Supply Mix: A Key Ingredient to Progress

In my previous article on the energy transition, I highlighted how the desire of customers for safe, affordable, reliable, sustainable, and smart energy is driving the industry’s evolution.

We have yet to tackle how to secure this complex energy experience for our customers while maintaining a healthy grid. To me, the answer is supply mix.

To power a modern grid, the energy industry must carefully evaluate the benefits and limitations of our available resources. The reality is that no single energy resource is perfect. Instead, the challenge lies in determining the supply mix that meets the current needs of the grid and can power our path toward the energy transition.

Renewables are a key part of our transitional supply mix. Affordable wind and solar energy enhance sustainability and provide reliable power generation. However, we recognize the limitations these resources pose to grid reliability.

The demand for power does not ebb when conditions are unfavorable for renewable generation, and while battery storage is promising, we have yet to scale the technology enough to bridge the gap between renewable production and existing demand.

Another important part of this supply mix will be demand response and energy efficiency. While not traditionally considered a resource, the cleanest and cheapest form of energy is the energy you do not use.

To date, we have focused mainly on the supply side — investing in additional generation to meet growing demand — but the energy equation also includes demand-side actions that can significantly support the power grid.

Currently, NRG is the 3rd largest provider of Demand Response programs and we have witnessed the powerful impact these programs can have on balancing markets and alleviating grid demand.

Load management and enlisting customers to take a more active role in the energy transition may be a critical — although nontraditional — component of the modern supply mix.

The final component of a successful transitional supply mix is natural gas. While we seek scalable, reliable alternatives, natural gas will continue to play a supporting role in the energy transition.

Natural gas is currently the only resource flexible enough to fill the gap left by the adoption of renewables and can meet demand when the wind is not blowing and the sun is not shining. As renewable generation expands, we will see a resurgence in flexible thermal generation. As a result, natural gas — and possibly hydrogen — will continue to be a necessary resource.

We will continue to invest in emerging technology and explore new resources to deliver for our customers. Today, however, supply mix is the best tool for managing the grid and meeting our customers’ evolving energy needs.