Continuing to Grow
Natural Gas Usage Rising in Electricity Generation
The electric power system’s mix of generation provides capacity and generates electrical energy using a variety of fuels, which may include natural gas, nuclear, coal, oil, hydroelectric, and several types of renewable resources. Fuel availability, costs, and public policies, such as environmental initiatives and siting requirements, affect the amounts, types, and locations of resource development. A lack of diversity of fuel supply can create reliability risks and economic exposure to price spikes resulting from natural disasters and political events. Regional solutions can mitigate these risks by providing access to a variety of fuels, such as by ensuring dual-fueled capability for generating units and having sufficient transmission infrastructure that accesses diversified fuels by wire.
The fuel diversity problem is not new, but the electric power industry seems to constantly rediscover it. Over the past 50 years, the United States has witnessed the development of “too cheap to meter” nuclear plants and the conversion of high-emitting coal-fired generating plants to relatively low-polluting oil-fired units. This changed as the result of the Three Mile Island accident and public opposition to nuclear power. The oil embargoes in the 1970s triggered plans for transmitting coal by wire from the Midwest to the Northeast and the development of natural-gas-fired generation. Natural-gas-fired generation is now viewed as the bridge to the long-term promise of a power system relying on “smart grid technologies,” energy efficiency, and renewable resources.
The worldwide supply of natural gas has grown with the increased consumption of natural gas by residential, commercial, industrial, and electric power generation users. The upsurge in the use of natural gas to generate electricity is the result of the addition of new efficient combined-cycle natural-gas-fired units over the past decade; the recent relatively low price of natural gas; and the displacement of old, less efficient, and high-emitting oil and coal units in economic dispatch. The reliance on natural gas could be further increased by the loss of other types of generation subject to risks, such as nuclear and hydro units that may not be relicensed. Accompanying the greater use of natural gas are concerns regarding the need for sufficient natural gas pipeline capacity and gas supply to the pipelines during summer and winter operating periods. And systems with large amounts of variable resources provide particular fuel-management challenges for back-up supplies and ancillary services, which can be especially difficult to coordinate with natural gas systems.
The dependence on natural gas also exposes the power system to all types of natural and geopolitical events that could interrupt supplies.
This issue of IEEE Power & Energy Magazine discusses several case studies of fuel supply risks and how these risks to reliability and electric energy costs are being addressed. Risks have been quantified through studies that identify fuel supply limitations and the lessons learned from operating experience. Greater fuel certainty is being achieved through better coordination of electric system needs with fuel supplies, improvements to the natural gas and electric power system infrastructures, and new market incentives that reward the secure operating performance of resources. The articles in this issue include:
- a summary of operating experience, studies, and plans for addressing New England’s heavy dependence on natural gas-fired generation
- a review of natural gas issues for all of South America and a comparison of fuel-management issues for Brazil and Chile in more detail.
- an overview of the European Union (EU) electricity and natural gas sectors by focusing on the specific case of mainland Spain
- an assessment of energy adequacy and reliability issues in Turkey that demonstrates the importance of coordinating the planning of the power transmission network with the natural gas pipeline network
- a description of fuel mix issues and the electric power system plans of South Korea
- a status of an innovative and comprehensive study of the adequacy of the natural gas system to meet the fuel requirements of electric generators across most of the entire Eastern Interconnection of the United States
- the “In My View” column, which suggests a means of improving coordination between the electric power system and the natural gas system.
New England continues to deal with fuel certainty issues using the lessons learned from operating events and planning analyses. Proactive planning for the both the short- and long-term operation of the system has assessed the vulnerabilities to the regional reliance on gas supplies and the benefits of having a more reliable access to natural gas, dual-fuel capabilities, and other fuel sources. The region has shown that system reliability is improved through greater coordination between the electric and natural gas industries, planned infrastructure improvements to both the natural gas and the electric power systems, and better performance of resources.
South America presents interesting case studies of fuel supply planning. Natural resources are unevenly distributed across national boundaries, which have different regulatory structures. The abundant natural gas reserves in Brazil remain largely undeveloped, and Chile is a net importer of energy. Both Brazil and Chile are facing fuel supply challenges, and they are addressing the natural gas system interactions with the electricity sector. The advantages of long-term planning and learning from both operating and regulatory experience are evident. The discussion of fuel certainty issues for both countries is important given the development of renewable resources.
The EU is a net importer of energy that already has considerable development of renewables, and these resources are expected to become increasingly important. An overview of the electricity and natural gas sectors for the EU, and mainland Spain in particular, are discussed as examples where the integration of renewables has created a strong link between the operations of the electricity and natural gas systems. This calls for coordinated gas and electric power operations and for the coordinated long-term planning of both electricity and natural gas facilities. The role of markets and physical considerations, such as natural gas storage, are important considerations.
Turkey imports almost all its natural gas, and the interdependence of the electricity grid and natural gas pipeline network presents challenges. Risks associated with the availability of electric power generation when considering natural gas contracts and pipeline constraints are addressed, with special attention to energy adequacy and reliability. The importance of coordinating the planning of the power transmission network and the natural gas pipeline network in Turkey is emphasized.
The national fuel mix plans and the electric power system plans of South Korea show how this country approaches overall fuel policies to address reliability needs, economic performance, and national security. Examining both primary and secondary fuel usage, such as electrical consumption, is vital to energy policy planning. South Korea does not currently have natural gas pipeline or electrical transmission interconnections with neighboring countries but has considered pipeline interconnections with Russia and participation in super grids with several countries in northeast Asia. National security remains an important consideration.
The United States faces uncertainties surrounding the continued operation of older coal generation units, the increased penetration of renewable resources, and the aging or retirement of certain nuclear units, which have exposed vulnerabilities in the natural gas supply chain. The growth of natural-gas-fired generation is expected to continue and to present additional fuel certainty challenges to the electric power industry. The interdependencies of the electric power and natural gas systems across the Eastern Interconnection are the subject of a multitarget research project sponsored by the U.S. Department of Energy, including the participation of PJM Interconnection, Midcontinent Independent System Operator (MISO), New York Independent System Operator (NYISO), ISO New England (ISO-NE), TVA, and the Independent Electricity System Operator of Ontario. Given the operating challenges of the polar vortex, this major and technically challenging research project is of vital importance and is very timely.
As coeditors, we express our deepest appreciation to the authors, and it is our sincere hope that you enjoy the articles as much as we do. We also express thanks to Mel Olken for providing this wonderful opportunity and for his many years of leading IEEE Power & Energy Magazine.