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t c s t u u s b e e i S B n r i T t s s i u b d s C&I Case Studies in Beneficial Electrification: Natural Gas Pipeline Compressor Stations | 2

This case study focuses on electric cooperatives in oil-and-gas country that have started promoting the adoption of electric and dual-drive (gas-electric) compressors for natural gas pipeline compressor stations. New electric or dual-fuel compressor technology allows operators to save on operating and maintenance costs, reduce site emissions, and provide valuable grid services. Innovative business models allow the equipment to be installed at or below the capital cost of conventional gas compressors, providing rapid return on investment.

MEMBER PROFILE United Cooperative Services Founded in 1938, United Cooperative Services (UCS) now supplies electricity to over 84,000 meters and 58,000 members in the areas to the south and west of the Fort Worth metro area. UCS is one of Texas’ 67 electric cooperatives and purchases wholesale power from Brazos Electric Cooperative, a generation and transmission cooperative serving members in north and central Texas. UCS and Brazos also reside within the Electric Reliability Council of Texas (ERCOT) and are able to participate in its various unique power markets.

UCS’s territory also overlaps with one of the na- Most compressor stations consume a small part tion’s most productive gas fields, including the of the gas in the pipeline to power gas engine- Barnett Shale formation, a 5,000 square mile drive compressors. Like any combustion engine, region that has seen a boom in development natural gas engines produce exhaust contain- over the past decade through hydraulic fractur- ing a variety of pollutants, and operators need ing. The Barnett Shale region currently is esti- to be mindful of local air quality standards, mated to produce over 3 billion cubic feet of especially in heavily developed gas fields. natural gas per day and contains significant amount of pipeline infrastructure to distribute Converting to electric compressors can reduce product to facilities across the country. fuel and maintenance costs and eliminate site emissions, providing they can be located near NATURAL GAS PIPELINES: AN OPPORTUNITY a reliable source of power. Electric compressors FOR ELECTRIFICATION also provide a large, highly stable load for A network of over 300,000 miles of transmis- electric cooperatives and should be a welcome sion pipelines carry natural gas from the well- addition to any electric utility’s load profile. head to regional marketplaces (see Figure 1), The vast majority of pipeline compressors in where fuel is eventually distributed to homes the country today (over 90 percent) are fueled and businesses — but, the fuel will not simply by natural gas, so there is ample opportunity flow on its own. Transmitting gas through to convert operators to electricity. pipelines requires an accompanying network of compressors to keep gas flowing down the line. Dual-drive compressor technology — “hybrid” Compressors are large, expensive, mission-crit- compressor stations that can seamlessly switch ical industrial equipment. Pipeline operators between natural gas and electricity — allow invest millions of dollars to build individual com- pipeline operators to electrify compressor sta- pressor stations, and pipelines require many tions with the confidence that they can always such stations spaced every 50 to 100 miles. be using the economically optimal energy C&I Case Studies in Beneficial Electrification: Natural Gas Pipeline Compressor Stations | 3

FIGURE 1: A significant portion of the nation’s natural gas transmission pipelines and associated compressor stations fall within the boundaries of the co-op nation, presenting beneficial electrification opportunities for cooperatives. Source: NRECA.

source. These stations also provide coopera- ing or grid conditions warrant. For UCS, dual- tives in oil and gas country with large, stable drive compression has brought stable revenue loads and opportunities for load flexibility un- streams, as well as flexibility in maintaining der critical situations. reliable electric services.

UCS, located to the south and west of the Dal- NEW TECHNOLOGIES ENABLING las-Fort Worth metro area, experienced massive ELECTRIFICATION AND LOAD FLEXIBILITY load growth from 2006 through 2010, due to Most gas pipeline compressors today (over 90 the development of the Barnett Shale forma- percent) burn natural gas in a large, stationary tion by the oil and gas industry. Over 200 MW engine coupled to a turbine to boost pressure of compressor load alone was added to the in the pipeline. Compressors can vary in size system during this time. Although Barnett Shale from 1,500 to 5,000 horsepower depending production today is down about 40 percent on the capacity needs of the pipeline and the from its peak in 2012, UCS still maintains signif- station’s location. icant compressor loads of over 70 MW across 25 different accounts, with new compressor Electric compressors work on the same principle, stations being planned and installed even only using an electric motor instead of a gas today by pipeline developers and owners. engine. However, gas compression has tradi- tionally been chosen over electric compression United has worked alongside Dual Drive Tech- for several reasons. First, compression stations nologies on the implementation of dual-drive generally need to be located at specific points compressor stations, which utilize electricity along a pipeline, and this may not always over- when economical, but switch to gas when pric- lap with electric infrastructure, especially

