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Highlights

In the short term, increasing reliance on natural gas-fired generation poses limited threats to grid reliability, but the possibility of generator outages is growing as power and gas systems grow more intertwined, according to a special assessment by the North American Electric Reliability Corp.

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In its report released Tuesday, NERC said that the recent outage at the Aliso Canyon gas storage facility highlights a series of related changes that have occurred in the last 10 years -- significant dependency on a single and just-in-time delivery fuel source used for ramping capability, lower amounts of baseload and dispatchable generating capacity, increased variable and distributed resources, the growing need for system flexibility, gas system dependency on storage to maintain operating pressure and a lack of clear understanding of gas operating characteristics and their potential effects on power system operations.

"While coordination efforts between the gas and electric industries continue to improve, the potential still exists for a mismatch between the availability of natural gas delivery and demand from the electric sector," NERC said in a first-time assessment that looked at short-term risks in areas with significant natural gas-fired capacity.

NERC expects gas-fired generation to grow about 11% to 460 GW in 2018 from about 415 GW last year and 358 GW in 2009, according to the report, "Operational Risk Assessment with High Penetration of Natural Gas-Fired Generation." The gas- pipeline system may not be able to handle the rapid gas-fired fleet expansion, said John Moura, NERC's director of Reliability Assessment and System Awareness.

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In the past, gas-related reliability concerns have centered on the winter, when power plants and homes and businesses that use gas for heating compete for fuel, according to Moura. Now reliability concerns are increasing during the summer when electric demand is high and gas infrastructure faces maintenance outages, he said.

In its assessment covering the next two years, NERC focused on New England, New York, Texas and the California-Mexico part of the West, the areas where gas-fired generation accounts for at least 40% of the fuel mix.

Of the four areas, New England faces the greatest risk of outages, the assessment says. NERC found that, during the upcoming two summers, New England could experience "tight" operating conditions if the most significant gas pipeline into the region wasn't operating and the area experienced extremely high electric demand at the same time. ISO-New England has emergency operating procedures to address the extreme scenario, according to NERC.

NERC said in areas where gas makes up a large share of the generation mix, system planners need to more thoroughly examine reliability needs to see if additional firm fuel contracts or dual-fuel capabilities are required.

NERC-recommended resource and transmission planning efforts account for the possibility of major infrastructure outages, such as Aliso Canyon.

Also, the electric and gas sectors should continue their efforts to more-closely mesh operations, according to NERC. "Operating criteria, forecasting, commitment, scheduling, dispatch and balancing practices, procedures, and tools should take fuel supply chain risks into account and lead to mitigation measures to assist operators in maintaining [bulk power system] reliability,' NERC said.

--Ethan Howland, newsdesk@platts.com

--Edited by Valarie Jackson, valarie.jackson@spglobal.com