May 17, 2018
(Reuters) – Most U.S. regions are prepared to meet power and natural gas demand this summer, but shortages are possible in Southern California due to low hydropower and gas supplies and Texas following the retirement of several coal plants, federal energy regulators said in a report on Thursday.
In Southern California, staff at the U.S. Federal Energy Regulatory Commission (FERC) said lower-than-average hydro generation may create challenges as natural gas-fired generation – the replacement for hydro production shortfalls in past years – may be limited due to reduced gas storage capacity and local pipeline outages in the region.
Nationwide, the staff said North American reliability coordinators forecast demand for electricity from the grid would be about the same as last summer due to increased use of demand response programs to reduce usage and distributed energy resources like home solar panels.
If the forecasts for warmer than normal weather this summer are correct, the report said gas burned to produce electricity could top 2016’s record high due to the addition of over 16,000 megawatts of new gas-fired generation and low gas prices, making gas a cheaper fuel than coal in many regions.
One megawatt can power about 1,000 U.S. homes.
The report said energy firms were expected to add over 25,000 MW of mostly gas and renewable generation through the end of the summer.
That new capacity will replace much of the roughly 14,000 MW of generation that has retired since May 2017, including about 10,800 MW of coal-fired capacity.
But the new plants are not necessarily located where the old plants retired.
The shutdown over the past six months of the 1,187-MW Big Brown, 1,980-MW Monticello and 1,282-MW Sandow coal plants in Texas helped cut its reserve margin to 10.92 percent, which is below the grid’s 13.75 percent target.
The Texas grid operator, the Electric Reliability Council of Texas (ERCOT), said it expects to have sufficient operational tools to manage tight reserves and maintain system reliability.
Those tools include using a previously mothballed power plant, imports from other regions and consumer conservation and demand response efforts.
In California, the grid operator said it also expects to use demand response programs and consumer conservation to mitigate tight supply conditions this summer.
Gas supplies in Southern California are expected to remain tight this summer due to limitations on Aliso Canyon, the biggest gas storage field in the state, and gas pipeline outages and reductions.
Reporting by Scott DiSavino; Editing by Marguerita Choy