Why Onsite Generation, Powered by Natural Gas, Matters in Today’s Power Landscape

In the wake of growing power outages, extreme weather events, and shifting energy consumption patterns, one thing is becoming clear: the traditional centralized grid model is no longer enough to ensure reliable, resilient, and sustainable power for businesses and communities. The rise of intermittent renewable energy sources, coupled with aging infrastructure, has exposed vulnerabilities in our grid system—vulnerabilities that are increasingly difficult to overlook.

As the world pushes forward with the “electrification of everything” movement, the stress on our grid infrastructure is becoming more pronounced. Power demand is growing rapidly, but the grid, in many cases, isn’t keeping up. With a lack of capacity, significant infrastructure investments, and the rise of new external threats, it’s no wonder that many are turning to onsite generation as a solution. Central to this shift is natural gas—a reliable, cost-effective, and scalable energy source that complements renewables and bridges gaps in grid reliability.

The State of the Grid: Aging, Overburdened, and Vulnerable

The electricity grid was not built to handle the demands of today’s world. When it was first designed, the grid operated on a centralized model: power was generated in large power plants, transmitted through high-voltage lines, and distributed to consumers. This model worked well for many years, but today’s energy landscape is very different.

Grid infrastructure is aging. The average age of the U.S. grid is over 30 years, and much of it is in dire need of upgrades. According to the American Society of Civil Engineers (ASCE), the U.S. electricity grid has a grade of C-, signaling that it’s operating at the brink of failure. With increasing demand for electricity—especially due to the electrification of everything, from homes and offices to electric vehicles—the grid is being stretched thin. Major power plants are also being decommissioned faster than new ones are being built, further exacerbating the problem.

But perhaps more concerning are the threats that the grid faces. Weather events like hurricanes, floods, and wildfires have become more frequent and severe. According to the National Oceanic and Atmospheric Administration (NOAA), the U.S. experienced a record 18 billion-dollar weather disasters in 2022. These events put tremendous pressure on the grid, often resulting in widespread power outages. At the same time, external threats like cyberattacks are growing, with critical infrastructure being targeted more frequently.

This is where natural gas-powered onsite generation steps in. As a fuel with established infrastructure and reliability, natural gas provides a quick-response, dispatchable power source when the grid is strained or compromised.

The Electrification of Everything: More Power, More Pressure

The trend of electrification—where sectors that traditionally relied on fossil fuels, such as transportation, manufacturing, and heating, are switching to electric power—is accelerating. Electric vehicles (EVs) are growing in popularity, with millions of units expected to be on the roads globally by 2030. Buildings are moving toward electrification, with electric heating systems and appliances replacing traditional natural gas systems. Even industry is turning to electrified equipment to decarbonize.

While electrification helps reduce carbon emissions and is vital for the clean energy transition, it places significant pressure on existing grid infrastructure. More electricity is being drawn from the grid, yet the grid itself remains outdated and, in many regions, incapable of meeting these growing demands. As a result, the risk of brownouts, blackouts, and overall grid instability continues to rise.

Natural gas mitigates this pressure by acting as a bridge fuel—reliable, scalable, and able to power combined heat and power (CHP) systems or backup generators at critical moments. Businesses that adopt natural gas onsite generation can continue operations when the grid is overburdened, reducing their risk of outages and costly downtime.

The Challenge of Intermittent Renewables: Balancing Supply and Demand

The rapid adoption of renewable energy sources—particularly wind and solar—has introduced new challenges to grid stability. While these energy sources are clean and essential for reducing carbon emissions, they are inherently intermittent. The sun doesn’t always shine, and the wind doesn’t always blow. This creates significant challenges for grid operators, who must balance fluctuating renewable supply with consumer demand.

Although battery storage is part of the solution, it remains limited and expensive in many applications. Natural gas, on the other hand, is readily available and can quickly fill gaps in power generation. When renewable energy dips—whether due to cloud cover or low wind speeds—natural gas generators can ramp up in minutes, ensuring uninterrupted power supply.

In many cases, pairing renewables with natural gas-powered CHP systems provides an efficient, resilient solution. These systems generate electricity and thermal energy simultaneously, maximizing energy efficiency while supporting sustainability goals.

The Rise of Distributed Generation: Flexibility and Resilience

Onsite generation, or distributed generation (DG), involves producing electricity at or near the point of use rather than relying on centralized power plants. This includes solar photovoltaic (PV) systems, natural gas CHP plants, and battery energy storage systems.

One of the biggest advantages of onsite generation is resilience. By generating power locally, businesses can reduce their reliance on a grid that may be unreliable or vulnerable to cyberattacks and natural disasters. If the grid goes down, natural gas-powered CHP systems or backup generators allow businesses to maintain operations. During major storms like Hurricane Katrina and Superstorm Sandy, businesses with natural gas systems recovered faster and experienced fewer disruptions compared to those reliant solely on the grid.

In addition to resilience, natural gas-powered onsite generation provides flexibility. It allows businesses to participate in demand response programs, where they reduce electricity consumption during peak demand periods in exchange for financial incentives. Natural gas systems can be paired with smart energy management solutions, enabling real-time adjustments that optimize energy costs and improve grid stability.

The Economic Case for Natural Gas-Powered Onsite Generation

The economic benefits of natural gas-powered onsite generation are significant. The price of natural gas has remained relatively stable and affordable, making it an attractive option for businesses seeking to control costs. Natural gas infrastructure is already well-established across the U.S., providing businesses with easy access to reliable fuel.

By generating their own power, businesses can reduce their electricity bills, protect themselves from price volatility, and even sell excess energy back to the grid in regions that support distributed generation programs. Natural gas CHP systems, in particular, offer long-term cost savings by improving overall energy efficiency and reducing reliance on expensive grid electricity.

The Future is Local, Flexible, and Resilient

As the challenges of grid reliability, cyber threats, and renewable intermittency grow, the need for onsite generation becomes increasingly urgent. Businesses that embrace natural gas-powered solutions will be better positioned to weather these challenges while contributing to a cleaner, more resilient energy landscape.

Natural gas is not just a bridge to renewables—it’s an essential part of the energy mix. Its ability to complement renewables, provide reliable backup power, and reduce energy costs ensures it will remain a critical solution for decades to come. As businesses prioritize resilience, flexibility, and sustainability, natural gas-powered onsite generation will be at the center of the shift toward a decentralized, reliable, and sustainable energy future.

References

1. American Society of Civil Engineers (ASCE). (2021). 2021 Report Card for America’s Infrastructure. Retrieved from https://infrastructurereportcard.org
2. National Oceanic and Atmospheric Administration (NOAA). (2022). Billion-Dollar Weather and Climate Disasters: Overview. Retrieved from https://www.ncdc.noaa.gov/billions
3. International Energy Agency (IEA). (2021). The Role of Electrification in the Clean Energy Transition. Retrieved from https://www.iea.org/reports/the-role-of-electrification
4. U.S. Department of Energy. (2022). The Future of Electricity: The Need for a Modernized Grid. Retrieved from https://www.energy.gov/eere/slsc/maps/modernizing-electricity-grid
5. U.S. Energy Information Administration (EIA). (2022). Electric Power Monthly Report. Retrieved from https://www.eia.gov/electricity
6. U.S. Cybersecurity and Infrastructure Security Agency (CISA). (2022). 2022 Cybersecurity Threats to Energy Infrastructure. Retrieved from https://www.cisa.gov