Utilities Are Betting Billions on a Technology That Could Become Obsolete

May 20, 2026 - 03:42

Power companies across the United States are pouring billions of dollars into new natural gas power plants, betting that the fuel will serve as a reliable bridge between the coal era and a future dominated by renewables. But a growing number of analysts and energy experts warn that these investments could become obsolete far sooner than expected.

The core of the problem is simple economics. Solar and wind power have become the cheapest sources of new electricity in many regions, and their costs keep falling. Battery storage is also dropping in price, making it easier to store renewable energy for use when the sun is not shining or the wind is not blowing. As these technologies improve, the need for gas plants that run around the clock diminishes.

Yet utilities are building gas plants at a rapid pace, citing the need for reliable power to back up intermittent renewables. They argue that gas is cleaner than coal and can ramp up quickly to meet demand spikes. But critics say this logic ignores the long-term risk. If renewable energy and storage continue their current trajectory, many of these new gas plants could sit idle for most of the year, unable to compete on price.

When a power plant is no longer economical to run, it becomes a stranded asset. That means the utility and its customers are stuck paying for a facility that is no longer needed. The financial hit could be enormous. One recent study estimated that the current wave of gas plant construction could lead to tens of billions of dollars in stranded costs over the next two decades.

Regulators are starting to take notice. Some states are pushing utilities to consider alternatives like demand response and grid interconnections before building new gas capacity. But in many places, the construction continues, driven by a mix of political pressure, regulatory inertia, and a belief that gas will remain essential for years to come.

The question is whether that belief is correct. If the rapid growth of renewables and batteries continues, the gas plants being built today could end up as monuments to a miscalculation, costing ratepayers dearly.