Nowadays everyone is pretty sure that there is plenty of natural gas supply to go around. Storage is bursting at the seams; production is close to record levels. Midstream infrastructure companies are busy developing new pipelines and additions to deliver shale gas to existing markets. Market analysts agree that new natural gas demand over the next decade will largely come from increased gas fired power generation. Is the current natural gas infrastructure configured to deliver gas to this new generation capacity? Today we report on emerging power industry planning concerns.
In a RBN Energy blog from a few months back (see “Git-r-done! It is Time to Break Down the Barriers Between Natural Gas and Electric Power”) Vince Kaminski provided an introduction to and synopsis of an important December 2011 North American Electric Reliability Corporation (NERC) report on Natural Gas and Electric Power Interdependency in the US (get a copy here). The NERC study focused on particular demand requirements of natural gas fired generation plants and the difficulties of existing gas distribution systems meeting those requirements efficiently. Concerns center around the ability of utilities with natural gas fired generation to secure firm supplies for their plants throughout the day as power demand ramps up and down.
The Federal Energy Regulatory Commission has also championed this issue – partially in response to rolling power outages in the Southwest during February 2011 that resulted from gas supply constraints. On August 28 2012 the Federal Energy Regulatory Commission (FERC) finished up a series of 4 regional technical conferences on the issue of gas-electric coordination designed to start the process of better operational coordination between gas and power schedulers. Better planning is needed to accommodate the increased use of natural gas to generate power due to: