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Enhancing electric reliability with storage-field generators

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  • Savitski, David W.
  • Nuryyev, Guych

Abstract

The U.S. natural gas industry has experienced two significant changes recently. First, consumption has increased since 1995, as electric utilities substitute gas for coal. Since electricity use is summer peaking, this new consumption smooths demand over the year. Second, the shale gas revolution has increased production and storage since 2005. This decreased prices, encouraging the coal-to-gas substitution. Frictions between the gas and electricity industries have, however, decreased electric reliability. Just as locating generators at coal mines decreases the cost of transporting coal, locating gas generators at storage sites increases reliability by decreasing these frictions. But because the increased reliability is external, and thus ignored by generators and infrastructure providers, FERC must provide incentives to coordinate investment in generation and storage to realize these gains.

Suggested Citation

  • Savitski, David W. & Nuryyev, Guych, 2018. "Enhancing electric reliability with storage-field generators," Energy Policy, Elsevier, vol. 121(C), pages 611-620.
    • Handle: RePEc:eee:enepol:v:121:y:2018:i:c:p:611-620
    DOI: 10.1016/j.enpol.2018.03.040
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    References listed on IDEAS

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    More about this item

    Keywords

    L43; L51; L95; Electric Utilities; Natural Gas Storage; Reliability;
    All these keywords.

    JEL classification:

    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities

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