Return to Blog

Why natural gas supply will be crucial in preventing winter power outages

Winter is coming! As the reliance on natural gas continues to increase, strain is being placed on existing natural gas supply and infrastructure to ensure that the lights – and heat – will be kept on during the winter.

Grid operators say enhanced coordination and upgraded operational tools are key in keeping gas-fired plants online

Grid officials and market watchers tell federal officials they expect to reliably meet winter demand this coming season, though some challenges remain, the weather is unknowable and areas with limited natural gas capacity could struggle.

In California, gas shortages due to the Aliso Canyon leak will affect dozens of plants and more than 20 GW of capacity. For New England, which gets almost half its power from gas generators, the grid operator can marshal up to 10% of its capacity in the form of demand response and alternative generation. New York and adjacent markets have worked to better coordinate scheduling, and PJM will implement its enhanced capacity performance product, with stricter generator penalties.

On whole, gas prices are expected to be higher. And given weak heating demand during the last mild winter, gas consumption is expected to rise. Much of this is cyclical — lower gas prices resulted in lower production — but the market also has plentiful storage, the possibility to import liquefied natural gas, and a better-connected pipeline network, to help it cope.

The weather is generally expected to be average, which will lead to a bump in consumption after warm weather a year ago. Total gas demand could be 5 billion cubic feet per day (Bcf/d) more than last year, which will elevate prices. But the electric generation sector could actually see a 2 Bcf/d decrease in gas demand, with less fuel switching taking place due to higher prices.

Organized markets from New England to California recently presented to the Federal Energy Regulatory Commission their plans for meeting demand this summer, each taking unique steps. Combined with a strong natural gas supply base and new coordination strategies, here’s a glimpse at the challenges five of them face in keeping the lights on.

Read the rest at

Disclaimer: Although the information contained herein is from sources believed to be reliable, TFS Energy Solutions, LLC and/or any of its members, affiliates, and subsidiaries (collectively “TFS”) makes no warranty or representation that such information is correct and is not responsible for errors, omissions or misstatements of any kind. All information is provided “AS IS” and on an “AS AVAILABLE” basis and TFS disclaims all express and implied warranties related to such information and does not guarantee the accuracy, timeliness, completeness, performance or fitness for a particular purpose of any of the information. The information contained herein, including any pricing, is for informational purposes only, can be changed at any time, should be independently evaluated, and is not a binding offer to provide electricity, natural gas and related services. The parties agree that TFS’s sole function with respect to any transaction is the introduction of the parties and that each party is responsible for evaluating the merits of the transaction and credit worthiness of the other. TFS assumes no responsibility for the performance of any transaction or the financial condition of any party. TFS accepts no liability for any direct, indirect or other consequential loss arising out of any use of the information contained herein or any inaccuracy, error or omission in any of its content. This document is the property of, and is proprietary to, TFS Energy Solutions, LLC and/or any of its members, affiliates, and subsidiaries (collectively “TFS”) and is identified as “Confidential.” Those parties to whom it is distributed shall exercise the same degree of custody and care afforded their own such information. TFS makes no claims concerning the validity of the information provided herein and will not be held liable for any use of this information. The information provided herein may be displayed and printed for your internal use only and may not reproduced, retransmitted, distributed, disseminated, sold, published, broadcast or circulated to anyone without the express written consent of TFS.