We stand on the threshold of a new era in the electric services industry. I deliberately avoid the term "electric utility industry," because the future is not limited to the vertically integrated...
Gas-Power Infrastructure: The Missing Link?
identified and analyzed by FERC. 2
Natural Gas Infrastructure as Part of the Solution
The key to explaining how the natural gas infrastructure can become a part of the solution to surrounding power system constraints is to recap the similarities and differences between power transmission systems and gas transportation systems. By understanding these differences, gas/power development strategies can be set to assist in economically elevating the concern over power transmission constraints.
The individual markets for electric and the individual markets for natural gas are, for the most part, located in the same geographic areas. Although the actual load requirements may be different and occur during different seasons of the year, their market areas are still the same.
The generation of electric and the supply commodity needed by power markets can be equated to the development of natural gas reserves, which is the supply commodity needed by the natural gas markets. In both cases the commodity must be transported to the ultimate consumer.
The major difference between the two commodities is the location where the commodities are developed, how they are produced, their ability to be stored, and the distance and method that the commodities are transported. Relatively speaking, the commodity of power is produced in the general area where the electric load requires it, while the commodity supply for natural gas is not located near the geographic area of market consumption. Natural gas must be transported greater distances from its point of origin to the point of consumption, and in some cases stored prior to consumption.
It is the differences between electric and natural gas that can be leveraged to address and potentially solve the transmission constraints.
Natural Gas Transmission Systems
Gas transmission systems are comprised of pipe systems, compression facilities, and storage facilities, all used to transport the gas commodity from the production areas to the consuming markets. The basic design of these transmission systems allows for the peak-day requirements of the market to be delivered on an as-needed basis.
This ability of gas transmission systems to meet peak-day requirements is accomplished through sizing the pipeline system, compression facilities, and storage facilities to meet the peak-day requirements of their designated market. Conceptually, gas transmission systems have the capacity required to meet their required load demand through the total length of their system from the production area to the market. This may not be the case for all systems because of different configurations, but in general gas transmission systems are all designed to meet peak-day load requirements.
These gas transmission systems, which extend across the contiguous United States, are only fully utilized during high natural gas load requirement periods. At other times, they are available to the power generation market during periods of decreased usage by the gas market. These gas markets could be geographically overlapping with power markets that are faced with insufficient generation capacity and constraints on their power transmission systems. Because of the geographic location of these pipeline systems, they also traverse the power transmission paths between electrically defined zones. In many cases, where no pipeline infrastructure presently exists