Courtesy of ISO New England.
Resources for electric energy production in the region served by ISO New England. Natural gas has become the predominant fuel.

Natural Gas to the Rescue

Aug. 16, 2013
As more wind and solar generation gets added to the grid, so, too, does natural gas, both as a complementary and back-stop power source.

There really is no way to talk about adding renewables to the grid without talking about natural gas generation. For starters, the numbers alone are staggering. While wind, solar, hydro and other renewable power sources could contribute up to 10% or 20% of grid power within the next 20 years, natural gas generation has already doubled in the past decade and is on a pace to become the nation’s dominant generation source for the grid for decades to come.

In Texas and New England, gas generation already accounts for more than 50% of electric utility generation. Large new gas finds — such as shale oil deposits from North Dakota to Pennsylvania to Texas — purport to have the grid guzzling gas at a record pace for years to come.

Westar Energy’s Emporia Energy Center in Kansas uses seven natural gas combustion turbine generators to supply power to the grid. Courtesy of Black

Gas generation also plays an important role to backstop renewables and offers other benefits to the grid. It can be turned up or down quickly; firing up or turning down a natural gas plant takes but a fraction of the time it would to ramp up or down coal, nuclear or other major forms of generation. Gas also lends itself to a variety of scale. Natural gas-fired generation can be sized anywhere from distributed generation of 150 kW or less, all the way up to 600-MW, 800-MW and larger plants.

Gas also has something of a following as clean energy. While not as clean as wind or solar, compared to coal-fired generation, natural gas produces one-half as much carbon dioxide, one-third as much nitrogen oxides and 1% as much sulfur oxides. The U.S. Environmental Protection Agency  mandates regarding coal-fired generation emissions are a big driver in the coal-to-gas generation switch.

However, moving the grid to even greater reliance on gas presents its own set of issues and concerns. “Nothing can be categorized as simple or easy in the electric transmission world,” noted Flora Flygt, strategic planning and policy advisor for American Transmission Co. “With gas, we have very established procedures. People have been connecting gas to the grid for decades. But that still doesn’t mean it’s easy or without challenges.”

Catherine Elder, an analyst at the Aspen Energy Institute, added, “Sometimes you hear people saying there is a lot of gas out there and it’s really easy to switch, so just do it. But is it really all that easy? It’s not like you just connect a gas pipeline to a power plant and light the flame.”

Supply Gas Gently 

Natural gas supply is one of the major concerns. Again, analysts and the media are awash with studies heralding large supplies of North American natural gas into the foreseeable future. However, that still belies the questions: Where is that gas, relative to the electric grid or electric demand, and how capable are gas transportation systems — pipelines, mostly — at getting it to gas-fired generation exactly where, when and how the grid needs it?

“Twenty years out, what you see is you need more transmission because the locations of generation change,” said David Whiteley, executive director of the Eastern Interconnection Planning Collaborative. Many new gas plants, Whiteley explained, will be sited at and replace existing coal-fired generation, and thus will already have transmission connected. Further down the road, though, more new gas generation will come on-line as greenfield sites and, at these locations, companies will need to work to marry the engineering and economic differences between the natural gas and electric utility industries.

“Gas is only in the pipe when you nominate it and schedule it in advance,” noted Elder. “We nominate and schedule gas a day before we schedule electricity. Gas moves more slowly than electricity. You have very strict balancing rules on the gas side that don’t apply to electricity. Gas and electric people don’t talk to each other enough, and when they do, they often don’t speak the same language.”

Gas supply must be carefully matched to consumption on a daily and even hourly basis, Elder explained. Gas companies must deliver exactly the quantity to be burned. Undersubscribed gas left in the pipe builds pressure and must be vented to the atmosphere to prevent an explosion. On the other hand, too little gas pressure means the gas will not move. An example would be wind generation dying down quickly and a generator pulling excess gas all at once, resulting in a drop of gas pressure, strangling a turbine or engine, and cutting off generation.

Greg Crow, manager of energy logistics at Burns & McDonnell, issued another warning, noting that many gas pipelines are already fully subscribed with very high utilization rates. Thus, even if an electric utility or transmission provider is ready and willing to take the gas, does the existing pipeline have enough capacity to serve it? While expanding gas pipelines might not take as long or be as onerous as siting new transmission, new gas infrastructure coming into a plant might also bring about the need for compressor upgrades, burner changes and other equipment modifications, said Crow. So, upgrading the gas supply network to match transmission demands is not as easy and straightforward as some might have it.

Development of new sources of shale gas, enabled by hydraulic fracking and horizontal drilling, has led to major increases in reserves of U.S. natural gas. Courtesy of the Energy Information Administration.

Location, Location, Location

Plant siting of new natural gas generation also might have significant effects on transmission developments, in ways both obvious and a bit more subtle.

“It is tough to site coal or nuclear plants,” said Merwin Brown, director of electric transmission research for the California Institute for Energy and Environment (CIEE) at the University of California. “Natural gas does have the potential to build at a smaller scale and also to be closer to the population base.” This, Brown argued, would have the effect of reducing reliance on larger, longer-distance transmission. However, this discussion also introduces issues around generation and distribution at a smaller scale, such as distributed generation based on gas-driven technologies.

“Distributed generation adds operational flexibility but comes with its own challenges,” said Daniel Brooks, senior program manager at the Electric Power Research Institute (EPRI). “You might have to rethink things like how you ensure reliability with many more points of generation. How do you restore power when it goes out at multiple generation points rather than one central location? The transmission guys are going to have to learn how to deal with resources and scales that they are not familiar with.”

