Xing proposes a hybrid model in which pipeline constraints are added on top of the existing reserve adequacy assessment (RAA) unit commitment model, whose function is to minimize offer price-based unit commitment cost and energy production cost. "You can combine market offer-based unit commitment and dispatch with physical fuel and pipeline topology models to expand market clearing tools to cover gas pipeline contingencies and constraints."
Better integration of gas and electricity markets could save billions. PJM, for example, estimates that natural gas scheduling issues were responsible for most of the extra $597 million charges incurred in January 2014 alone, with the Department of Energy
noting that these so-called uplift payments are closely related to price divergences between "day-ahead" and "real-time" markets. On a more modest scale, Wang's proposal would allow ISO-NE to simulate different scenarios of pipeline contingencies and extreme gas consumption cases and their impact on market operations and reliability. It would also identify which data from pipeline companies ISO-NE should acquire to improve its own system reliability and which parts of the pipeline system in the ISO-NE region need expansion.
In the longer term, Xing Wang hopes his work will help to address these two challenges: "Energy systems are becoming increasingly interconnected, but so too are the objectives we are setting them. We have to devise better ways to collect, analyze, understand, and share data among different systems and stakeholders if we want to optimize reliability, price, environmental and other objectives all at the same time."
GE believes that shale gas can be extracted in an environmentally responsible manner, and supports the increased use of natural gas for electricity generation. Other major stakeholders agree, and while a few years ago shale gas was classed as “unconventional,” it now provides the largest share of US natural gas production, while electricity from natural gas surpassed coal in 2015. However, increased reliance on shale gas is raising reliability concerns for electricity grids, particularly during extreme cold weather spells, when demand on gas and electricity peaks with increased risk of natural gas supplies being interrupted.
The latest North American Electric Reliability Corporation (NERC) Long-term Reliability Assessment states that as more gas-fired capacity is added, demand swings from generators could lead to pressure drops in pipelines that subsequently could jeopardize service. In addition, a switch away from coal to gas reduces the margin of error in the electricity generation system because power plants will be relying on just-in-time supplies of gas rather than having up to a month’s supply of coal readily available.