It has been some time since I last published an article sharing perspectives on energy markets. The recent call for white papers(
https://lnkd.in/gXggzeAG
) during the
Young Pipeline Professionals USA (YPP USA)
symposium provided a much needed opportunity to contribute insights on current and future natural gas market dynamics.
An important aspect of this process was receiving constructive feedback from professionals actively managing and optimizing some of North America’s largest midstream assets. You know who you are—your expertise and input were greatly appreciated.
The projected cost savings from ERCOT’s Real-Time Co-optimization (RTC) served as a strong source of inspiration for this white paper. According to ERCOT, RTC could save the system between $2.4 and $6.5 billion annually, representing a potential 19% reduction in system costs.
Recognizing the parallels between fluid and power flows, system configurations and understanding how both electricity and natural gas market rules and designs shape these flows, revealed several opportunities and gaps in current natural gas market structures.
One key consideration is that RTC is currently unique to ERCOT (Texas), whereas pipeline systems operate on a national scale. Therefore, if the proposals outlined in the white paper are to be considered, a phased approach, potentially beginning in Texas would likely be the most practical initial step, rather than pursuing nationwide implementation from the outset.
Beyond the potential cost savings, this approach could significantly enhance market liquidity for all market participants.
Further constructive feedback and perspectives from those deeply engaged in these markets are highly welcomed.
