GLOBALGUIDENovember2022FossilFuelTransitionStrategiesRMI’sGlobalEnergyTransformationGuide:ElectricityGLOBALGUIDEAboutRMIRMIisanindependentnonprofitfoundedin1982thattransformsglobalenergysystemsthroughmarket-drivensolutionstoalignwitha1.5°Cfutureandsecureaclean,prosperous,zero-carbonfutureforall.Weworkintheworld’smostcriticalgeographiesandengagebusinesses,policymakers,communities,andNGOstoidentifyandscaleenergysysteminterventionsthatwillcutgreenhousegasemissionsatleast50percentby2030.?RMIhasofficesinBasaltandBoulder,Colorado;NewYorkCity;Oakland,California;Washington,D.C.;andBeijing.?FossilFuelTransitionStrategies /2GLOBALGUIDEAuthorsCaraGoldenbergAnibalGomezLeiaGuccioneGenevieveLillisMattSugiharaAuthorslistedalphabetically.ContactsMattSugihara,msugihara@CaraGoldenberg,cgoldenberg@CopyrightsandCitationMattSughiara,CaraGoldenberg,AnibalGomez,LeiaGuccione,andGenevieveLillis,FossilFuelTransitionStrategies—RMI’sGlobalEnergyTransformationGuide:Electricity,RMI,2022,/global-energy-transformation-guide-fossil-fuel-transition-strategiesRMIvaluescollaborationandaimstoacceleratetheenergytransitionthroughsharingknowledgeandinsights.Wethereforeallowinterestedpartiestoreference,share,andciteourworkthroughtheCreativeCommonsCCBY-SA4.0license./licenses/by-sa/4.0/.AllimagesusedarefromiSunlessotherwisenoted.FossilFuelTransitionStrategies /3GLOBALGUIDEAcknowledgmentsTheauthorsthankthefollowingindividualsfortheirhelpfulinsightsand/orfeedbackonthisreport.Allerrorsremainourown.RMIDiegoAngelKingsmillBondKobenCalhounFrancisElishaAlexEngelRachitKansalDhroovaaKhannanWhitneyMannLaetitiadeMarezExternalCatherineAbreu,E3GVaibhavChaturvedi,CouncilonEnergy,Environment,andWaterAnanthChikkatur,DeloitteConsultingUSAnnaCollyer,AustralianEnergyMarketCommissionTanujDeora,independentintervieweeStephenDoig,RMI,IrvingInstituteforEnergyandSociety,andDartmouthCollegeGarrettFitzgerald,SmartElectricPowerAllianceMaxGruenig,E3G

TyelerMatsuoFrancisNdongoKajaRebaneJeremyRichardsonCarinaRosenbachSakhiShahEmmaSlaterOleksiyTatarenkoJuanVialJennieJorgensen,NationalRenewableEnergyLaboratoryArchitrandiPriambodo,AsianDevelopmentBankFranciscoSalazar,EnixRichardSedano,RegulatoryAssistanceProjectMichaelSponring,PwCRobertStoner,MassachusettsInstituteofTechnologyEricWanless,GlobalEnergyAllianceforPeopleandPlanetDanWetzel,InternationalEnergyAgencyFossilFuelTransitionStrategies /4GLOBALGUIDETableofContentsAboutThisReport...........7ExecutiveSummary..........9Introduction.............11GlobalTrendsEmergingintheFossilFuelTransition..............15TheTransitionAwayfromCoal18TheChangingRoleofGasinFuturePortfolios20Private-SectorCommitments.........24MobilizationofFinancetoSupportTransitionStrategies25EnsuringaJustTransition..........27KeyChallengesandOpportunitiesintheFossilFuelTransition.........31FossilFuelTransitionStrategies /5GLOBALGUIDEHowFossilFuelTransitionStrategiesCanSupportPriorityOutcomes......34EnsureaFairandInclusiveEnergyTransition...35CreateaSystemPoisedforSustainableGrowth..37IncreaseEfficientUtilizationofCleanAssets...40InnovationintheFossilFuelTransitionAcrossCountries...........44AdvancedEconomies............45Middle-IncomeandEmergingMarketswithDynamicElectricitySectors..........49Middle-IncomeandEmergingMarketswithStableElectricitySectors...........50DevelopingEconomies............51Spotlights54CoalTransitionintheUnitedKingdom54Kenya’sGrowththroughCleanEnergy......55OvercomingLong-TermFossilFuel–GenerationPPAsinChile................55Stakeholder-DrivenJustTransitioninCanadaandGermany................56Conclusion.............57Endnotes..............59FossilFuelTransitionStrategies /6GLOBALGUIDEAboutThisReportThisreportispartofRMI’sGlobalEnergyTransformationGuide:Electricityseries,whichisaresearchendeavoraimedatunderstandingtheleadingedgeofinnovationforforward-thinkingelectricitysystemtransitionsaroundtheworld.TheintentoftheGlobalGuideistoassessnewdevelopmentstosecureuniversalaccesstoreliable,affordable,andcleanelectricitybyidentifyingkeytrends,exploringemergingchallengesandopportunities,andsharingsuccessstoriesfromelectricitysystemleaders.Theseriesfocusesoneightcatalystsforchangethatourresearchhasshownhavethegreatestpotentialtosupportelectricitysystemtransformation.Thesecatalystsarehigh-impactleversavailabletoindustryleadersacrosscountriestotransformthepowersector.RMIplanstopublishaseparatereportforeachoftheeightcatalyststoprovidedetailsontheinnovationedgeandwhereleadershipisneededmost.FossilFuelTransitionStrategies /7GLOBALGUIDEThisreportisfocusedonFossilFuelTransitionStrategies.Theothercatalystsinthisseriesare:???????

