The North American Electric Reliability Corp. urged electric industry planners Wednesday to begin incorporating the risk of natural gas supply interruptions in their reliability and resource assessments.

In its second major report on the growing interdependence between the natural gas and electric industries, NERC also identified gas-related reliability risks and mitigation strategies and recommended increased communication and coordination between the two industries.

“Resource planning and adequacy assessments in some areas do not fully account for the risk of disruptions in the natural gas and other fuel supply chains,” NERC wrote, noting that such assessments typically assume the availability of fuel.

Trends

NERC noted that natural gas has risen from 17% to 25% of electric generation over the past decade and is projected to provide 50% of peak demand by 2015. At the same time, natural gas demand from transportation, manufacturing and exports is also expected to increase.

Unlike fuel oil and coal, natural gas is not easily stored on-site, meaning that generators must rely on just-in-time deliveries.

Most gas peaking units and many intermediate and baseload units have interruptible gas transportation contracts, leaving them increasingly vulnerable to interruptions during times of peak gas demand.

In NERC regions reporting such data, about 58% of gas‐fired capacity has firm supply. PJM reported that all of its dual-fuel generators and less than half of its other gas-fired units had firm fuel transportation contracts.

“As gas consumption for both power and non‐power uses has grown, the availability of interruptible capacity has declined, especially during periods of peak gas demand,” NERC said. “… Although generators may have contractual obligations to perform, performance incentives, particularly in competitive wholesale electricity markets, may not be strong enough to incentivize generators to procure firm or otherwise reliable fuel supplies.”

History of Interruptions

Using its Generator Availability Data System (GADS), NERC identified 1,240 cases over the last 10 years in which gas-fired generators reported outages due to lack of fuel. Almost half of the incidents occurred in the Reliability First Corp. (RFC) territory, which includes most of PJM.

Regions reported average lost capacity of 96 MW to 140 MW and outage lengths of 5½ hours (Florida Reliability Coordinating Council) to 47 hours (RFC).

The report summarizes several notable incidents, including February 2011, when the Southwest suffered rolling blackouts and major gas curtailments as a result of extreme cold. More than 250 electric generating units experienced outages totaling 1.2 TWh.

The 2011 incident also exposed the gas industry’s dependence on electricity: While most gas curtailments were the result of wellhead freeze‐offs, more than a quarter of the lost gas supply was due to the loss of electric pumping units or compressors.

Vulnerabilities

Gas-fired generators are vulnerable not only to supply interruptions but also to reduced pipeline pressure, which can persist even after gas starts flowing again.  NERC said critical gas generators should consider on‐site booster compression to improve reliability.

Generators also require consistent gas quality. Gas with a high British thermal unit (Btu) level from high ethane, or propane compositions can burn too hot in low‐nitrogen oxide (NOx) burners. “In cases where a number of gas‐fired units obtain their fuel from the same pipelines, changes in natural gas heat content can result in multiple unit trips at nearly the same time,” NERC said.

Risk-based Approach Needed

NERC recommended planners begin conducting a “three-layer” analysis of regional interdependencies and risks.

Layer 1 would require PJM and other system operators to compare their gas load for various weather conditions to the capacity of their gas infrastructure under normal operating conditions.

In Layer 2, the same gas load duration curves are compared to gas infrastructure capacity under contingencies, such as a compressor station outage or mainline capacity reduction.

NERC outlined such a scenario for a pipeline serving six gas-fired generators totaling 3,500 MW. The loss of all primary and backup compressors at a compressor station on the line would result in loss of all 3,500 MW within 110 minutes. Under the line break scenario, gas flow would be eliminated, resulting in a loss of all generation in about 16 minutes.

The final step in the three-layer scheme is the performance of a Monte Carlo analysis to provide a probabilistic assessment on how often gas-fired generators would lose fuel under a wide range of weather and gas supply conditions.

Such analyses requires good data, but the gas industry has no comprehensive statistics on interruptions similar to NERC’s GADS data on generators. As a result, gas outage data would have to be estimated from several sources, including pipeline bulletin boards, accident reports filed with government agencies and industry surveys.

Operational and resource planning implications

NERC also recommended increased training of pipeline and electric system operators to enhance cross-industry understanding and information sharing. NERC said electric Balancing Authorities and Reliability Coordinators may not “have an adequate understanding” of the information available to them under FERC order 587, which requires gas pipelines to post information on issues such as capacity constraints, gas quality warnings and scheduled maintenance.

“While the generators’ fuel managers may understand the critical and non-critical notices the information may not be readily communicated or understood well enough by the BAs or RCs,” NERC said.

Electric “operational procedures should include formalized coordination with the gas supply and pipeline industry, as well as emergency procedures during extreme events,” NERC said.

Dual Fuel

About 125 GW of gas‐fired generation, 35% of gas capacity under NERC jurisdiction, has dual‐fuel capabilities. NERC said state and federal environmental agencies should consider relaxing rules regulating backup oil use and emissions to maximize the flexibility of such units.