OREANDA-NEWS. December 23, 2016. As natural gas production from US shale regions began to mushroom in 2008, many electric utility executives were skeptical of the new supply source and unwilling to invest in new gas-fired generation.

Now, gas economics and environmental rules clearly favor gas over coal and nuclear fuel, leading utilities to burn more gas and to expand the US gas-fired generation fleet. This ongoing shift to rely on a single, power-plant fuel increases the vulnerability of the electric grid, according to the agency responsible for ensuring reliability of the North American power network.

The North American Electric Reliability Corporation (NERC) wants to make sure utilities, power grid operators and federal and state policymakers understand the increased risk that reliance on a single fuel presents to dependable electric service.

Because of limitations in how it is delivered, gas provides "just-in-time" fuel, meaning firm transportation and dual-fuel capability may be needed to reduce widespread reliability problems. Regulators and regional grid operators "will need to more fully understand how impacts to the natural gas transportation system can affect electric reliability," NERC said.

Continued supply growth of low-cost gas from shale regions will boost use of the fuel in nearly every US power market over the next decade, NERC said in a 10-year reliability assessment issued this month. Gas will be burned to produce nearly 70pc of the on-peak electric output in Florida, Texas and parts of California stretching south into northern Mexico in the next few years. Electric output comes from gas about 50pc of the time in Arizona, New Mexico and the New England states, NERC said.

Only the 14-state Southwest Power Pool region, which includes all or parts of Oklahoma, Nebraska, Minnesota and the Dakotas, may see a slight decline in gas-fired generation by 2021.

"Gas has different characteristics," said Thomas Coleman, NERC's director of reliability assessments, primarily the timely nature of gas delivery via pipelines and underground storage caverns. "You can't stockpile it on site."

The shift to gas for power generation in New England has already exposed a lack of adequate regional pipeline capacity and storage options. An additional 2,700MW of gas-fired generation is expected to come online by the end of 2019. "ISO New England has been faced with gas-related challenges for more than a decade," NERC said, and many issues remain.

NERC is also working to better understand the challenge facing gas-fired plants that need to operate with more flexibility as new solar and wind generators connect to the grid.

The impact of pipeline or storage problems that interrupt gas flow for electric generators is another emerging concern. The massive 2015 gas leak from the Aliso Canyon underground storage facility in California was "a big eye-opener," said Coleman. The ongoing state-ordered moratorium on gas injection at the SoCal Gas' field near Los Angeles jeopardizes the gas supply for as much as 20,000MW across southern California this winter.

Another NERC study, due out in May, will evaluate the potential for similar threats to electric supply from a disruption at large underground gas fields in New York, Michigan and along the Gulf coast.

Based on earlier long-term projections by US regional grid operators, Coleman said the power industry has consistently under-forecast the so-called "dash to gas."

In NERC's 2008 long-term outlook, a year when US gas prices reached \\$13/mmBtu, expectations were that gas-fired generation would grow by more than 60GW to roughly 390GW over the 10-year planning period, far short of the actual expansion of the gas-fired fleet to about 440GW today.

NERC's 2016 assessment shows installed gas generation climbing to 470GW by 2019, then leveling off for the remainder of the 10-year forecast.

One reason gas additions may have accelerated is that the industry underestimated how quickly coal plants would shut, NERC said. Even as environmental regulations were delayed, coal retirements accelerated as gas economics and incentives for renewable generation emerged, said Coleman.

Pressure from low gas prices is also driving the premature retirement of US nuclear plants. That trend is also a concern to NERC, along with the rapid penetration of distributed energy resources, such as rooftop solar, because such resources are not under the control of grid operators.