New England’s regional electric grid is facing “significant vulnerabilities” as the power generation mix shifts from nuclear and oil-fueled power plants, toward renewable energy and natural gas-fired units, the president and CEO of the grid says.
“Industry trends and state policies are driving changes in the system,” Gordon van Welie, ISO-New England’s top executive, said during a “State of the Grid 2019” presentation to reporters Wednesday.
“But industry trends and state policies are driving changes in the system,” van Welie said. “Nuclear, oil, and coal-fired power plants that operate with fuel stored onsite are retiring in greater numbers and they are being replaced by more natural gas-fired power plants and renewable resources. The new resource mix is cleaner but it is also dependent on the weather or timely natural gas deliveries.”
Cheaper natural gas prices have made electricity produced by gas-fired units less costly than energy produced by nuclear power plants, Kallanish Energy learns.
New England had eight nuclear power stations in 1990 that comprised 25% of the region’s power producing capacity. Today, three of the plants remain and comprise 13% of the overall generation capacity, but actually generate 30% of the electricity.
In the coming years, wind power will play an even greater role in New England’s energy portfolio, according to van Welie. Wind power now comprises 66% of the new energy resources preparing to connect to the ISO-NE grid.
“The region’s vulnerabilities are significant and the ISO has identified two areas of concern,” said van Welie. “They are energy security risk and shifting policy priorities that are challenging competition in the markets.
“While it will bring benefits, the evolving resource mix could also intensify the risk that there may not be enough energy to meet demand on the coldest days in winter. As the fleet shifts away from power plants with stored fuels to resources that depend on weather or just-in-time fuel deliveries, the risk of insufficient energy is likely to expand to other times of the year as well,” according to van Welie.
The ISO-New England head said the region’s fuel infrastructure remains limited, whether it’s limited pipeline capacity or limited storage for oil or liquefied natural gas.
Competition in the markets is vulnerable even though, to date, competition has delivered on the original state and federal goals that created the markets 20 years ago, van Welie said.
Markets have sparked competition that has lowered wholesale prices and spurred investments of more than $16 billion in new, more efficient, cleaner power plants and resources that reduce demand. Competition shifted the burden of paying for unwise investment decisions from ratepayers and onto investors.
The pipeline system that brings natural gas into New England is constrained, which limits how much can be brought into the region during periods of high demand and also results in price spikes during those periods.
“We don t think we’re going to see any significant pipeline expansion into the region,” van Welie said. “We have to make do with what we have.”
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