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Implications of Greater Reliance on Natural Gas for Electricity Generation. Study Identifies Challenges from Large Switch to Gas by Electric Utilities. Natural Gas Demand & Supply Level Unprecedented Infrastructure Requirements: Interregional Pipeline & Underground Gas Storage

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Presentation Transcript
study identifies challenges from large switch to gas by electric utilities
Study Identifies Challenges from Large Switch to Gas by Electric Utilities
  • Natural Gas Demand & Supply Level Unprecedented
  • Infrastructure Requirements: Interregional Pipeline & Underground Gas Storage
  • Operational Challenges
  • Retrofitting Means Replacement
    • Permitting challenges
  • What’s It All Cost?
  • Download Complete Study at:

https://appanet.cms-plus.com/files/PDFs/ImplicationsOfGreaterRelianceOnNGforElectricityGeneration.pdf

Implications of Greater Reliance on Natural Gas

many rules driving electric utilities to gas
Many Rules Driving Electric Utilities to Gas

Implications of Greater Reliance on Natural Gas

gas demand varies depending on resource mix but more gas required
Gas Demand Varies Depending on Resource Mix, BUT More Gas Required

Implications of Greater Reliance on Natural Gas

how much gas would we need is there sufficient supply
How Much Gas Would We Need & Is there Sufficient Supply?
  • To Convert Existing Coal-Fired Capacity to Natural Gas:

14.1 Tcf per year

  • Is There Enough Supply?
    • Not without Shale-deposited supply and/or much higher prices
      • Even with Record-level proved reserve additions in 2007, there were not many new discoveries
    • Objections to hydraulic fracturing create uncertainty
      • Uses lots of water
      • Contamination concern if fracing liquids migrate
      • Seismic activity
      • Claims that emissions may be higher

Implications of Greater Reliance on Natural Gas

slide6
Additional Natural Gas Pipeline Capacity Needed if all Existing Coal Generation Switched to Natural Gas

Implications of Greater Reliance on Natural Gas

infrastructure pipelines not evenly distributed each pipeline has different delivery capacity
Infrastructure: Pipelines Not Evenly Distributed & Each Pipeline has Different Delivery Capacity

Implications of Greater Reliance on Natural Gas

natural gas storage geography matters
Natural Gas Storage: Geography Matters
  • Storage needed due to large variation in Electric Generation load and therefore Natural Gas burn
  • Must take all gas ordered from pipeline & gas must be ordered the day prior to use
  • Best storage is salt cavern because it can be filled and emptied multiple times (“high deliverability”)
  • Adding storage is not easy due to geology requirements and other factors

Implications of Greater Reliance on Natural Gas

not every state has access to natural gas storage
Not Every State has Access to Natural Gas Storage

Implications of Greater Reliance on Natural Gas

total cost close to 750 billion
Total Cost Close to $750 Billion

Excludes higher

commodity costs to

expand gas supply, or

local pipeline and

LDC expansion or higher MDQ costs.

Implications of Greater Reliance on Natural Gas