Daily GPI / NGI The Weekly Gas Market Report / NGI All News Access

NERC Sees Summer Power as Adequate; Reliance on NatGas Grows

There should be enough power to go around this summer across the various regions of the North American Electric Reliability Corp. (NERC). But Texas could be squeezed if peak demand hits sooner than anticipated new generating capacity comes online. Also, as natural gas accounts for a larger portion of generating capacity across power grids, systems are having to adjust, NERC said Wednesday.

While NERC's "2014 Summer Reliability Assessment" finds peak demand forecasts have remained flat from last year, it remains concerned with the ongoing resource mix changes, the changing operational characteristics of resources, and the continued retirement of generation across the bulk power system.

"Reserve margins across North America appear to be sufficient for the upcoming summer," said John Moura, director of reliability assessment at NERC. "In ERCOT [Electric Reliability Council of Texas], new capacity resources coming online in early August will significantly improve the declining reserve margin trend observed over the last several years."

Summer reference margin levels are met. However, areas of potential challenges exist in the ERCOT and Midcontinent Independent System Operator (MISO) areas, NERC said.

ERCOT anticipates that four gas-fueled combined-cycle plants will be added in early August to support peak summer demand, but its system could face challenges in maintaining sufficient reserves if the summer peak occurs before this new capacity is available, according to NERC.

In MISO, anticipated reserve margin is slightly above the NERC reference margin level of 14.8% for the summer and lower than last year's assessment (18.1%). The reduction is attributed to generation retirements and suspensions, as well as the inclusion of the MISO-South region and the associated transfer limitations.

The shale gale is continuing to be felt in the power sector.

"The development of unconventional shale sources of natural gas -- particularly during the past five years -- has resulted in a substantial shift in the North American resource mix," NERC said. "As noted in NERC's "2013 Long-Term Reliability Assessment," natural gas is the fastest growing source of new capacity -- chiefly in PJM [Interconnection], MISO, New York, New England, and IESO [Independent Electricity System Operator (Ontario)]."

Since January 2011, the introduction and implementation of several environmental regulations, combined with natural gas availability, have contributed to the closure of 43 GW of generation capacity across the power grid.

"As highlighted in numerous recent long-term reliability assessments, the BPS [bulk power system] in North America is changing in many ways," the report said. "Each summer, NERC has observed incremental changes in the resource mix, which has trended toward a generation base that is now predominately (i.e., almost 40%) gas-fired generation, an increase of 28% [from] five years ago. The continued wide-scale retirement of coal, petroleum, nuclear and other baseload generation is largely being addressed by the addition of gas-fired and variable (e.g., wind, solar) resources."

Fuel supply and pipeline transportation risks are more pronounced during the winter months; however, pipeline maintenance and storage refills that occur during the summer months can limit the availability of natural gas for those generators that do not have firm service, NERC said.

"Much of the focus on electric and gas interdependencies targets conditions during the winter season when the availability of natural gas for electric generators competes with the high demands of residential heating," the report said. "However, the summer season presents a separate set of concerns regarding gas availability. Specifically, natural gas storage facilities are refilled during the summer season while several pipelines and pipeline compressor stations are also undergoing maintenance."

Other report highlights include attention to potential reliability impacts from the MISO-South integration and the effectiveness of associated measures designed to lessen potential impacts in neighboring areas. The drought conditions in the Southwest appear to be sustained this summer season, even though certain areas have seen improved reservoir conditions. NERC is continuing to monitor potential coal supply impacts caused by constrained rail service.

Copyright ©2018 Natural Gas Intelligence - All Rights Reserved.
ISSN © 2577-9877 | ISSN © 1532-1231 | ISSN © 1532-1266

Recent Articles by Joe Fisher

Comments powered by Disqus