MarketStructuresSystemPlanningandProcurementPublicPoliciesCustomerSolutionsAccessibleFinanceUtilityIncentiveStructuresCarbon-FreeTechnologyAdditionally,foranintroductiontothiseffort,explanationoftheframeworkusedtoguideourdiscussionofdifferentcatalysts,andfurthercontextonwherecountriesareintheirenergytransition,wehavepublishedacomplementaryreporttitledPointsofProgress—AnIntroductiontoRMI’sGlobalEnergyTransformationGuide:Electricity.FossilFuelTransitionStrategies /8GLOBALGUIDEExecutiveSummaryExpandingenergyaccess,supportingsustainablegrowthopportunities,andreducingemissionsarethreekeyfactorsunderpinningcommitmentstoandimplementationoftheglobaltransitionawayfromfossilfuelstocleanenergysources.Avarietyofpressuresaredrivingthistransition,fromfinancialinstitutionsandshareholderstogovernmentsandutilities.Inresponse,diverseinnovativesolutionsareemergingacrosstheglobethatcanofferimportantinsightstocountriesastheycrafttheirownstrategiestonavigatethetransition.Thisreporttouchesonfivekeytrendsprominentaroundtheworldthatwillhaveasignificantimpactonthesuccessfultransitionawayfromfossilfuels.Theyare:Thetransitionawayfromcoal.Althougheconomics,politicalpressures,andpolicyactionshavesupportedthedeclineofcoalglobally,coaliscontinuingtogrowinsomeregionswithreadyaccesstosupplyandsubsidizedrates.Thechangingroleofnaturalgasinfuturegenerationportfolios.Althoughexistingpoliciesandproceduresmayfavordeploymentofgasgenerationinsomecountries,globalgasdemandisexpectedtodeclinebecauseoftightersupplies,elevatedprices,andincreasedmarketuncertainty.Mobilizationoffinancetosupporttransitionstrategies.Becausetransitioninglarge,complexfossilfuelassetsiscostly,theavailabilityofinnovativefinancingisacriticalenablertoacceleratetheirtransition.Private-sectorcommitments.Investorsandshareholdersareincreasinglyintegratingclimateconsiderationsintotheirinvestmentstrategies.FossilFuelTransitionStrategies /9GLOBALGUIDEEnsuringajusttransition.Ifnotmanagedappropriately,workersandtheirfamilies,aswellasbroadercommunitieseconomicallydependentonfossilfuels,willbearadisproportionateburdenofthetransition.Allthesetrendsneedtobeconsideredinthetransitionfromfossilfuels.Innovationwillberequired(1)totransitionthedirtiestplantsquicklyandwithminimalimpactstocommunitiesandcustomersand(2)todevelopnewcleanenergyresourcestotaketheplaceoffossilfuelgenerationandmeetnewdemandgrowthinafairandequitablemanner.Thefossilfueltransitionwillopennewopportunitiesforeconomicgrowth,bringingcheaperandcleanerpower,aswellasassociatedindustryandjobstosupportit.Toensureeconomicviability,transitioningassetsneedtobereplacedbynewsourcesofcleanenergy,includingrenewablesanddemand-sideresourcessuchasenergyefficiencyandflexibleenduses.Thefossilfueltransitionwillneedtobeenabledandsupportedbyfinancing,aclearpipelineofcleanreplacementenergyprojects,innovativeutilityprograms,andnewtechnologytosupportflexible,responsive,andreliablegrids.Thisreportidentifiesthecriticalchallengesthatcountriesfaceintransitioningtheirelectricitysystems,aswellasthekeyopportunitiestheywillbeabletotakeadvantageof.Thelatterincludeinnovativefinancingmethods,rolesfortheprivatesectortoincreasedemandforcleanenergy,newwaysworkersandcommunitiescanparticipateinthecleaneconomy,newtechnologiesandbusinessmodelstoexpandelectricityaccessandreliability,andemergingopportunitiesforcountriestoleveragethetransitionforclimate-forwardgrowth.Theseareexemplifiedincasestudiesfromaroundtheworld,suchastheUK’scoaltransitionandChile’sinnovativemethodstotransitioncoalpowerpurchaseagreements(PPAs).Aspolicymakers,utilities,investors,developers,civilsociety,andotherstakeholdersexplorewaystosupportafossilfueltransition,wehopethisreportprovidesinspirationandlessonsfromplacesthatarealreadynavigatingthechallengesinfrontofthem.FossilFuelTransitionStrategies /10GLOBALGUIDEIntroductionTransitioningtheworld’senergysystemawayfromfossilfuelstocleanenergysourceswillenablecountriestoexpandenergyaccess,supportsustainablegrowthopportunities,andreduceemissions,especiallythroughexpansionofrenewablegenerationandenergy-efficiencygains.iThispaperfocusesonthevarietyofpressuresandstrategiesdrivingthistransitionawayfromfossilfuelgenerationandhighlightsinnovativesolutionsemergingacrosstheglobetosharelessonsandinsightsthatcanguidenewefforts.Thefossilfueltransitionisnotonlyaboutreducingpowersectoremissions.Itwillalsoreshapetheglobalelectricitysectorandopenfurtheropportunitiestodecarbonizeandmodernizegridsystems.Thepowersectorhasmaturecleanenergytechnologieswithfavorableeconomics,puttingitattheleadingedgeofthebroaderenergytransition.Italsoexpandsopportunitiesforequitableaccesstootherenduses,suchascooking,mobility,andthermalcomfort.Itisimportantthatpowersectordecarbonizationbecompletedrapidlybutalsoequitably,toensurethatcommunities,workers,andmarketsrelyingontheexistingsystembenefitfromthetransition.

Thefossilfueltransitionwillreshapetheglobalelectricitysectorandopenfurtheropportunitiestodecarbonizeandmodernizegridsystems.Whileelectricitygenerationisthefocusofthisreport,thefossilfueltransitioncanbroadlyincludetheglobalenergysystem,suchasliquidfuelsfortransportation.FossilFuelTransitionStrategies /11GLOBALGUIDEThisreportexploresvariousdimensionsthatneedtobeconsideredintheglobalfossilfueltransition,including:Reducingandavoidingemissionsassociatedwithexistingandnewfossilfuelgeneration,whenpossibleandappropriateSupportingfossilfuelworkers,communities,andtheassociatedeconomiestoachieveajusttransitionAppropriatelywieldingregulatorytoolstoensurethatthemosteconomicsolutionsareimplemented,includingnotonlynewgeneration,butalsoenergyefficiency,demandresponse,andothernon-wirealternativesIncentivizingdeploymentofrenewablesthroughreducedbarriersoraccesstocapital,includingsupportfordemand-drivenactionssuchascleanenergycommitmentsRecognizingtheenvironmentalco-benefitscapturedthroughcleanresourcesOvercomingpoliticalchallengesandbarrierstothefossilfueltransitionManymorechangeleverswillalsogovernthepaceandscaleofelectricitysectordecarbonization.RMIwillbeexploringthepolicy,planning,market,andtechnologypressuresandopportunitiesincompanioncatalystreports.Todecarbonizethepowersector,whileachievinguniversalaccesstoaffordableandreliableelectricity,theworldwillneedtomakeamassivechangeinthewayitgeneratesandmanagesenergy.FossilFuelTransitionStrategies /12GLOBALGUIDEGlobally,installedcapacity,asshowninExhibit1,isstilllargelyfossilfuelgenerated.Forexample,GlobalEnergyMonitorestimatesthat:Morethan2,400coalplants,across79countries,totalaround2,100gigawatts(GW)ofinstalledcapacity.19,354gas-firedgenerators(above50megawatts[MW]),across129countries,totalaround1,800GWofcapacity,whichisknowntobeasignificantundercountofactualgenerators.iiOil-basedgenerationismoremarginalattheutilityscalebutcontributestoelectricitygenerationthroughsmallgeneratorsandiswidelyusedincertainareas,suchasislandstates.Exhibit1IncreaseinGlobalPowerSectorEmissionsandShiftsinGeneration,bySourceCoalGasOilNuclearHydroSolarandwindOtherRenewables