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PJM Data Show Growing Interest in Gas-Fired Generation

Over the last two years nearly 70% of the new power generation plants proposed for the 13-state PJM Interconnection electric grid, which centers on the Marcellus and Utica Shales, would be fired by natural gas.

The queue of petitioners to be connected to the regional transmission organization's power grid includes 130 gas-fired projects that would add 68,948 MW of generation capacity, of which 49,459 MW were added to the books in the last two years. Overall generation proposals from all sources total 140,235 MW, of which 72,621 MW were added in the last two years.

It's a big number for natural gas, but it's also likely that only a fraction of the plants will actually be built, according to PJM spokesperson Ray Dotter. Power producers file prospective plans for generation facilities with the regional transmission operator, but a relatively small number are completed and connected to the grid.

However, an analysis of PJM's queue of potential power plants does show a trend. In Pennsylvania, for example, where natural gas production from the Marcellus Shale has been rocketing up, projects filed from the start of 2011 to date would add 15,091 MW of natural gas-fired power, a huge addition bringing the total proposed capacity to 17,225 MW.

New Jersey's queue of natural gas generation hopefuls exceeds 17,000 MW, with 9,700 added in the last two years; Virginia's total is more than 12,000 MW, with 7,600 MW added recently. Prospects for gas-fired power added to the PJM grid in Ohio and Maryland number between 6,000-7,000 MW each, with almost all of it joining the queue in the last two years.

It's not rocket science to trace the new interest in gas plants to the shale gas boom, coupled with the crackdown on greenhouse gas emissions from existing coal plants. More than 14,000 MW of coal-fired generation plants in the PJM region announced retirement last year, Dotter said.

The indicator of new interest in gas-fired generation is just that, an indicator. Dotter said that typically about 20% of the queued capacity is built. That's partly because there is a "low bar" for joining the queue. For an initial fee of a "couple thousand dollars" a project is added to the queue and PJM estimates the cost of connecting it to the grid. The expenses rise as the project moves farther along in the process.

"We just give you the numbers and you decide if the costs are prohibitive," Dotter said. PJM does not have the authority to stop a project.

So far two natural gas-fired projects in Pennsylvania have gone public with their plans. In the last week LS Power Development LLC received approval from authorities in North Beaver, PA, to construct a Marcellus shale gas-fired 900 MW plant as early as 2016.

And Moxie Liberty LLC, a subsidiary of Moxie Energy LLC, plans to open a 936 MW Marcellus shale-powered natural gas power plant in mid-2015. On its website, the company said it hopes to "take advantage of the abundant natural gas resources in the area and the skilled workforce that has developed around the domestic natural gas production" (see Shale Daily, Oct. 15, 2012).

About a fifth of the 130 gas-fired generation projects in PJM's queue are under construction or partially in service. The rest are "under study."

Queued projects that were listed as in service or suspended were not included in this analysis.

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