Brooks added that even without distributed generation, the siting of gas plants incorporates slightly different strategic elements than siting a nuclear or coal plant. “Gas companies will have to plan for any single contingency affecting many plants,” Brooks noted, citing earthquakes and line ruptures as a result of construction or of natural or man-made accidents, even acts of terrorism. “What is the probability of losing multiple nuclear or coal plants at once? Not very likely. But, if you have 15 gas plants all sited along one major pipeline, you could conceivably lose a lot of generation downstream due to an event upstream.”

Concerns about interruptions in gas supply are echoed by Elder, who notes that most new gas plants are perilously putting all their eggs in one pipeline, so to speak. “Very little of the merchant fuel fleet built in the 1990s has alternate fuel capability at the site,” Elder commented, citing the incremental cost of alternative fuel-handling equipment, storage and different environmental regulations for different fuels as obstacles. “I worked on about 40 power plants across the country,” Elder said. “Two of them had alternative fuel capability.”

Projected U.S. dry natural gas production by source. Supply outpaces domestic consumption by 2020, spurring net exports of natural gas. Courtesy of the Energy Information Administration.

Heat or Power?

Another gas supply issue is that natural gas is the nation’s primary fuel for residential and commercial heating, hot water and food preparation. Moreover, natural gas for heating is generally contracted with firm price and delivery commitments, while gas for electric generation is traditionally sold on more of a spot market, time-of-use or just-in-time basis. That traditionally would mean gas-heating customers get their capacity filled first, with grid generation left in the second position.

While that can be an issue in fair weather, it is only exacerbated in regions where heating gas demand spikes during cold weather. “The gas supply for electric generation is also used to supply heating, so can it always keep up?” asked EPRI’s Brooks. “What happens with a particularly long cold stretch?”

Gordon Van Welie, president and CEO of ISO New England, testified before a congressional committee in March that his ISO “experienced significant operational challenges” in January and February 2013 based at least in part on demand for heating gas, putting the supply of gas to the grid in question.

According to Van Welie, New England has developed a significant reliance on natural gas generation, with 52% of the region’s electric production coming from natural gas. At issue, he said, is the fact gas providers are incentivized to provide heating gas over electric generation gas.

“Electric supply and demand must be balanced on an instantaneous basis, and problems on the electric system require immediate action, often through the operation of fast-responding gas generators,” Van Welie testified. “But the natural gas and electric industries operate under different regulatory, contracting and operational structures.”

If generators have not contracted for gas prior to the electric operating day, the gas system may not be able to respond in real time, something Van Welie said was particularly problematic in New England, where the region relies on just-in-time interruptible fuel delivery. “It is clear that the gas system is inadequate to meet the demands of electric generators during peak periods,” Van Welie commented.

Gas and Renewables

While growing grid reliance on natural gas carries with it as-yet-unresolved issues, such as gas supply, plant location, power flows and economic drivers, few doubt that gas generation will continue to grow and likely dominate the electric power generation market for years to come. Of particular interest is the interaction between natural gas generation and renewables generation on the grid.

As a complement to renewables, natural gas is, once again, a fast-start, generally reliable backup for the intermittency of wind and solar power. Though there are still ongoing debates on the release of methane into the atmosphere and the geological implications of fracking, gas also is still credited with reducing harmful emissions from coal, which it often replaces.

Thus, more gas generation, in a way, advances the deployment of renewables. One could even see natural gas as an enabling technology while wind and solar develop, enjoy wider deployment and, perhaps eventually, see falling costs or better economies of scale.

On the other hand, the low price of natural gas can act as something of an economic disincentive to the installation of wind farms, solar arrays, biogas or biomass generation, or more hydro, if indeed gas prices are so low and supply so plentiful that the short-term economics favor natural gas too much.

“Gas makes a nice marriage with renewables in order to back them up, but if it becomes too cheap, it makes meeting your renewable portfolio requirements tougher,” commented Brown of the CIEE. “But transmission planning is getting longer and longer, and transmission is getting more expensive fairly quickly.”

Thus, Brown sees natural gas generation as part of a wider trend in transmission design, from systems of the past that he calls “deterministic and planned” to networks of today that are increasingly “real time and probabilistic.” Brown said that natural gas generation and renewables, like solar and wind, are both causes of and beneficiaries of such a change. Generation fuels that offer faster deployment and promise a reduced environmental footprint will continue to be popular, he argued.

“Renewables are becoming more competitive on the technical side, and gas helps that by being a good backstop,” added Ken McIntyre, vice president of grid planning and operations for the Electric Reliability Council of Texas. Natural gas now supplies an estimated 57% of electric transmission capacity in Texas, McIntyre noted, and he sees continued growth, slowed only slightly by low current natural gas prices delaying some gas development.

Finally, Terry Boston, president and CEO of PJM Interconnection, sees more natural gas in the future and predicts a possible reduction in the need for backbone transmission.

According to Boston, the PJM, New York ISO, ISO New England, Midwest ISO, Tennessee Valley Authority and Independent Electricity System Operator of Ontario, Canada, are all working together through a U.S. Department of Energy grant to study the adequacy of the natural gas system to meet the needs of the electricity transmission system in the eastern United States. “If new gas generation continues to be built in the East, close to the Marcellus shale production area and near the local load centers, the need for new backbone transmission will be reduced over time,” Boston concluded.

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