PowerSectorEmissionsElectricityGeneration(Terawatt-hours[TWh])PowerSectorCO2Emissions(Gigatons[Gt]/year)30,000161425,0001220,0001015,0008610,00045,000220002003200620092012201520182021Source:BP,StatisticalReviewofWorldEnergy;Ember,GlobalElectricityReview;Ember,EuropeanElectricityReview;IEA,WorldEnergyOutlookGlobalEnergyMonitor’scriteriaexcludecertaingenerationunits,suchasthosesmallerthan50MW,aswellasgenerationfororfromliquefiednaturalgas.Also,thecriteriaoftenmisscapturedorembeddedgenerationunits.FossilFuelTransitionStrategies /13GLOBALGUIDEWhilecoalstillconstitutesasignificantshareofgeneration,newcoalplantsarebeingaddedinonlyalimitednumberofregions.Incontrast,gasgenerationisgrowingglobally,evenasgaspricevolatilityisontheriseandthepriceforrenewableenergycontinuestoplummet.Inareasthatdonothaveaccesstoreliablegridpower,capacityfrombackupgeneratorsisalsogrowing.AstudybytheInternationalFinanceCorporation(IFC)estimatesinstalledcapacityofbackupgeneratorsinthedevelopingcountriesitstudiedtobebetween350and500GW—morethanalltheinstalledcapacityofIndia.2

Thisreporthighlightsinnovativewaysthefossilfueltransitionisbeingapproached,managed,andexecuted,aswellaswayssomecountriesareseekingtobypassthetrappingsoffossilfuelgenerationentirely.Giventheomnipresentroleoffossilfuelsinglobalelectricitysystems,thisreporthighlightsinnovativewaysthefossilfueltransitionisbeingapproached,managed,andexecuted,aswellaswayssomecountriesareseekingtobypassthetrappingsoffossilfuelgenerationentirely.FossilFuelTransitionStrategies /14GLOBALGUIDEGlobalTrendsEmergingintheFossilFuelTransitionForty-twopercentofglobalemissionscomefromelectricitygeneration.3Toachieveaclimate-alignedpathway,industryplayersatalllevelswillneedtorethinkhowelectricityisusedandgenerated.Exhibit2EmissionsReductionPathwayandForecastElectricityDemandCoalGasOilNuclearHydrogenHydroBatteryStorageSolarWindOtherRenewables30,00025,00020,000GW15,00010,0005,00020002005201020152020202520302035204020452050Source:BloombergNEF,NewEnergyOutlook,“GreenScenario:PowerandHydrogen”FossilFuelTransitionS/15GLOBALGUIDETheelectricitysectorwillalsogrow,aselectricityreplacesotherenergysources—suchasvehiclefuel,cookingoil,andbiomassforheating—throughelectrification,aswellasthroughdemandgrowthforeconomicdevelopment.Toachievecarbonneutrality,theInternationalEnergyAgency(IEA)forecaststhatrenewablesneedtomakeupnearly90%ofelectricitygenerationby2050.4Otherforecasters,suchasBloombergNewEnergyFinance(BloombergNEF),seesimilargrowthtrajectories,asshowninExhibit2(previouspage).Thecurrentenergytransitionis,inthewordsoftheEconomist,“unprecedentedinscaleandopportunity.”5Fossilfuels,however,arestillsignificantcontributorstobothelectricitysystemsandthebroadereconomy.Insomeplaces,therelianceonfossilfuelsdoesnotreflecteconomicrealitybecauseofheavysubsidization.AsshowninExhibit3,theInternationalMonetaryFund(IMF)estimatesthatexplicitsubsidiestotalednearly$445billionin2020,equivalenttoalmostathirdoftheIEA’sestimatedtotalenergyinvestment($1.52trillion)inthesameyear.6Exhibit3GlobalExplicitFossilFuelSubsidiesBillionUS$

