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Greater use of natural gas and renewables will potentially impact grid reliability, APPA tells House panel

From the May 13, 2013 issue of Public Power Daily

Originally published May 13, 2013

By Robert Varela
Editorial Director
The switch from coal to natural gas and greater use of intermittent renewables will impact utility operations and could affect electric reliability, APPA told the House Energy and Power Subcommittee May 9. "Given these trends, it is important that Congress continues to examine the short- and long-term implications of federal policies that promote more use of natural gas and intermittent renewables as fuels for electric generation on electricity prices and grid reliability."

"The shift from coal to natural gas for electric generation creates several challenges that must be addressed, including potential price volatility for utilities and their customers, inadequate pipeline capacity and storage, lack of flexibility in pipeline rate schedules to accommodate the needs of electric generation, and misalignment of, and lack of intra-day flexibility within, the gas and electric days," APPA said in a statement for the record of the subcommittee’s May 9 hearing on grid reliability challenges. There will be long-term implications from the greater use of natural gas for electric generation, APPA said. "Prices may be low today, but can easily rise in the years to come due to a variety of factors including potential new or existing regulations on hydraulic fracturing, increased utility and industrial demand, exports, and increasing use in the transportation sector."

In addition, "it is not clear yet whether there will be sufficient infrastructure or storage to accommodate the greater use of natural gas by electric utilities," APPA said. "While the Federal Energy Regulatory Commission (FERC) is examining how to promote greater coordination between the electricity and natural gas industries, no one knows whether all the changes needed for fuel switching on this scale can be accomplished in the time needed to comply with EPA regulations." Greater use of natural gas also poses market-related challenges, such as misalignment of gas and electric days and a lack of flexibility in scheduling, APPA said.

Generation from variable energy resources such as wind and solar poses unique operational challenges, APPA told the panel. "There are strong disagreements about who should pay for the construction of transmission lines that bring renewable power into the grid and issues surrounding the siting of such lines," the association added.

The subcommittee should evaluate all federal policies designed to promote renewables, given the competitiveness of some renewables, APPA said. "APPA members, in incorporating renewable generation into their resource portfolios, need the ability to evaluate specific renewable projects against one another and against distributed generation and energy efficiency/demand response measures," the association said. "Subsidies given to certain types of renewable generation can skew individual utility integrated resource planning processes and, on a macro level, our nation’s overall resource choices, leading to sub-optimally efficient resource outcomes."

Whitfield backs new pipelines, reform of subsidies for renewables
Given the changes in the generation fuel mix, "it is important that we think through what must be done to ensure that the lights stay on and that electric bills are affordable in the years ahead," Subcommittee Chairman Ed Whitfield said. New natural gas pipelines as well as storage facilities need to be constructed, but "we don’t have a lot of time to build them given the reliability challenges we face today and we have already witnessed this scenario in areas like New England."

Federal and state policies promoting wind and solar power "could easily backfire if we don’t address the difficulties of integrating these intermittent sources into the electric grid," Whitfield said. Noting that the production tax credit for wind was extended last year "much to the disappointment of many of us," he said "the long-term subsidization of certain generation sources, such as wind, can impair reliability and drive up electricity prices."


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