PUBLIC LECTURE: Contracts for Gas Prioritization to Power Plants and Grid Reliability during Winter Emergencies

THIS LECTURE WILL BE HOSTED AS A HYBRID EVENT

The Melbourne Energy Institute invites you to a public lecture by Associate Professor Chiara Lo Prete from Pennsylvania State University, who will speak on 'Contracts for Gas Prioritization to Power Plants and Grid Reliability during Winter Emergencies'. 

Over the past decade, cold weather events such as the 2014 Polar Vortex and Winter Storm Uri caused widespread power outages, driven in part by fuel supply interruptions at gas-fired power plants. These interruptions are especially acute in the Northeastern U.S., where pipeline constraints during peak heating demand periods limit gas deliveries to power plants. During such periods, residential and commercial customers are prioritized over other customers holding firm gas transportation contracts. Additionally, federal regulations mandate non-discriminatory access to pipeline capacity among firm contract holders, placing power plants and industrial customers at the same priority level. This paper explores an alternative strategy to improve gas allocation efficiency within existing infrastructure. Specifically, we examine advance exchange agreements in which industrial customers voluntarily release firm gas transportation capacity to power plants in exchange for monetary compensation during winter emergencies. To evaluate this option, we develop an optimization model that accounts for competing gas uses across sectors, transportation contract types, and emergency curtailment priorities. The model is applied to a realistic gas-electric system that represents the Northeastern U.S. during the 2014 Polar Vortex, leveraging a novel dataset on gas deliveries by sector and contract type. Results indicate that advance exchange agreements between end users reduce system costs and unserved electric energy, but do not fully resolve reliability challenges because only a small fraction of gas can be reallocated from industrial customers with fuel-switching capabilities to nearby power plants.

SPEAKER:

Associate Professor Chiara Lo Prete

Associate Professor of Energy Economics

Associate Head for Diversity, Equity and Inclusion 

Pennsylvania State University

Chiara Lo Prete is Associate Professor of Energy Economics in the John and Willie Leone Family Department of Energy and Mineral Engineering at Penn State University. Her research centers on the modeling of energy markets and systems, with a focus on the areas of competition and design of electricity markets, energy system interdependencies, and energy geopolitics. Recent work has used tools from economics, mathematics and engineering to study natural gas market design to enhance grid reliability during winter emergencies, electricity market structures for wind energy integration and resource adequacy, the weaponization of electricity trade, and emission leakage in the Western U.S. Before joining Penn State, Lo Prete was a Ziff Environmental Fellow at Harvard University from 2012 to 2014. She earned a B.A. in Economics (summa cum laude) from LUISS University, a M.A. in Energy Economics from the Scuola Mattei, and a M.S. and Ph.D. in Environmental Engineering from The Johns Hopkins University.

MODERATOR:

Professor Pierluigi Mancarella

Chair Professor of Electrical Power Systems, University of Melbourne

Pierluigi Mancarella obtained his PhD degree in Power Systems from the Politecnico di Torino, Italy, did his post-doc at Imperial College London, UK, and has held visiting research positions at Sintef/NTNU in Norway and NREL in Colorado, as well as visiting professorships at Ecole Centrale de Lille in France, the Universidad de Chile, and Tsinghua University in China.

Pierluigi has been involved in/led, in the last 15 years, some 50 research projects and consultancy and professional activities in the UK, Australia, and internationally, in the area of grid integration of renewables and distributed energy resources, techno-economic modelling of low-carbon power systems, business cases for smart grid technologies, reliability and resilience assessment of future networks, multi-energy systems and sector coupling, and energy infrastructure investment under uncertainty. Pierluigi is author of several books and book chapters, and of over 200 research papers. He is an Editor of the IEEE Transactions on Power Systems, IEEE Transactions on Smart Grid, IEEE Systems Journal, and the brand-new Oxford Open Energy journal. Pierluigi is also an IEEE Power and Energy Society Distinguished Lecturer, the first Chair of the Energy Working Group of the IEEE European Public Policy Initiative, and the Convenor of the Cigre Working Group C6/C2.34 "Flexibility provision from DER". He led the power system security assessment studies commissioned by the "Finkel Review" panel and actively collaborates as a researcher and consultant for industry and government bodies, including AEMO, AEMC and AER.