Interdependency of natural gas and electricity

By Jacob Klimstra

In February I attended a very interesting workshop in Arlington, Virginia on the integration of energy systems. The National Renewable Energy Laboratory and the Pacific Northwest National Laboratory had brought together some 30 international experts in energy systems integration to exchange information and share knowledge. The participants came from universities, research institutes and the energy sector.

Global electricity demand is rapidly increasing, while policymakers aim for sustainable electricity production with minimal environmental impact. Countries such as Germany, Denmark, Spain, China and the US states of Texas, California and Iowa have installed a considerable number of wind parks and solar panels. During the Arlington workshop it became very clear that agile and flexible power generating capacity is needed to balance intermittent wind and solar output.

Cogeneration can cheaply absorb excess electrical energy when renewable output exceeds electricity demand. The prime movers of the cogeneration units can easily be stopped in such cases, while heat demand is covered by excess electrical energy. Temporary heat storage in insulated water tanks can help if heat production and demand do not fully coincide. On-site power generators can also respond very rapidly to demand variations if renewable production decreases. The units can help to stabilise the grid during contingencies and compensate for demand forecasting errors. Natural gas is known to be a clean and convenient fuel for local generators and is abundantly available worldwide, especially with today’s shale gas production.

At first glance, this would create an excellent future for cogeneration and on-site power production. However, a number of issues diminish emerging optimism. In some areas of the world, the prices of natural gas and oil are artificially linked, so gas can be three to four times more expensive than in the US. Renewable energy subsidies and very cheap coal sometimes make gas-based generation uncompetitive, and insufficiently developed gas distribution infrastructure means that gas cannot always be made available. In some cases the pipelines’ flow capacity is so small that electricity generators are disconnected during cold spells with high gas demand for heating. And gas companies do not always guarantee good gas quality anymore, so the performance of gas-using equipment suffers.

Yet the benefits of cogeneration and on-site electricity production for an integrated energy supply system are so high that policymakers should remove any barriers. The solutions are easy:

  • Open markets for natural gas, without an artificial link to oil prices, can reduce gas prices;
  • The best backup techniques for facilitating the integration of a large amount of renewables should not be pushed from the market by inadequate subsidies for renewables;
  • Pipeline systems can be extended, while local gas storage in underground caverns can be added at very low costs;
  • Gas companies can easily ensure that customers receive gas of a close to constant quality.

In my opinion, the cogeneration and on-site power sector should participate more actively in think tanks and advisory boards to ensure a rightful position for its versatile technologies.

Jacob Klimstra
Managing Editor

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