With natural gas prices low and greater amounts of electricity from renewable energy sources coming online, power utilities and state regulators, as well as large engineering/construction companies, are increasingly looking to build new natural gas-fired “peaker” plants to assure a constant readily available supply of electricity at times of peak power demand. Utility commissions and regulators would be wise not to get caught up in the shale oil and gas boom mentality, however.
Not only does the construction of natural gas-fired power plants require huge amounts of capital — the costs of which are typically passed on to ratepayers — they are heavily polluting, and they use huge amounts of precious water resources. Moreover, developers have been proposing projects at scales that are highly questionable. Contracts typically require independent power producers to be paid regardless of how much electricity the peaker plants produce. Again, utilities recoup their costs, and earn a return, at ratepayers’ expense.
Advances in hydraulic fracturing (“fracking”) and horizontal drilling have opened up vast new sources of natural gas and oil, prompting a drilling frenzy in areas outside Texas where large carbon-rich shale deposits are found, such as the Marcellus, Utica and Bakken shales. Production data show that shale oil and gas wells decline very rapidly, often much more rapidly than oil and gas companies project to regulators and publicly.
Moreover, shale oil and gas drilling and production have been expanding a lot faster than distribution infrastructure and refining capacity, prompting producers to ship shale oil and gas by rail and truck, as well as flare off natural gas from wells where extracting petroleum from shale is the main objective. State and federal regulatory oversight and enforcement tends to be lax and ineffective, certainly when it comes to preventing accidents that can have long, lasting and profound effects on ecosystems, natural resources and the provision of fundamental public services obtained from them.
Meanwhile, the variability of producing electricity from the sun and winds, along with high up-front costs, has people spooked. Fanning the fear, fossil fuel industry participants and advocates continue to raise the specter of rising rates, power shortages and outages they assert will result from a proactive, rapid transition to locally appropriate mixes of renewable energy resources.
Certainly, profound changes in power market pricing as well as regulatory regimes are required in order for the shift away from fossil fuels to succeed. It’s a process that will take place gradually and require many years. Nonetheless, given the pace of technological innovation, the transition to renewable energy can be accomplished in a generation.
The construction and early performance of the Sentinel natural gas-fired “peaker” power plant in Desert Springs, California highlights the range of sensitive issues involved when utility regulators approve construction of utility-scale, natural gas-fired peaker plants.
At a massive 800 megawatts and construction cost of $920 million, Sentinel came online over a year ago in spite of local concerns regarding its potential to be a public health hazard. Permitted to operate for just 30 percent of its potential operating capacity, anticipated small particle emissions were pegged at over 110,000 pounds and carbon emissions at nearly one million tons, according to a report from The Desert News.
In operation for over a year now, Sentinel has been called on to produce electricity just 11 percent of its operational capacity. As a result, small particle and carbon emissions have been far less than expected — just one-third of projections. Occasional spikes in these pollution measures far above the maximum deemed healthy by the EPA are keeping local environmental, public health and interest groups vigilant, however.
Though it’s running and generating electricity far short of the maximum set out in contract terms with Southern California Edison (SCE), project owner/operators Competitive Power Ventures (CPV) and GE Energy get paid for operating Sentinel 30 percent of the time. As Sentinel power plant assistant manager Mark McDaniels told The Desert News, “It doesn’t matter, 1 percent or 30 percent — we get paid the same. We’re just here when Edison needs us to operate, to be 100 percent available.”
To sum up: California utility regulators approved, and CPV and GE Energy proposed and built, a massive public health hazard that emits huge amounts of pollution and makes use of huge quantities of water in a high desert community at a cost of nearly $1 billion to be recouped from SCE customers — all to meet peak electricity demand. There has got to be a better way — one that’s affordable, as well as clean, sustainable and technologically doable. And there is.
Installation of smart, distributed energy storage capacity and responsive demand response (DR) systems along with distributed solar, wind and other locally appropriate renewable energy generation capacity, such as energy-from-waste (EfW) and biogas systems, offers a practical, more flexible and increasingly affordable — as well as cleaner, healthier and more sustainable — alternative to building natural gas-fired peaker power plants.
In addition to these very real and substantial advantages and benefits, prioritizing deployment of intelligent energy storage capacity along with distributed renewable energy and smart grid infrastructure would also conserve water resources — a point that shouldn’t be lost, particularly in arid and desert regions and those suffering from multi-year droughts.