On May 27, 2022, the Los Angeles City Council unanimously approved a new policy that would seek to ban most natural gas appliances in new construction, beginning as early as January 2023. In doing so, Los Angeles joins more than 50 other California municipalities who have taken this initiative as part of a push to eliminate emissions from the built environment. In 2020, natural gas consumption accounted for nearly 80% of greenhouse gas emissions from the residential and commercial sectors in the United States.
California is not alone. In December, New York City passed a similar ban on new natural gas appliances, setting a goal for all-electric new construction by 2027. And while New York governor Kathy Hochul’s plan for a similar statewide ban didn’t make it into this year’s budget, all signs point to an acceleration in natural gas phase outs in the roughly 30 states that haven’t passed laws explicitly prohibiting municipalities from following suit.
The residential and commercial building sectors account for over a quarter of total natural gas usage in the United States, creating a prime opportunity for emissions reduction through electrification. Gas burning stoves alone create emissions equivalent to 500,000 cars annually, according to one Stanford University study. Natural gas consumption in the U.S. residential sector has held steady since the early 1970’s, averaging around 5 trillion cubic feet annually (the equivalent of over 1,500 terawatt hours of electricity).
The inevitable increase in electricity demand driven by transitioning away from natural gas use in the residential market is certain to create significant challenges for regulators, consumers, and utilities alike. We also expect the planned retirement of thermal electricity generation (natural gas, coal, oil) to continue in key markets, which will place further demand on an already stressed system. On the power supply side, this can only be solved through the continued deployment of small and large scale renewables. But it is on the demand side where distributed energy storage can have the biggest impact.
Like other parts of the energy industry, battery energy storage development was initially concentrated in large, utility-scale projects. These installations have helped provide greater reliability to intermittent renewable power generation while enhancing grid resiliency overall. Recent years have seen an acceleration in the development of smaller scale batteries, installed to support local distribution and specific behind-the-meter customer loads.
As fast-response, limited duration resources, batteries provide the flexibility to serve dynamic system peak load requirements without necessitating additional generation facilities. As the overall energy market continues its shift from a philosophy that overbuilds generation facilities—paying resources that may be idle 99%+ of the year—to one that actively manages real-time supply and demand, batteries can and should give regulators and decision-makers additional comfort in moving away from fossil-fired resources across use-cases, including in the new building sector.
