By Theresa Pugh, Theresa Pugh Consulting, LLC
Before you toss this edition of American Coal against the wall or speed dial ACC, I ask you to read this article in its entirety.
There are many positive reasons to generate electricity with natural gas. However, there are some operational issues and future – perhaps short term – challenges in infrastructure that could affect localized natural gas-fired generation (combined cycle generation or NGCC) reliability. Let me be clear. I am not predicting any national grid reliability issues, black outs, or brown outs with natural gas generation. And if you are in Texas with its extraordinary natural gas abundance, scores of compressor stations, and pipelines, you can skip to the next article. This article is for the rest of the country.
The convergence of the two industries, electric and gas, should inspire utility managers, fuel managers, and system planners to carefully think about the transition from coal to gas. Operational factors and timing should be weighed when contemplating keeping a coal plant or retiring it.
These infrastructure factors are outside the power plant’s fence line. As a result, for some regions of the country, decisions can look like three-dimensional chess. Weighing local infrastructure readiness against continued environmental compliance costs at coal plants is why I’m glad I’m not a power sector CEO.
In states that lack mature and robust natural gas infrastructure delivery (gas storage, pipelines and compressor stations), there might be a tipping point for over-reliance upon natural gas in the short term given the electric sector’s special requirements for localized reliability. This is not an argument against natural gas—but for a focus on infrastructure readiness.
Without knowing enough about the infrastructure components, some regions might move too quickly from coal to gas. Perhaps areas could also move too fast from coal to intermittent renewables backed up by NGCC gas plants if public pressure minimizes natural gas usage. Too many intermittent renewables (wind and solar) means following wild (California) combined cycle ramping cycles. New NGCC units can ramp with agility but tighter ozone (smog) regulations on NOx might limit future NGCC approvals. While the NOx emissions may be less than from larger coal plants, they might be emitted at lower stack heights than coal plants. It seems counter-intuitive but permit approval might not be automatic to convert from coal to NGCC at some sites due to future ozone regulations. NOx regulations might also limit placement of new pipeline compressor stations serving the NGCC plant and other customers.
Power plants might face some unexpected and localized downtime for natural gas delivery at individual plants because either a gas storage facility or local compressor stations/pipelines are under repair. Again, this is NOT a prediction of electric grid instability or threats to the Bulk Electric System (BES). This is about individual units with localized impacts. Some regions might be wise to keep some diversity in generation if the gas storage, pipelines and compressor stations aren’t ready.
There are two new regulatory drivers in the natural gas storage industry and the pipeline/compressor station sector that mean an unknown period of localized repair downtimes. The more significant is U.S. DOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) natural gas storage regulation. The second is EPA’s “OOOOa” methane leak detection and repair regulation for new pipelines and compressor stations commenced after September 18, 2015. The Trump administration says it will review EPA’s 2016 methane regulation. And a very recent announcement suggests that PHMSA wants to give the pipeline and storage industry more time for PHMSA compliance. Regardless of whether the compliance time is two years or two months, electric utilities need to be savvy about the consequences.