Gas Week

EWN Publishing

Prior to SEAGas, MAPS fully contracted, with no spare capacity at peak times: lack of pipeline capacity forces peaking units onto liquid fuels, says NEMMCO report

Posted by gasweek on 18 September, 2007

Utilising slightly higher priced gas prices in neighbouring zones may well be preferable to seeking low gas prices only to find the station having to run on liquid fuels due to pipeline capacity constraints. Prior to the SEAGas development, MAPS was fully contracted, with virtually no spare capacity available at peak times. This forced peaking units on to liquid fuels more often than not. Peaking stations generally did not reserve firm pipeline capacity, but instead relied on interruptible services with resort to liquid fuels if adequate pipeline capacity was not available when needed, noted ‘Fuel resource, new entry and generation costs in the NEM’, a report to NEMMCO by ACIL Tasman (27/3/2007).

Availability factors: The availability of interruptible capacity on a pipeline was determined by a number of factors including:

  • Capacity of the pipeline in its current configuration – all else being equal, the larger the capacity the more potential for interruptible services being available;
  • Reserved capacity through firm forward-haul services – lower firm reservations implied under-utilization of the pipeline, and hence greater interruptible capacity (with lower likelihood of interruption);
  • Underlying load factor – a pipeline’s firm forward-haul shippers and the correlation of their usage; for example, the Victorian PTS had a poor load factor with peak withdrawals in winter – peaking stations had access to significant quantities of capacity during summer periods;
  • Linepack – swing volumes may be accessible through linepack or park-and-loan services. It was not possible to estimate accurately how much interruptible capacity would be available on a pipeline in the short-term, let alone into the future.

Increases in capacity: A particular pipeline which had ample capacity available for interruptible loads may find this capacity to be unavailable if new firm shippers began to utilise the line. Conversely, a pipeline which was fully booked with little interruptible volume available may find capacity became available if a firm shipper was to cease taking gas or to offer capacity entitlements during peak periods when those entitlements had high value. Recent transmission developments in NSW (EGP) and SA (SEAGas) resulted in a significant increase in pipeline capacity available for users in these regions. .

Spreading developments: Since the commissioning of SEAGas, these same stations have not been required to use liquid fuels. The more gas-fired power stations relied on a pipeline, the greater the chance that interruptible volumes would be unavailable during peak price periods due to the high correlation of withdrawals. For this reason it may be prudent to spread OCGT developments amongst neighbouring zones and avoid high concentrations in any one particular zone or reliance on any one particular pipeline.

Reference: ‘Fuel resource, new entry and generation costs in the NEM’ Report 2 – Data and documentation. Draft Prepared for NEMMCO, ACIL Tasman – Economics Policy Strategy, 27 March 2007.

Erisk Net, 29/7/2007


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