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NERC Calls For More Gas-Power Coordination, Warns About Aliso Canyon

The North American Electric Reliability Corp. (NERC) on Tuesday again sounded an alarm about risks related to increasing reliance on natural gas-fueled power generation. Portions of California are seen to be particularly vulnerable due to the outage of the Aliso Canyon natural gas storage facility.

In a "Short-Term Special Assessment," NERC said areas where there is a growing reliance on natural gas for power generation are increasingly vulnerable to consequences of gas supply interruptions. This is true in winter as gas demand peaks for space heating uses, and it's true in summer, the peak period for power demand. NERC has raised such concerns previously (see Daily GPIDec. 22, 2015).

The assessment focuses on areas with gas generation penetrations of greater than 40%, which includes Northeast Power Coordinating Council (NPCC) -- New England, NPCC -- New York, Electric Reliability Council of Texas (ERCOT) and Western Electricity Coordinating Council -- California/Mexico (WECC CA/MX).

Greater coordination between the power and natural gas industries could "lead to a more resilient bulk power system and increased situational awareness of potential fuel supply shortages," NERC said.

The assessment also recommends that NERC and the WECC convene a meeting with affected industry organizations to identify reliability impacts of the outage at the Aliso Canyon storage facility in California, the fourth largest natural gas storage site in the United States, and to develop mitigation strategies.

"The outage at Aliso Canyon is the most recent demonstration of how [bulk power system] reliability is affected by the increasing interdependency between the electric and natural gas industries," NERC said. While the mitigation measures being undertaken will help reduce the risk of electricity service interruptions, they do not eliminate the risk."

The California Independent System Operator has also been raising concerns about electric reliability in the state because of the shutdown at Aliso Canyon (see Daily GPIMay 23).

"Southern California may face reliability challenges in summer 2016, possibly stretching into winter 2016/2017 and summer 2017, and due to the reduction of capacity at Aliso Canyon," NERC said in its new assessment. "This is reflected in the 'extreme scenario' for summer 2016 and summer 2017 as that scenario included outages of the 17 gas plants in the Los Angeles Basin that rely on Aliso Canyon.

"Operations in Southern California could be further impacted by the loss of import capacity. In both the summer 2016 and 2017 extreme scenario cases, a reduction in net imports would likely result in adverse impacts. Overall assessment of the WECC footprint doesn't show any significant adverse impacts for upcoming seasons, except under the 'extreme scenario' for summer 2017 and summer 2018. This is due to the review of the California-Mexico area in aggregation."

In ISO-New England, NERC said about 8.2 GW of proposed generation is natural gas fired, representing about 60% of the new capacity being installed by Summer 2016. "The area has limited natural gas pipeline capacity, despite the tremendous growth in natural gas-fired generating capacity," the assessment said. "This, coupled with growing demand from the heating sector, results in existing pipelines running at or near maximum capacity most of the time, particularly so in winter."\

In the New York region natural gas is one of the predominant fuel sources, but the region has more than one gas pipeline feeding generating plants and supplying firm customers, NERC said. "Hence, based upon the operational risk metrics, the New York region is not projected to experience tight operational margins for upcoming seasons."

In Texas, natural gas, at 48.3%, continues to be the dominant fuel used to generate electricity in the ERCOT area, followed by coal at 28.1%. Last year wind moved from fourth to third, at 11.7%, providing about 40.8 million MWh during the year. Wind surpassed nuclear power, which increased slightly from 2014; nuclear power provided 39.4 million MWh, or 11.3% of total energy used in ERCOT, according to NERC.

Texas is the largest producer of natural gas in the U.S. and also has the greatest number of miles of natural gas pipeline. "There has been extensive pipeline construction over the last 10 years as a result of development of unconventional gas supplies in the Barnett and Eagle Ford shale areas," the assessment said. "The ERCOT area has sufficient natural gas supply infrastructure to support gas-fired generation requirements for the next 18 months and beyond."

John Moura, NERC director of reliability assessment and system analysis, said, "Coordination efforts and situational awareness are increasingly more important as dependence on natural gas has increased. Operational risk assessments, coupled with reliability studies, provide the insights and forewarning needed to understand an electricity system's sensitivity to the vulnerabilities of natural gas-fired generation and identify potential mitigation strategies."

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