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in rural areas. Second, electric prices may not ity and the possibility to curtail megawatts of always be competitive with gas, especially load, a single station represents a sizeable grid when factoring in demand charges applied to management asset, rivaling the capacity of larger customers. Finally, pipeline operators diesel gensets and on par with many of today’s Dual-drive have traditionally preferred gas, because it is grid-scale battery projects. Through innovative compressor already available in the pipeline and reduces shared savings models, this flexibility allows technology has the possibility of service outages. Despite these pipeline operators to potentially lower upfront helped to boost obstacles, a number of pipeline operators still capital costs by allowing DD to manage the adoption of electric utilize electric compression in certain locations station’s operation for greatest cost efficiency. compression. where infrastructure is already available and prices are competitive. THE CASE FOR PIPELINE OPERATORS Electrified gas compressor stations can gener- In the past decade, patented dual-drive com- ate benefits for pipeline operators in several pressor technology, a form of hybrid electric- ways. Electric motors are generally more reli- gas compressor has helped to boost adoption able and require less maintenance than natural of electric compression, particularly in Texas. gas-powered engines. This translates into cost They incorporate a natural gas engine and an savings over the motor’s life and longer service electric motor, coupled through clutches, to intervals. Dual-drive compressors benefit from Electric motors power a compressor (Figure 2). Automated sys- lower Operations and Maintenance (O&M) are generally more tems can switch fuel sources between natural costs as well, since they may only run a small reliable and require gas and electric based on a schedule or rules fraction of the time on gas. For larger compres- less maintenance that the operator specifies (manual switching is sor stations, this can translate into millions of than natural gas- also possible). Dallas-based Dual Drive Tech- dollars in O&M savings over the useful life of powered engines. nologies (DD) is currently the sole provider of the equipment. dual-drive compressor technology in the U.S., holding a patent on the technology. In crowded gas fields and in areas that have difficulty reaching criteria pollutant attainment A typical compressor station may draw 10 MW levels set by state and federal regulators, elec- or more, enough power to cool over a thousand tric compressor stations have a significantly homes on a hot summer day. With fuel flexibil- lower emissions profile than gas engines, par- ticularly for NOx and methane. This can help ease the air permitting process for new stations.

There may also be additional operational cost savings and potential revenue streams from electrification, provided the operators can work with their local distribution co-op and G&T to avoid peak demand charges and participate in available wholesale market programs. With all- electric compressor stations, this may involve curtailing product throughput during hours or peak use, which may not be palatable to the op- FIGURE 2: Dual-drive compressors can be powered either by electricity through a motor (blue) or by natural gas through a gas turbine or engine erator if they need to maintain flow and pressure (red). Source: SSS Clutch. at the time. However, dual-drive compressor C&I Case Studies in Beneficial Electrification: Natural Gas Pipeline Compressor Stations | 5

