Coordination of gas and electricity transmission investment decisions

Abstract

With growing penetration of gas-fired generation in many systems, the economics and planning of natural gas and electric transmission networks are increasingly intertwined. However, in the United States these two sectors have investment mechanisms which differ greatly. This may impede coordination of expansion and investment, especially when intermediate power contract markets are weak. The New England region offers a case study of a gas transmission-constrained region where the decentralized, private, contract-based decision-making of the U.S. natural gas pipeline sector has not supported new gas capacity needed to fuel gas-fired generation, even with rapidly growing renewable energy production. New policy mechanisms may be needed to enable the interstate pipeline sector to better match the needs of highly variable electric generation.