Grid operator highlights pipeline constraints; growing role of renewables
The ISO New England control room in Holyoke manages energy transmission throughout Massachusetts.
With New England increasingly dependent on natural gas and the region moving to a "hybrid fleet" featuring more renewable power generators, power prices and system reliability are directly tied into the ability to move lower-priced gas supplies through pipelines and into the region, according to grid operators who provided an annual overview of the system on Tuesday.
Gordon van Welie, president and chief executive officer of ISO New England Inc., told reporters during a "State of the Grid" conference call that natural gas-fired power plants produced 49 percent of the electricity generated in New England in 2015, but the system is stuck in a "precarious position" in the wintertime when demand for natural gas rises for both power plants and residential home heating.
With Beacon Hill lawmakers gearing up for a major energy policy debate, van Welie clarified that ISO New England does not favor any fuel or technology or transmission or pipeline project, does not buy or sell electricity and has no financial connection to the natural gas industry.
In part due to the production of natural gas from the Marcellus Shale, New England can take advantage of wholesale energy prices that are competitive with other states if they are able to address pipeline constraint issues, he said. But under current conditions, prices rise and the system is constrained for 30 to 50 days per year when temperatures dip into the teens or lower, he said, noting there have been "hardly any issues" in recent weeks marked by mild temperatures.
"No one can predict what the weather will be in the long run," van Welie said, adding that natural gas-fired power generation is also required to ensure "fast and flexible" energy and grid reliability as system operators learn more about the reliability of wind and solar sources that are growing in popularity.
"The generation fleet is shifting to a hybrid fleet from a system based almost entirely on large-scale oil, coal, and nuclear generators located near large population centers," van Welie said. "This hybrid grid will continue to include large generators, but they will be mostly natural gas power plants located near large population centers and wind facilities in remote locations. Increasingly, our resource mix will include distributed generation, such as solar panels located at customers' sites, and resources that reduce demand, such as energy efficiency measures and companies that can lower their power usage when needed."
Oil and coal plants are retiring "in large numbers," van Welie said, but still play an important role during peak demand periods in the winter. He said natural gas and wind energy would replace retiring plants and discussed the need for transmission improvements to pull wind and hydro power from sources in northern New England and in Canada and deliver it to more populated areas in southern New England.
Natural gas pipeline projects have run into resistance from residents along the proposed routes, elected officials and environmental groups. Asked about his confidence level that projects will get approved, van Welie said it's hard to gauge which ones will make it through siting and contractual hurdles. "I think something will come to fruition," he said.
Investors and market-based competition are working to fill gaps in power demand and a pay-for-performance system going into effect in 2018 will further mitigate reliability risks, van Welie said.
In November, Attorney General Maura Healey released a study that concluded additional natural gas pipeline capacity is not the best solution to meet the state's long-term energy demand needs.
Healey, whose report puts her at odds with Gov. Charlie Baker's desire to increase natural gas capacity, said that while new pipeline capacity would have consumer price benefits, it would also carry significant up-front costs with risks for ratepayers of long-term commitments to pay for new infrastructure. The study, funded with grants from the Barr Foundation and the John Merck Fund, demonstrated "that a much more cost-effective solution is to embrace energy efficiency and demand response programs that protect ratepayers and significantly reduce greenhouse gas emissions," she said.
New England's power system features 350 generators and 31,000 megawatts of generating capacity, including 15,000 megawatts of generation added since 1997. The system's all-time peak demand was 28,130 megawatts on Aug. 2, 2006. About 80 percent of the generation capacity added since 1997 runs on natural gas and 65 percent of all proposed new generation would use natural gas.
Other points raised by van Welie during the conference call:
-- State policy requirements are also driving up the demand for wind and solar power, and energy efficiency improvements are driving down peak demand power levels.
-- The need for natural gas supplies will not be offset by hydropower coming down from Canada, although that new source of power would help. It's "important," van Welie said, to ensure that hydropower will be available to New England when the system needs it.
-- Pilgrim Nuclear Power Plant in Plymouth, which last year announced its plans to close, "was driven out of the market by low natural gas prices."
-- While most solar power is based on "behind the meter" sites off the grid, the grid overseers are seeing an aggregate effect on the power system during daylight hours, van Welie said.
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