New England has enough power for winter; gas a challenge

Tue Dec 4, 2012 9:55am EST

* Natgas supplies could be tight in extreme winter

* Grid may rely on oil, coal to maintain reliability

* Gas produces more than half of New England's power

Dec 4 (Reuters) - New England should have enough electricity to heat homes and businesses this winter but the region's reliance on natural gas to produce power could create operational challenges if gas supplies become tight, the regional grid operator said.

If that happens, grid operator ISO New England will rely on underused oil- and coal-fired generation to help keep the lights on, it said.

"ISO New England has raised concerns about the region's reliance on natural gas as part of our broader strategic planning initiative efforts," Vamsi Chadalavada, executive vice president and chief operating officer, said in a release.

Under temperatures of about 7 degrees Fahrenheit (minus 14 C), ISO forecast power demand would peak at about 22,355 megawatts (MW) this winter.

But if extreme winter weather of 2 degrees F occurs, the ISO said demand could reach 23,095 MW.

Last winter, demand for electricity peaked at 21,354 MW on Jan. 4, 2012. The all-time winter peak of 22,818 MW was set on Jan. 15, 2004, during a cold snap. The highest demand ever recorded in New England was 28,130 MW, reached on Aug. 2, 2006. One megawatt powers about 1,000 homes.

The six-state region has generation and demand-side resources totaling about 33,000 MW, including some 30,500 MW from generators, about 1,920 MW from demand-side resources, and about 475 MW of net imports from neighboring regions.

New England's reliance on natural gas to produce electricity has increased significantly over the past several years, in part because natural gas has become far less expensive than other fossil fuels due to record shale gas production.

HEAT OR POWER

Natural gas supplies in New England can become tight during the winter because the fuel is used both to produce electricity and to heat homes.

Companies that buy natural gas to heat homes and businesses typically have firm contracts for pipeline delivery, giving them priority and creating the possibility of reduced fuel deliveries to some interruptible natural-gas-fired generators during extreme cold weather.

Almost 45 percent of the region's generating capacity - more than 13,000 MW - is natural-gas-fired, the ISO said, noting that such power plants produce more than half of the region's power because of their lower operating costs.

Much of the rest of the power in New England comes from its five nuclear reactors, which generate more than 4,600 MW, and hydropower produced in the region or imported from Quebec.

The region has more than 6,000 MW of oil- and 2,000 MW of coal-fired generators, which make up nearly 30 percent of its generating capacity. Those units are seldom called on to provide electricity because of their higher fuel costs, the ISO said.

The oil and coal units are needed because they help maintain system reliability during times of high demand, stress or the unavailability of natural-gas-fired generation.

The ISO said it had surveyed the region's generators to make sure they had enough coal and oil for the winter.

The ISO also said it was working with federal regulators and natural gas suppliers to make sure there was enough pipeline gas for regional power plants and liquefied natural gas for some units in the Boston area.

If unexpected power plant or transmission line outages occur, the ISO has other steps it can take to maintain reliability.

Those steps include compensating certain customers for curtailing their energy use, importing emergency power from neighboring regions, and asking businesses and residents to conserve electricity voluntarily.

The biggest power companies in New England are units of National Grid Plc, Northeast Utilities, Iberdrola SA, NextEra Energy Inc, Dominion Resources Inc , Entergy Corp, Exelon Corp and GenOn Energy Inc.

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