Ten years ago, 22 percent of electricity generation came from natural gas plants. This has grown rapidly, and today, 32 percent of our power mix is gas-fired. Although conventional wisdom says natural gas will continue its U.S. expansion and continue to gain a larger share of the market, there are several reasons gas’ reign may come to an end — and in fact, rather quickly.

If this happens, it will have far-reaching consequences for gas generators and many others, too. The Rocky Mountain Institute just reported that this dynamic could cost investors billions if the gas industry underestimates clean energy growth and doesn’t adjust their plans to build more than $100 billion worth of gas capacity.

What factors could make this possibility a reality and end natural gas’ pole position in the energy race? There are three:

1) Too much capacity for current, future demand

First, there is simply too much natural gas capacity in the market today. Combined cycle natural gas plants, the most efficient configuration, operate at around 55 percent of their capacity. That has remained almost flat for the last three years, data show. There remains plenty of room for more electricity to be generated with the existing fleet if it is needed — but it may not be.

Electricity demand dropped last year and has been essentially flat for several years. There are multiple reasons for this.

• Homes and buildings, historically responsible for about 40 percent of our power demand, have become more efficient. So have all the technologies we use at work and home.
• Utility investments in efficiency programs are paying off.
• Industrial energy use has been falling for five years as the U.S. industrial base shifts, and its demand now sits at 2010 levels, according to EIA data.

Trends like these and others have enabled us to decouple energy consumption from economic growth. The Bloomberg New Energy Finance chart below shows that because we have become more efficient in many parts of the economy, no longer does a growing GDP mean energy demand will follow.

In addition, electricity generated from natural gas is behind in a line that includes significant renewable generation slated to come online. With wind alone, some 30 gigawatts is under development, especially in the Great Plains and Texas. For solar, it’s nearly 50 GW that are under construction or planned, mainly in the Southwest, Texas and the Southeast.

We’ve already seen the combination of too much capacity and more renewables force planned gas plants in places such as California and Virginia to be canceled. Plants in these regions face a higher risk of being canceled or retired early because they are in competition with bulk solar and wind that continue to become cheaper.

2) Gas lacks flexibility to ramp up, down quickly

Second, when engineers designed natural gas plants, they were built to meet the demands of the Edison-era electric system with central generation and distribution where electrons flowed in one direction. Many were built to be turned on and left to run for a long, long time. Nonstop.

But with intermittent renewables making up 17 percent of generation today, demand is coming in shorter spurts. Natural gas plants can meet that demand, but ramping up and down more frequently costs more. When they warm up, fuel is used but no electricity is generated. Sometimes there’s not enough time between cycles to ramp down and then back up — so the plant stays fully ramped. All of this can shorten component life and increase maintenance. A study by the U.S. Department of Energy found that more frequent cycling increases operating costs by 2 to 5 percent for the average fossil-fueled plant.

Those increased costs could undercut what has been natural gas’ biggest, competitive advantage over other fuels — price, or a low cost, to be more specific. Already, that advantage is slipping. The high- and low-end costs for utility-scale solar and wind per megawatt-hour today are now within range of natural gas, as Lazard said in a recent report on the Levelized Cost of Energy.

3) Rapid advance of battery storage

Third, wind and solar aren’t the only energy sources that have gained ground. Battery storage may be in its infancy, but it’s coming on strong. Over time, storage will likely displace peaker plants and could erode the market for other natural gas plants. The peak price for natural gas peaking plants is still sizable at about $200/MWh, but storage is as close as it has ever been — in the high $200s/MWh. And that gap will shrink, too.

Already, we are seeing storage’s impact. Earlier this year, the California Public Utilities Commission voted to require PG&E to solicit bids for energy storage to replace three natural gas plants used during peak energy demand. This will likely continue and that will push U.S. producers to export more natural gas, similar to what has been happening in coal markets in recent years.

These factors will force natural gas operators to look for new solutions to reduce operating and maintenance costs that continue to increase. We’ve seen more and more operators turn to new tools like artificial intelligence to improve asset performance management and boost the bottom line. Companies across the energy sector are increasingly looking to turn their data into an asset.

Whatever strategy generators employ, it’s clear that turbulent markets and disruptive technology will require every fuel source — even those that are currently winning on low costs — to become even more efficient. No source’s reign is secure, not even natural gas.

Michael Donohue has worked for two decades at the intersection of energy and technology. He is Vice President of Utilities and Thermal Generation at Uptake, an industrial artificial intelligence software company. Previously, he was a GE Power executive.