GAS; PRICES; SIMULATION