Intelligence brief: Gas provides third of new capacity; NY checks pipeline's role in nuclear incidents
Gas industry news you need to know
Natural gas just beaten by solar as top source of new capacity
Natural gas will account for almost one-third of the new utility-scale generating capacity added to the US power grid in 2016, according to the Energy Information Administration.
About 8 gigawatts is expected to be added this year, slightly above the 7.8 GW average annual additions in 2011-15. Four states plan to add more than 1 GW of natural gas-fired capacity this year: Pennsylvania (1.6 GW), Virginia (1.4 GW), Florida (1.3 GW) and Texas (1.1 GW).
The EIA expects more than 26 GW to be added to the power grid during 2016, of which solar (9.5 GW), natural gas (8 GW) and wind (6.8 GW) will account for about 93% of the total additions.
Natural gas from utility-scale facilities was used to generate 1.335 billion megawatt hours of electricity in the US in 2015, 18% higher than in 2014. It placed a close second in 2015 behind coal – which accounted for 1.356 billion MwH of power generation.
Independent power producers accounted for 46.9% of all natural gas-fired power generation, with electric utilities accounting for 46.2%, the industrial sector for 6.5%, and the commercial sector for 0.6%. Independents accounted for 39.1% of the overall 4.087 billion MwH of electricity generated from all sources in 2015, electric utilities for 57.0%, and the industrial and commercial sectors for the remaining 3.9%.
Several large utility-scale natural gas plants are expected to come online in the eastern US in 2016 (Source: EIA)
New York investigates role of pipeline in nuclear incidents
New York Governor Andrew Cuomo has asked the Federal Energy Regulatory Commission to halt the extension of Spectra Energy’s Algonquin pipeline until a review can be completed into a series of incidents at a nearby nuclear facility.
At Cuomo’s instruction, several government departments are investigating “multiple unplanned shutdowns, a transformer fire that triggered the declaration of an unusual event level emergency, and most recently, a radioactive tritium leak that has caused groundwater radioactivity levels to rise more than 65,000%”.
The Algonquin Incremental Market (AIM) will expand the pipeline of the Algonquin Gas Transmission system, which runs through five states: New York, New Jersey, Connecticut, Rhode Island, and Massachusetts. The AIM project is due for completion in November 2016, according to Spectra.
The project includes 20.1 miles of 42-inch diameter mainline take-up and new pipeline in New York and Connecticut, addition of six new compressor units at five existing compressor stations in New York, Connecticut and Rhode Island, and modifications to existing meter stations in New York, Connecticut and Massachusetts.
“The AIM Project’s path will require horizontal directional drilling under the Hudson River and adjacent to Indian Point. While the applicant has committed to build the pipeline to a more stringent standard on the Indian Point grounds, including laying two concrete liners above the pipeline to prevent excavation damage, burying the pipeline deeper than required, and using a stronger grade of steel than is required even in high consequence areas, it is imperative to determine if this is enough in light of the recent significant tritium leak and other operational difficulties at the nuclear facility,” Cuomo wrote to FERC.
Spectra Energy Partners was yet to make a public statement at time of publication.
FERC approves NYISO scarcity-pricing
FERC has approved the New York Independent System Operator’s (NYISO) proposal to incorporate scarcity pricing into real-time optimization.
NYISO uses scarcity pricing to refer to the pricing rules used for energy and certain ancillary services in real-time during periods when it has called on “special-case resources” (SCR) and the “emergency demand-response program” (EDRP) to provide load reduction to assist in maintaining system reliability.
Special-case resources are “demand-side resources whose load is capable of being interrupted upon demand at the direction of the ISO, and/or demand-side Resources that have a local generator, which is not visible to the ISO’s market information system and is rated 100 kW or higher, that can be operated to reduce load from the New York State transmission system or the distribution system at the direction of the ISO,” according to the FERC report on the decision.
Under the existing scarcity-pricing mechanism, the NYISO performs an after the-fact test that determines whether a scarcity event occurred – i.e. whether the amount of SCR/EDRP resources activated exceeded the amount of unscheduled operating reserves. Now, NYISO may incorporate this process into the real-time optimization, “which will improve real-time price formation, reduce the potential for uplift costs, and increase price transparency,” FERC said in its verdict.
“Incorporating scarcity pricing into the real-time optimization will reflect actual operator actions without the need to adjust prices on an after-the-fact basis. Once these changes are implemented, prices will more accurately reflect resource costs, which will send market participants improved market signals,” FERC said.