ExplicitSubsidiesExplicitSubsidies–Estimated80070060050040030020010020152016201720182019202020212022202320242025Source:IMF,AGlobalandCountryUpdateofFossilFuelSubsidiesFossilFuelTransitionS/16GLOBALGUIDEThesesubsidiestaketheformofpricesupportsorcapsthatmakeitlesscostlyforconsumerstopurchasefossilfuelsaswellasproducer-sidecontrolssuchastaxbreaksandconcessionarypublicfinancingthatmakeitcheapertodeveloptheresource.Realeconomicpressures,however,areforcingactionthroughavarietyofapproaches.Forexample,financialinstitutionsincreasinglyseecoalasunabletobefinancedglobally,whileinsurancecompanieshaveplacedrestrictionsonunderwritingcoalprojects.7Asaresult,itisincreasinglyexpensiveanddifficulttofinanceandoperatenewcoal-firedpowerplants.Intheinstancesthatcoalisabletobefinanced,itismainlybecauseofpolicysupportatagovernmentlevel.Utilitiesalsofaceamajorrisk(andcustomersevenmoreso),astherecouldbebillionsincostsinstrandedassetsfromcoalandgasplantsifthetransitionisnotmanagedproperly.8Anotherfactorisdemandpressure.Multinationalcorporations,forexample,areincreasinglydemandingcleanergenerationtomeettheirclimatecommitments.Theyarewillingtoinvestand,eveninsomeinstances,defectfromthegridtoachievecleangenerationandarecreatingamultibillion-dollarmarketopportunityforutilitiesandindependentpowerproducers(IPPs).Thisalsocanhavetheunintendedsideeffectofdrivingupfixedcostsforothercustomerswhoremainconnectedtothegrid.Atthesametime,pricestodeveloprenewablesystemsarefallingwherethesystemsareperceivedaslessrisky,cheaper,orofferingagreaterreturnoninvestmentthanfossilfuelgeneration.9FossilFuelTransitionStrategies /17GLOBALGUIDEThisreportwilltouchonfivekeytrendsprominentaroundtheworldthatwillhaveasignificantimpactonthesuccessfultransitionawayfromfossilfuels.Theseinclude:?????

ThetransitionawayfromcoalThechangingroleofgasinfuturegenerationportfoliosPrivate-sectorcommitmentsMobilizationoffinancetosupporttransitionstrategiesEnsuringajusttransitionTheTransitionAwayfromCoalCoal-firedpowergenerationisthelargestsinglesourceofgreenhousegasemissions,accountingforaround20%ofglobalemissionsin2021.10Asashareoftotalgeneration,coalpeakedgloballyin2007,ataround41%oftotalcapacity,andhasgenerallybeenfallingsince.11However,owingtoareboundindemandfollowing2020’sCOVID-19outbreakandgassupplychallenges,coalconsumptiongrewtomeetaroundhalfoftheworld’selectricitydemandgrowthin2021.12Asitstands,theglobalpowersectorisnotontracktomeetclimatealignment,whichaccordingtotheIEA’sNetZeroPathwaywouldrequireunabatedcoaltobephasedoutinadvancedeconomiesby2030andallothereconomiesby2040.13Mostrecently,energysecuritychallengesrelatedtoRussia’sinvasionofUkraine,aswellasgrowingdemandaftertheCOVID-19lullsin2020,havecausedanuptickinglobalcoalusefromanetgenerationperspective,atrendthatwilllikelycontinueinthenearterm.14ProgresshasbeenmorepositiveinplacessuchasCanada,theUnitedStates,andWesternEurope(despiterecentchallengesinsuchplacesasGermany),whereagingcoalplantshavebeenreplacedbynewer,cleaner,andmorecost-effectiveresources.However,asshowninExhibit4(nextpage),coalisdominantandgrowingincertainareassuchasinSoutheastAsia,China,andIndiawherenewcoalisunderpinninglargeinvestmentsingridinfrastructure.FossilFuelTransitionStrategies /18GLOBALGUIDEExhibit4GlobalChangesinCoalFleetStatus,2010–22,byRegionCanceled,Shelved,orMothballedDecommissionedInConstructionPlannedAdditionsAfricaandMiddleEastAustraliaandNewZealandCanadaandUnitedStates?146.72EastAsia?700.02166.03EUEurasiaLatinAmericanon-EUEuropeSoutheastAsia?153.11SouthAsia?665.74RestofWorld?150.94-800-600-400-2000-200GWNote:Plannedadditionsincludeannounced,pre-permitted,orpermittedcapacity.Source:GlobalEnergyMonitor,GlobalCoalPlantTrackerAdditionally,inareassuchasIndonesiaandSouthAfrica—wherecoalgenerationiscloselylinkedtocoalproduction—electricitygenerationtransitionandcross-sectoreconomictransformationarecomplexandcostly.Wheretherearesuccessesinphasingoutcoal,theprimarydrivershavebeencloselylinkedtophaseoutcommitments,suchasthosemadebymanyadvancedeconomiesfollowingCOP26,carbonpricingmechanisms,andotherpolicymechanismssuchasenvironmentalregulation,becausecoalgenerationoftenisshieldedfrombroaderFossilFuelTransitionStrategies /19GLOBALGUIDEeconomiccompetition.iiiGovernmentcommitmentstophaseoutcoalhavecreatedadegreeofcertaintyinsuchplacesasEuropeandtheUnitedStates,whilecarbonpricinghashelpedtointernalizeemissionscosts,makinginvestmentsinnewcoalriskycomparedwithotheralternatives.Cost-effectivecleanenergyhasalsoemergedasamorelucrativeinvestmentthancoalinavarietyofcountries,includingCanada,Chile,andtheUnitedStates.TheChangingRoleofGasinFuturePortfoliosWhiletheexpansionofcleanenergyhasplayedasignificantroleinthedeclineofcoalinsomeregions,thegrowthofgashasalsobeenakeydriver.Gashasbecomeagloballyrelevantcommodityinrecentyears,especiallyimportanttotheelectricitysectorbecauseofitsperceivedflexibility,reliability,andeaseofdeploymentingrowingenergysystems,aswellastheaspirationthatgasinfrastructurebringslarge-scaleinvestmentinextraction,distribution,andendusessuchaselectricitygeneration.Gashistoricallyhasbeencheaperonaveragethancoaloroil,makingitdesirableforneworexpandingelectricitysystems,especiallyinareasseeingrapidlygrowingdemand.Proponentsofgasalsohighlightthatitiscleanerthancoalandallowsgeneratorstomeetmorestringentenvironmentalregulations,thoughagrowingbodyofresearchfindsthatmethaneleaksandfugitiveemissionspartiallyorfullyerasethisbenefit.15Petroleum-richcountriesarealsolookingtogasasavehicleforeconomicgrowththroughjobcreation,gasexportrevenue,andinfrastructuredevelopment.CountriessuchasAustralia,Mozambique,Qatar,Russia,andtheUnitedStatesaremakinglargeinvestmentsinupstreaminfrastructure,thoughoftentheseprojectsdon’tcontributemateriallytolocaleconomicdevelopmentandinsteadrelyonanimportedworkforceandinternationalsuppliers.16Furthermore,growthinindustriessuchasliquefiednaturalgas(LNG)FossilFuelTransitionStrategies /20GLOBALGUIDEhasexposedbuyersandsellerstoavolatileinternationalcommoditymarket,whichisfurtherexacerbatedbygeopoliticaltensionsamonglargeplayersintheindustry,suchasmanyofthoseinExhibit5withexceptionallylargeprovedgasreserves.Exhibit5GlobalProvedGasReservesTrillionCubicFeet200 400 600 8001,0001,2001,400*GrayindicatesnodataSource:BP,StatisticalReviewofWorldEnergyStill,gasisbeingusedtoreduceenergypovertyandexpandaccessandqualityofsupplyinspecificcircumstances.Thisisimportantinenergy-poorregionswitharemotecustomerbase,suchasSmallIslandDevelopingStates.Incaseswheresmallusersmustdealwithaveryunreliablegrid,smallgasgeneratorsareoftenmorecompetitivethandiesel.17Attheutilityscale,ininstanceswithoutall-sourceprocurementprocesses,gasassetsmaybeselectedovercheapercleanenergyresources.However,doingsoalsoexposescustomerstovolatilepetroleummarkets,whichoftenmakegridinvestmentsandrenewablesacheaperandmorestableapproach.FossilFuelTransitionStrategies /21GLOBALGUIDEDespitethedisplacementofcoalbygasresourcesinmanylocationsaroundtheworld,globalgasdemandisexpectedtodecline0.3%in2022,drivenbytightersupplies,elevatedprices,andincreasedmarketuncertaintycausedbytheRussianinvasionofUkraine.18Assuch,decisionmakersconsideringthechangingroleofgasinfuturegenerationportfoliosshouldfully