The North American Electric Reliability Corporation (NERC) last Wednesday released an assessment in which it raised serious concerns about the ability of an increasingly natural gas-dependent bulk power system to maintain reliability when the capacity to deliver gas supplies to generators is constrained.
“The combination of growth in natural gas demand within the electricity sector and its changing status among the gas-consuming sectors continues to significantly increase the interdependencies between the gas and electricity industries. As a result, the interface between the two industries has become the focus of industry discussions and policy considerations,” said NERC’s “2013 Special Reliability Assessment — Accommodating an Increased Dependence on Natural Gas for Electric Power.”
In a December 2011 report, NERC, which develops and enforces reliability standards for the North American bulk power grid, said the biggest obstacle to electric and natural gas industry cooperation was the structural differences between the industries. For instance, a pipeline system designed for seasonal swings in residential and commercial demand does not always accommodate the day-to-night, weekday-to-weekend and hourly swings in demand of the power sector, making it uneconomic for some generators to reserve capacity and creating unique challenges for future storage facilities, NERC said in 2011.
The latest report offered several insights about the bulk power system’s exposure to the increasing risks associated with gas dependency.
Over the past decade, it said, gas-fired generation rose significantly, to 25% from 17% of total power generation, and gas generation now the largest fuel source for generation capacity. Gas use is expected to continue to climb in the future. Independent System Operators (ISO) and Regional Transmission Operators (RTO) echoed this sentiment at a meeting on gas-power coordination at the Federal Energy Regulatory Commission earlier this month (see NGI, May 20).
In addition, gas is widely consumed outside the power sector, and the demand from other sectors — particularly coincident end-user gas peak demand during cold winter weather — critically affects the ability to provide interruptible transportation in the power sector. Also, natural gas is expected to play a growing role in offsetting the variability and uncertainty associated with renewable resources, mainly wind generation. As variable generation increases, swings in variable generation may call for dispatch of gas-fired generation at a larger and less predictable rate.
“The electricity sector’s growing reliance on natural gas raises concerns from ISOs, RTOs market participants, industrial electricity and gas consumers, national and regional regulatory bodies, and other government officials regarding the ability to maintain electric system reliability when the capacity to delivery natural gas supplies to power generators is constrained,” NERC’s report stated.
“The extent of these concerns vary from region to region; however, they are most acute in areas where power generators rely on interruptible gas pipeline transportation and where the growth in gas use for power generation is growing the fastest.”
Regional solutions will likely include a mix of mitigating strategies, increased natural gas and/or electric infrastructure, and dual or back-up fuel capability, according to NERC. “Dual-fuel capabilities and a variety of storage options may help bridge the gap between the uncertainties of gas availability during extreme events and maintaining a reliable source of operable capacity available to meet seasonal peak demands.”
Furthermore, “risks to gas supply shortages can largely be mitigated or reduced with the abundance and geographic diversification of shale plays across North America. With unconventional shale gas production spread across the continent, vulnerabilities in gas supply due to weather events can be mitigated or reduced by increasing production in unaffected areas.”
In preparation for the summer and winter extreme conditions, NERC said electric system operators need “enhanced observability of pipeline conditions, capacity availability, supply concerns, and potential issues affecting fuel for gas-fired generation.” It further noted that “formalized communication and coordination” with gas pipelines and suppliers are needed during extreme events.
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