Abstract: The increased use of renewable electric power generation, particularly wind, will require electric power systems to provide back-up power to firm the generation from these intermittent sources of electricity. Natural gas-fired generation is a logical, low-cost choice for providing this back-up firming capability. This study evaluates the implications of the increased use of natural gas-fired generation for firming renewable resources for natural gas transportation infrastructure planning and pricing. Firming capacity in this study is the amount of non-wind generating capacity needed to meet shortfalls in actual wind output with respect to forecast wind output, that is, to compensate for the forecast uncertainty. To date, there has been little formal analysis of this subject. This study provides a systematic review of the issues in order to inform policy makers and other stakeholders about the operational and regulatory issues raised by deploying significant natural gas fired generators to back-up intermittent power sources. The study raises several questions, including: – What is the level of natural gas pipeline infrastructure that will be needed to firm intermittent generation while still meeting the needs of other gas transportation customers? – How do industry and regulators ensure that natural gas pipelines can meet the operational needs of these back up gas-fired generators? – How can industry and regulators ensure that these generators contract for the appropriate natural gas transportation service? – Who will pay for necessary gas transportation infrastructure expansions and other added costs? This study highlights issues that policy makers should be consider and address if intermittent renewables generation is to become a reliable portion of electric power supply. A clear policy on how and by whom the increased costs are to be borne is necessary for the natural gas industry to have the appropriate incentives to invest in providing the services necessary for back-up gas-fired generators. The issues highlighted in this study are fully corroborated by the recently released white paper: Natural Gas in a Smart Energy Future (Gas Technology Institute, 2011). This white paper, sponsored in part by the INGAA Foundation provided an independently developed industry-wide vision that highlighted the strategic value of integrating multiple sources of natural gas and electricity.
Study Contact: Hoffmann, Richard R.
The utilization of a gas-fired generator for firming and, in turn, the utilization of pipeline infrastructure and services to support a generator for such purposes, will be sporadic and relatively infrequent. The challenge for natural gas system planners is accommodating the rapid ramp-up and ramp-down of gas-fired firming generation which can cause major changes in gas requirements within minutes. Making sure gas will be there when needed, and having an alternative home for gas when it is not needed, will require a combination of new natural gas facilities and management systems.
These backup generators may call on the pipeline system with little or no notice. The pipeline may need to dedicate firm capacity to provide such service—even though the capacity is used infrequently. Cost recovery of such lightly utilized assets is complicated because the users of the assets typically are unwilling to pay relatively high unit costs if they are uncertain that such costs can be recovered in the price of their product or service.
As part of examining the impact of intermittent renewables generation on gas-fired generation and natural gas infrastructure, ICF first analyzed impacts of renewable generation on the electric system. This analysis includes projections of the growth in renewables generation over time on both a national and regional basis. In addition, the analysis provides seasonal and daily patterns for renewable generation to understand the degree of intermittency of renewable generation. Further, the analysis considers both the known variability of renewable generation and the inherent forecast uncertainty for intermittent renewables generation. The study forecasts the amount of gas-fired generation and corresponding gas use that could be needed to firm up intermittent renewables generation. The study investigates some of the resulting impacts on natural gas transportation infrastructure, including potential impacts on system operation. The study next projects the amount and cost of gas transportation infrastructure that may be needed and the resulting unit costs of natural gas transportation services needed to support this infrastructure expansion. This section of the report also addresses regulatory cost recovery issues.
The study distinguishes between expected variability of renewable generation, specifically wind generation, and unexpected variability. When industry observers and analysts refer to intermittency, they are referring to this forecast error. Thus, forecast error must be backed up, or firmed up to create a reliable electric system.
Historically, intermittent generation has been firmed by relying on various forms of back-up generation, most notably gas-fired generation. Gas-fired generation has been a reliable and cost-effective means of firming intermittent renewables generation. Therefore, it has been the most widely used means to back up intermittent generation to date. To serve these generators, a pipeline may need to run its compressors more frequently and with less notice.
In short, there are many implications for the gas infrastructure associated with supporting firming services, all of which need to be considered thoroughly as intermittent generation continues to grow.