Project Need
Supply
According to EIA, the volume of natural gas delivered to Florida customers grew from 534,000 MMcf in 2001 to 937,000 MMcf in 2008. That is an average annual growth rate of 7.3 percent. The vast majority of that gas, more than 85 percent, goes to electric power production, some 800,000 MMcf out of the total of 937,000 MMcf. The growth rate in electric power between 2000 and 2010 has been 12 percent.
Part of that historic growth derives from population increases and part from increases in customer demand. In terms of GDP, Florida enjoyed steady increases over the last two decades, generally outpacing the national GDP. In the last two years, Florida’s economic growth slowed and even declined below the national level. Nationally, EIA is projecting growth in electric demand to resume and continue at about 1 percent annually.
In its 2009 Load and Resource Plan, the Florida Reliability Coordinating Council (FRCC), a NERC region responsible for electric reliability in Florida, is projecting an annual growth rate through 2019 of slightly more than 2 percent, more than twice the national growth rate. Net energy for load grows from 228,000 gigawatt hours to 267,000 GWH.
Right now, natural gas comprises about 40 percent of the generation capacity fuel mix for the state, up from 16.8 percent in 1998. Current projections indicate that natural gas generation will supply 46.7 percent of the state’s energy generation by 2018. That is nameplate capacity. In 2009, natural gas provided about 46 percent of gigawatt hours produced. FRCC is projecting 22 percent growth in gas-fueled GWH over the next decade, from 98,000 to 126,500.
Source: Florida Public Service
Commission
The FPSC has also noted the challenges in meeting the demand for natural gas with diverse sources of supply. Since there are no natural gas production facilities and only limited natural gas storage capacity within the state, Florida is heavily reliant on daily deliveries from outside sources. Currently, the state receives natural gas primarily from the Florida Gas Transmission and Gulfstream pipelines which cumulatively, can provide up to 3.3 Bcf per day. Interstate pipeline capacity into the state will increase by 0.5 Bcf per day when the Southern Natural Gas Company completes its Cypress pipeline project, which will deliver gas from Georgia. As noted by the FPSC in its ten year review of utilities’ site plans, the limited sources of natural gas supply remain a concern. In this regard, the FPSC has concluded that the primary threat to electrical generation reliability in Florida is the possibility of natural gas supply disruption such as that caused by hurricanes.
Demand
The best predictor of growth in natural gas demand in Florida can be found in the Ten-Year Site Plans of the generators themselves.
Collectively, Florida utilities expect to add 11,000 MW of gas-fueled generation by 2018, according to the FPSC’s aggregation of the Ten-Year Site Plans.
LNG producers around the world are aware of the evolving market in Florida. They are attracted by this growing demand and by the seasonal nature of that demand. While much of the U.S. natural gas is winter-peaking, Florida demand is summer-peaking.