NERC: Power supplies expected to be more than adequate this winter

In its 2012 winter reliability assessment released Nov. 29, NERC said resources should be sufficient to meet peak electricity demand during the winter of 2012-2013 but warned that greater dependency on natural gas for electricity generation could prove problematic in cases of extremely cold weather, particularly in the northeastern United States.

In its assessment, NERC said the three-month winter outlook from the National Oceanic and Atmospheric Administration (NOAA) “lacks a strong signal for extreme cold” weather, and that average or above-average temperatures are expected for all areas of the United States between Dec. 1 and Feb. 28, 2013, with the sole exception of Florida. The report further noted that planning margins were expected to be sufficient to accommodate normal winter weather.

On a NERC-wide perspective, projected anticipated resources have increased by 14.9 GW since the 2011/2012 winter season, according to the report, while peak demand is forecast to decline by 5.9 GW compared to last year as economic conditions impact electricity demand.

For its winter assessment, NERC generally focused on the winter-peaking areas and concluded that sufficient generation is expected for those areas.

The winter assessment also noted that natural gas inventories at the end of October 2012 were approximately 3.9 trillion cubic feet, approximately 136 billion cubic feet above levels recorded a year earlier. The assessment also said no other fuel delivery issues were noted, in part “due to large on-site stocks of coal supplies.”

However, the report warned that the growth in natural gas demand within the electric sector has important implications for electric reliability.

“For a variety of reasons, including the adoption of highly efficient combined cycle technology by the electric power industry and the emergence of shale gas … the dependence on natural gas by the electric power sector has increased significantly,” NERC said in its report.

While not anticipated, the report said extreme winter weather in the Northeast could lead to increased gas-fired generator outages, and that the situation could be particularly acute in the Northeast Power Coordinating Council’s (NPCC) New England region, where gas-fired capacity accounts for approximately 45% of the total capacity outlook. In addition, the area is further burdened by its lack of underground gas storage options due to its geology, by the fact that the majority of the region’s generators are not dual-fuel capable, and by constrained gas pipeline capacity into the area, NERC said.

NERC cautioned that increased dependency on natural gas for generating capacity has increased the need for all gas customers, as well as policy makers, to focus more sharply on the interaction between the electric and gas industries.

On a positive note, the report cited improved winterization in the Southwest as a factor contributing to the region’s improved ability to withstand extremely cold winter temperatures.

As a result of a cold snap that struck the area in February 2011, many operators in the ERCOT, WECC and SPP regions have implemented modifications, enhancements, and new procedures for 2012/2013 winter season, NERC said in the report.

Those steps included weatherizing generation units, testing units that claimed dual-fuel capability, inspecting heaters and heat-tracing equipment, and testing black-start units.

Other areas that were not affected by the cold snap, including the Florida Reliability Coordinating Council (FRCC) and the SERC Reliability Corporation (SERC), also incorporated the lessons learned and made modifications to their policies and procedures to accommodate cold-weather events, NERC said in its report.

The west experienced a relatively warm and dry summer, resulting in drawdowns in area reservoirs throughout the Colorado River basin, which the report said is in essentially the 12th year of a persistent drought.

As a result, “It is expected that the reduced river flows will result in increased thermal-based energy generation but will not significantly affect the ability to meet peak demand,” NERC said.