By - Jim Vess

Aging grid challenged by shift to renewable and natural gas generation, ScottMadden says

Energize Weekly, January 22, 2020

The aging U.S. electrical grid is facing challenges from just-in-time natural gas plant fueling and a growing demand for renewable generation, which it will not be able to meet without new investment and policies, according to a study by business consultant ScottMadden Inc.

“The grid is undergoing a shift in its generation mix,” the report, done for WIRES, an international utility industry trade group, said. “Driven by state policies and extended low natural gas prices, older thermal generation is being displaced by new, significant quantities of gas-fired and renewable (principally wind and solar) generation.”

These changes are being absorbed by a grid with aging transmission infrastructure including lines, transformers and substations.

In the PJM Interconnection, the nation’s largest grid serving mid-Atlantic and Midwestern states, some assets date to the 1960s with two-thirds of the assets more than 40 years old and over a third more than 50 years old, according to the system operator.

Investments, upgrades and new infrastructure, however, have been slow in coming.

“Transmission is critical to meeting our evolving clean energy and resilience objectives,” Cristin Lyons, energy practice leader at ScottMadden, said in a statement. “However, in spite of its essential role, transmission infrastructure remains extremely difficult to site and build. If we are to meet the myriad clean energy goals and increase the resilience of the grid, more transmission is necessary and policy should facilitate its development.”

Adding to the challenge are weather patterns and climatic trends the can create extreme conditions for the grid. Extreme weather, the report notes, is a significant cause of outages, particularly widespread outages affecting a large number of customers.

In New England, for example, cold winter conditions and just-in-time delivery of natural gas has combined to create tight situations for grid operator ISO New England.

During cold weather, the natural gas pipelines quickly reach capacity and are unable to fuel power plants, which can also be compromised by the weather conditions. “It must be acknowledged that renewable resources, which can be variable in output, can also constitute just-in-time resources,” the report said.

ISO New England has said that there have been multiple instances in recent winters when it was uncertain about whether power plants could arrange for the fuel – primarily natural gas – needed to run.

To address the issue, ISO New England implemented market design changes to create incentives for stocking adequate fuel and real-time emergency operating procedures. Similar fuel constraints mitigation efforts have been effected in Southern California and Arizona.

In the wake of major storms and other weather events, some steps at “grid hardening” have been taken. For example, after extensive damage from Hurricane Irene in 2011, Newark-based Public Service Electric & Gas spent $620 million on a program that included protecting, raising or relocating 26 switching stations.

The rapid growth in renewable generation, in large part spurred by state policies, such as Renewable Portfolio Standards (RPS), is also a grid management issue. Twenty-one states have an RPS. and 13 of them have standards requiring between 50 percent and 100 percent renewable energy.

A key question, the report said, is “how the increasing proliferation of renewable resources and their integration may affect these resilience elements and what kinds of complementary capabilities might grid integration bring to system robustness, resourcefulness, and recovery.”

Policies to promote new transmission and regional cooperation have been inadequate, the report said. In July 2011, the Federal Energy Regulatory Commission (FERC) issued Order 1000 aimed at increasing regional transmission development.

Progress, however, has been halting. “When compared to implementation of the regional planning processes under Order No. 1000, interregional planning processes are in their infancy and remain incomplete,” the report said.

“The general view across the industry is that interregional planning processes are at best, stalled, and at worst, ineffective in identifying valuable projects,” the report said.

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