The Convergence Of Gas And Power

Forbes

28-05-2025

Junaid Ali is the CEO of Prismecs, a leading energy solutions provider that delivers thousands of MW of power globally.
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The energy landscape is shifting significantly, and I see gas companies as central to this transformation and changing their roles to help confront the dual challenges of energy demand.
No longer confined to the extraction and distribution of natural gas, companies within this sector are increasingly stepping into the realm of power generation. Simply, with their existing infrastructure and expertise, gas companies are uniquely positioned to lead compared to coal-generated power plants. But this shift is not just a strategic choice—it's becoming an industry necessity.
Traditional power generation methods, primarily dependent on centralized systems, are proving inadequate in the face of modern energy demands and climate challenges. Whether driven by economic pressures, regulatory changes or the imperative to reduce carbon emissions, these companies are being pushed to reinvent themselves as key players in the power sector.
Centralized power systems have long been the backbone of our energy infrastructure. Global electricity demand is expected to grow by 60% by 2040, driven by urbanization and the electrification of transport and industry. Traditional power grids, designed for when energy was generated far from where it was used, are struggling to keep up with this growth.
This is where gas companies come in. With the sharp decline of coal-fueled power and the steady transition away from oil, natural gas has become a promising bridge in the shift to cleaner energy sources. Distributed power generation, where electricity is produced closer to where it's consumed, offers a solution to the inefficiencies of the traditional grid.
With 40% or lower carbon emissions than coal when burned, natural gas is becoming a critical bridge in the transition to cleaner energy. It pairs effectively with renewable sources like wind and solar by providing backup power during intermittent periods. For instance, General Electric (GE) reports that some natural gas turbines now achieve over 60% efficiency in combined-cycle operations, making them ideal for distributed systems.
Gas companies have an advantage in this transition due to their extensive existing infrastructure. The pipelines, storage facilities and distribution networks built for natural gas can be adapted for power generation. This allows gas companies to expand into the power sector with lower capital investment than building entirely new infrastructure from scratch.
Moreover, natural gas's ability to complement renewables is crucial. Combined-cycle plants use natural gas and can ramp up quickly to provide power when solar and wind generation falter. For example, Dominion Energy and Southern Company are expanding their portfolios to include not only natural gas but also wind and solar projects. These efforts position them as leaders in the energy transition, showcasing how gas companies can support renewable integration while maintaining reliability.
Governments worldwide are implementing ambitious climate policies, pushing for cleaner energy sources. For instance, the European Union (EU) aims to reduce "net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels."
Economic incentives are also driving the shift. The cost of renewable technologies has plummeted over the past decade, and the U.S. Energy Information Administration (EIA) reports that solar photovoltaic costs have fallen by over 80% since 2010, while wind power costs have dropped by 40%. Natural gas can complement these renewables, offering reliability and flexibility and allowing companies to diversify revenue streams as traditional natural gas applications plateau.
The transition of gas companies into power generation is reshaping the energy ecosystem. These companies address grid stability and energy storage challenges by providing gas and electricity while driving innovation through partnerships with renewable energy developers and technology firms.
For instance, Chevron has partnered with renewable energy companies to develop hybrid systems that combine natural gas with solar and wind power. According to the company, these projects deliver a stable, reliable energy supply while significantly reducing emissions compared to traditional fossil fuel-based power generation.
The transformation of gas companies into power companies marks a pivotal moment in the energy sector, one that forward-thinking companies can seize. Expertise in natural gas and extensive infrastructure make those in this sector as indispensable in creating a low-carbon energy future.
The pressures driving this change—economic, regulatory and environmental—are only intensifying. The IEA emphasizes that natural gas will remain a cornerstone of the energy mix through 2040, mainly as a complement to renewables.
Therefore, the future of energy is decentralized, flexible and sustainable. By taking on this new role, leaders in gas are not just responding to market pressures but also helping to shape the future of the global energy system.
I am committed to supporting this transition and believe it represents one of the most significant opportunities of our time. I am certain that companies that seize this opportunity will play a central role in meeting the challenges of the 21st century, ensuring energy systems are ready for a sustainable and dynamic future.
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