New England Burns Jet Fuel To Keep Lights On

First time accepted submitter inqrorken writes "During the recent cold snap, New England utilities turned to an unconventional fuel: jet fuel. Due to high demand for heating, natural gas supplies dropped and prices skyrocketed to $140/mmBtu and prompting the Mid-Atlantic RTO to call on demand response in the region. With 50% of installed generation capacity natural-gas fired, one utility took the step of running its jet fuel-based turbines for a record 15 hours."

Comments

Invisible Hand

[Mateorabi]

So this wasn't an equipment failure requiring a backup, but just market price fluctuation: The cost of natural gas per Watt generated went above the cost per Watt of the fuel for the backup generators, due to the high demand for natural gas as demand rose as temperatures fell. Sounds like Econ 101.

1. Why didn't the wholesale electric prices rise in tandem with the gas price to keep generation economical? Capped by fixed residential rates?

2. Why didn't the generators use the derivatives market to hedge against spikes in gas prices so they'd be able to keep buying as demand/price rose?

Re:Invisible Hand

[rmdingler]

FTA: Natural gas is classified as a 'just in time' fuel delivery system.

This anomaly was preceded by huge increases in the underlying natural gas spot market price, in perfect timing with the additional cold bestowed on the region by Polar Vortex storms.

Surely, speculators didn't drive up the price of a commodity right before the storm hit?

Re:Invisible Hand

[NapalmV]

This ain't any "Econ 101" "supply & demand" thing. There's plenty of natural gas around to the extent that it just get wasted:

http://www.theglobeandmail.com/report-on-business/breakthrough/gas-flaring-on-the-rise-despite-environmental-and-health-concerns/article14088342/

The "invisible hand" you're mentioning is just the natural resources trading firms that saw an opportunity to increase their markup for the supplementary quantities. If you want to bring it to "econ 101" then it would be a failure of the markets due to insufficient competition in the trading sector. Anyway if anyone here still believes in "econ 101" fairy tales I would recommend reading Steve Keen's "Debunking Economics".

Re:Invisible Hand

[Animats]

Ah, the "markets will fix everything" (but didn't read the linked article) types.

Wholesale electric prices did rise, to about $950/MWH, for about half an hour around 5 AM EST this morning. That didn't last long. It's now around $150/MWH. The price goes up and down by a factor of 3 or so in a normal 24 hour cycle.

There's hedging going on in power, natural gas, and weather. But it doesn't affect the amount of generating capacity online on an hour by hour basis.

Read PJM 101 to understand how this works. Electric power in the PJM region is normally driven entirely by markets. However, PJM grid control in Valley Forge, PA can order "non-market actions" to keep power on, and generating companies (which are not all utilities) are obligated by their contracts with PJM to obey those instructions or pay huge penalties. PJM doesn't do this often. Yesterday and the day before, though, were bad days. Both days, there were Max Emergency Generation alerts . The longest was from 19:19 EST on Thursday to 08:45 Friday. That's because some generating capacity was down, and peaking plants had to be used to make up capacity. That's part of what peaking plants are for.

Wind power didn't help. Wind power was at a low when power was most needed. Even with wind farms spread over many states, wind power in the PJM area goes up and down over a 4x range.

(Sometimes power is really cheap. The price can even go negative. Load varies over about a 3x range during a normal day, and around 2-5 AM, it's at minimum. All the plants that burn fuel shut down first. Much of PJM's power comes from Ontario Hydro, and when they have too much water in their reservoirs, they have to let some out through their generators. So they continue to produce power even if the price they're being paid briefly goes below 0. Adjusting the output of nuclear plants is slow, and they'll also sometimes generate even if it costs them. The wind farms usually prefer to shut down rather than pay, and so, late at night, sometimes the giant wind turbines feather their props and slow to a stop.)

Importance in diversity of energy sources

[acidradio]

In recent years there has been a movement to quickly shutter "old" power plants that run on fuel sources like coal, oil and other less environmentally friendly fuels and totally replace them with natural gas plants. Natural gas has come way down in price also which helps force that along. But what happens when supplies of natural gas either radically go up in price or become limited due to some other distribution problem? It's a good thing that they had these peaking units ready at the standby along with a sufficient amount of fuel.

Where I live (Minneapolis) a number of the local coal power plants have been completely converted to natural gas. There is still one large coal-fired plant though north of town (Xcel Energy's Sherco) that is not viable to convert to natural gas at this point and still runs on coal. Sherco was the quintessential baseload coal fired power plant cranking out 2400MW through three units. It has now be relegated to being a peaking unit for the most part, turned up and down as necessary. Recently one of the three turbines violently shattered, had to be rebuilt and was offline for many months. Sherco is the kind of power plant that was meant to be fired up and ran continually for a couple of years without downtime and without significant variation in the throttling/output. I can only speculate but I don't think that treating it like a peaking plant and constantly varying the output is good for it... and a number of other similar power plants around the country.

Re:Jet Fuel?

[Anonymous Coward]

Except that they add a few additives to it when its actually 'Jet Fuel'. Eg: they don't recommend burning 'Jet Fuel' in a kerosene heater because the additives make it stink (a bit more). When you run straight kerosene in Jet Aircraft, it doesn't burn quite as nicely (I've seen Russian MiG 29's burning straight kerosene, and they smoke a bit when spooling up and taxiing on the runway). I also assume they weren't burning JP4 (but I also assume that the locals don't have SR-71 Blackbirds laying about). I'm always surprised by people who yap that 'surely jet engines must be running something like super-ultra #1 aviation gasoline', but I then just assume that they have no idea how jet engines work. I *had* to learn when I got an AD in Electronics Engineering, and along with it took one class in Avionics (just the cockpit and E&E pit of a Lockheed F104 Starfighter). They insisted we had a good general knowledge of engines, flight controls etc. along with knowing the intricacies of the radar, direction finding, pitot static tube sensors, etc.

SR-71 = JP8

[Anonymous Coward]

SR-71 = JP8

Re:SR-71 = JP8

[stjobe]

SR-71 = JP8

No, the Pratt & Whitney J58 engines of the SR-71 ran on JP7, a fuel specially made for those engines and that aircraft.

iced...

[harvey the nerd]

Sounds like an excuse to bust out the extraordinarily high price cap. First shut down the coal plants, then free up prices. Newly minted fortunes. Thanks, Obama the careless.

Re: Jet Fuel?

[Turboglh]

I overhaul the Pratt & Whitney units used by a lot of utilities, and their use in high demand situations isn't uncommon, that's why they're installed.

Also, the choice of fuel on older units is predominately liquid fuel (jet a), with a mix of dual fuel (usually started on liquid and switched to gas for running) and straight gas.

So, unless you have a dual fuel setup on your units, you're stuck running whatever fuel you always use and you have no choice in switching based on the fluctuations in fuel costs.