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Open Access Publications from the University of California

The Value of Natural Gas Storage and the Impact of Renewable Generation on California’s Natural Gas Infrastructure


The California energy crisis of 2001 showed the past inadequacy of the natural gas infrastructure in California to cope with significant weather-related increases in gas demand. Since that time, California has invested significantly in expanding this infrastructure, both by increasing capacity along current pipelines and adding new natural gas pipelines into and within the state, as well as adding additional natural gas storage capacity within the state. The first two phases of this project attempted to better understand the nature of natural gas storage infrastructure within California. The first section in this report is a conceptual analysis of natural gas storage within the state, with the goal of understanding fully the value of storage to both the private and public sectors. The second section details the modeling done to simulate California’s natural gas infrastructure for better understanding the capability of current infrastructure to withstand adverse weather conditions and for quantifying the resulting impacts on storage within the state. The third section of this report examines the future adequacy of California’s natural gas infrastructure as renewable energy becomes an increasingly larger portion of the State’s generating mix. OnSeptember 15, 2009, Governor Arnold Schwarzenegger signed Executive Order S-21-09, directing the California Air Resources Board (CARB) to adopt regulations increasing California's RPS to 33 percent by 2020. Given the inherent variability of some types of renewable generation, such an increasing in renewable generation could potentially stress California’s natural gas infrastructure, which provides fuel to the majority of the State’s power plants. Using the same modeling framework as in the storage analysis, the third section examines the reliability of California’s gas infrastructure under a 33 percent RPS scenario.

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