stations can simply shift to gas compression new projects will soon bring another 40 MW whenever it makes economic sense and with- online. Large accounts such as these can be out any noticeable reduction in compression. crucial to maintaining stable revenue, especially Figure 3 illustrates a curtailment event at the at a time when electric sales are otherwise in Godley Gas Plant in Godley, TX, one of the slow decline. “Having electric and dual-drive compression facilities in UCS service territory. based compression on our system has been a Large accounts from During the afternoon of June 23, 2017, DD great benefit to all of the members of our coop- electric compressor shifted compression predominantly to its natural erative in improving the load factor of our sys- stations can help gas unit, shedding about 5.5 MW of load and tem, and as a result, driving down our average co-ops improve the avoiding the ERCOT peak. June 23 was also wholesale power supply costs that we pass load factor of the one of the four ERCOT critical peak (4CP) days along to our members,” says Cameron Small- system and drive used to establish larger customers’ annual wood, CEO and General Manager of UCS. down wholesale demand charge. By avoiding operation of the power supply electric motor during this peak, the Godley Dual-drive compressor stations provide added costs, and maintain plant reduced demand charges by approximately benefit through fuel flexibility, allowing co-ops stable revenue. 40 percent, which is significant, especially (distribution and G&T alike) to free up megawatts when applied across all compressor stations. of capacity during hot weather or other critical situations. In the case of UCS, this load flexibil- THE CASE FOR COOPERATIVES ity proved to be crucial during critical peak con- Electric compressor stations provide co-ops ditions. During February 2011, several genera- with large and stable electrical loads with high tors in ERCOT had failed all while temperatures load factor, all of which is good for revenue. across much of the region remained below Even though the Barnett Shale formation devel- freezing for several days. This resulted in system- opment activity is past its peak, UCS still enjoys wide capacity constraints and calls from ERCOT a relatively stable 70 MW of load across 25 dif- for rolling load shed. To mitigate UCS’ exposure ferent compression-related accounts, and three and fulfill calls for curtailment, the co-op was

FIGURE 3: By switching to gas during ERCOT’s peak window, the Godley Gas Plant released 5.5 MW of capacity to the grid and helped dramatically lower demand charges for the following year. C&I Case Studies in Beneficial Electrification: Natural Gas Pipeline Compressor Stations | 6

simply able to call on several dual-drive com- Methane is a greenhouse gas roughly 30 to 50 pressor operators to switch to gas operation. times more potent than CO2.2 No matter where “We were able to contact Dual Drive Technolo- a compressor electrification project is located, gies and request they temporarily curtail their it will eliminate over 99 percent of the associ- electric compression load by moving it to natu- ated methane emissions. As noted above, ral gas via the dual-drive compressors; they dual-drive savings will vary depending on were able to quickly do this which effectively the runtime of the gas engine. reduced the rolling outage impact to our mem- Electrifying bership,” recalls Smallwood. “This was a great MAKING IT HAPPEN gas compressors benefit to our membership during that difficult Fortunately for cooperatives, if conditions are benefits the time that would not have been available had it ripe for compressor electrification, co-op staff environment through not been for the dual-drive compressors.” may not need to make a very hard sell to oper- lower emissions. ators. The question is: How does a co-op know THE CASE FOR EMISSIONS REDUCTION if their service territory is a good match for this Beneficial electrification efforts generate value strategy? Beyond having active gas develop- for member-owners, the co-op at large, as well ment in the region, some other conditions that as the environment. As with a variety of other may be positive indicators are: beneficial electrification strategies, electrifying • Relatively low electric rates in comparison gas compressors benefits the environment to local natural gas prices — Ultimately, the through lower emissions. Natural gas-driven pipeline operators will need to make an eco- engines, commonly used in the oil and gas in- nomic evaluation, but if your co-op already dustry to drive rotating equipment, are a point services some electric compression load, source of the criteria pollutant nitrous dioxide this should serve as an indication that rates (NO2). NO2 is key to smog formation and can might already be competitive in your area. exacerbate respiratory conditions like asthma. • Distribution infrastructure in proximity Electric compressor stations emit no NO2 on site, and even when accounting for power plant to existing gas compressor stations — Cooperative GIS information can be coupled emissions, they emit 80 percent less NO2 than a comparably sized natural gas-driven com- with satellite imagery to identify compres- pressor.1 In the case of dual-drive compression, sor stations that may be good targets for operators can place a runtime limit on natural electrification based on proximity to co-op gas operation. The smaller the gas runtime, the assets. Distribution cooperatives in Oklahoma larger the emissions savings. Currently, DD are beginning to explore this approach. operates units so that the natural gas engine • Opportunities for industrial accounts to runs less than 15 percent of total runtime, bid into power markets — Compressor sta- yielding 85 percent or more of the emissions tions in ERCOT, for example, can readily gen- savings of a fully electric compressor station. erate revenue by bidding into the market as a Load Resource. This is an important “stacked” Gas engines and compressors also release sig- benefit that accrues in addition to other nificant amounts of methane (CH4) due to operations and maintenance savings. In other incomplete combustion and fuel slippage. markets, G&T cooperatives with capacity

