Wednesday, January 29, 2014

Natural Gas Goes Over $5, Up 180%, And Reminds Why Wind And Solar Are So Valuable

It has been a long time since natural gas last hit $5 per thousand cubic feet, but it happened this week once again.  Falling to below $2 in April 2012, natural gas has been heading up since that bottom.

In fact, from that bottom, natural gas prices are up about 180%.

That big jump, still rising natural gas prices, and prices over the $5 mark are healthy reminders that natural gas remains a volatile commodity. Nobody really knows what gas prices will be a month, a year, or certainly 25 years from now.

But everyone knows how much hydro, wind and solar will cost 25 years from today.  Free fuel means price certainty.  Consumers of hydro, solar or wind can today lock in their price of power for decades ahead.

The 180% jump in gas prices reminds just how valuable is the price stability offered by hydro, wind and solar. After decades of price reductions, of course, wind and solar now offer competitive prices, in addition to price certainty of power produced over decades.

The combination of a low and certain price makes hydro, wind and solar best values in the power markets, even without pricing the pollution avoided by them!


  1. I agree. What do we know about whether consumers are being gouged, or is this just the way the "market" works (as though no people were involved raking in the cash).

    1. Few consumers pay the daily spot market price, as most gas is bought on longer term contracts. The price move up in the last 1 month is tied to the large demand and gas withdrawals from storage triggered by two big cold snaps. And so the price move seems largely a matter of demand rising rapidly and significantly to meet heating demand. At least that seems the case right now.