1 Based on an analysis of similarly sized natural gas and electric compressors, using emissions data from Caterpillar (natural gas engine) and the Electric Reliability Council of Texas (ERCOT). 2 Methane’s potency as a greenhouse gas declines over time. It is roughly 50 times as potent after 20 years, 30 times after 50 years and only 6.5 times after 100 years. C&I Case Studies in Beneficial Electrification: Natural Gas Pipeline Compressor Stations | 7

constraints may need to play a larger role in including the level of investment required to facilitating the right economic incentives. extend service to these facilities. In most cases, the developers of electric compressor stations • Heavily developed gas fields where elec- are willing to partner with co-ops to facilitate tric compression will provide significant mutual beneficial electrification projects. “We reductions in point emissions and assist were able to work with gas compressor owner- with air permitting — Regions with heavy operators and Dual Drive Technologies to show gas development, such as portions of Texas them that the fuel savings of electrification and the Marcellus Shale formation in the were significant enough to cover the cost of northeast may benefit from electrification line and capacity upgrades, as well as the dual- due to air quality concerns. drive units,” according to Smallwood. “We If your cooperative meets any of the above cri- have worked well together with Dual Drive teria, it may be time to internally evaluate the to maximize benefits for all involved parties —

business case for electrifying these facilities, a win-win-win.” n

About the Authors Peter May-Ostendorp, PhD, LEED AP O+M, Principal and founder of Xergy Consulting Dr. May-Ostendorp has been investigating emerging energy savings and distributed energy opportunities at the building-grid interface since 2004. He has authored dozens of publications on product efficiency, building controls, and smart systems, and his research has led to mandatory efficiency standards, voluntary labeling programs, and utility efficiency programs. He utilizes his expertise in building systems, building energy modeling, controls, and energy data science to research, develop, and evaluate new clean energy technologies on behalf of diverse clients from the public and private sectors. He lives in the foothills of the San Juan Mountains with his wife and three children in Durango, CO and is a member of La Plata Electric Association.

Katherine Dayem, PhD, Principal, Xergy Consulting Katherine helps US and global clients investigate, analyze, and cultivate emerging clean energy resources at the grid’s edge. Her research is focused on identifying impactful new ways to save energy, from product-level to building-level, and has resulted in deep energy savings through innovative utility programs and the enactment of energy-saving regulations. Her recent work has delved into a wide range of topics including DC in buildings, low power modes of electronics and other end uses, and beneficial electrification. She lives in Durango, CO and is a member of La Plata Electric Association.

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Questions or Comments • Brian Sloboda, Program and Product Line Manager – Energy Utilization/Delivery/Energy Efficiency, NRECA Business and Technology Strategies, End Use/Energy Efficiency Work Group: [email protected] • To find more resources on business and technology issues for cooperatives, visit our website.

business and technology strategies distributed energy resources work group

The Distributed Energy Resources (DER) Work Group, part of NRECA’s Business and Technology Strategies department, dentifying the opportunities and challenges presented by the continued evolution of distributed generation, energy storage, energy efficiency and demand response resources. For more information, please visit www.cooperative.com, and for the current work by the Business and Technology Str ategies department of NRECA, please see our Portfolio.

Legal Notice This work contains findings that are general in nature. Readers are reminded to perform due diligence in applying these findings to their specific needs, as it is not possible for NRECA to have sufficient understanding of any specific situation to ensure applicability of the findings in all cases. The information in this work is not a recommendation, model, or standard for all electric coopera tives. Electric cooperatives are: (1) independent entities; (2) governed by independent boards of directors; and (3) affected by different member, financial, legal, political, policy, operational, and other considerations. For these reasons, electric cooperatives make independent decisions and investments based upon their individual needs, desires, and constraints. Neither the authors nor NRECA assu me liability for how readers may use, interpret, or apply the information, analysis, templates, and guidance herein or with respect to the use of, or damages resulting from the use of, any information, apparatus, method, or process contained herein. In addition, the authors and NRECA make no warranty or representation that the use of these contents does not infringe on privately held rights. This wo rk product constitutes the intellectual property of NRECA and its suppliers, and as such, it must be used in accordance with the NRECA copyright policy. Copyright © 2018 by the National Rural Electric Cooperative Association.

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