Grid operator expects sufficient electricity this summer

Wednesday, May 1, 2013

Regional electricity grid operator ISO New England, Inc. issued its 2013 summer outlook on April 29.  In that report, New England regional transmission organization found that regional electricity supplies during the upcoming summer are expected to be sufficient to meet consumer demand under normal weather conditions.  But if any number of contingencies occur, such as a heat wave, the grid could be seriously strained.

ISO New England noted that under normal conditions, there should be enough electricity this summer.  But it identified a series of risk factors could tip the balance of supply and demand for electricity, including extreme summer weather conditions or unexpected resource outages.  These factors could create "operational challenges", meaning a hard time finding enough electricity to meet peak demand.  New England may be forced to resort to  importing emergency power from neighboring regions, and asking businesses and people to voluntarily conserve energy.

The report's base assumption is for "normal" summer weather conditions of about 90 degrees in key southern New England cities.  Under these conditions, ISO New England forecasts electricity demand could reach 26,690 megawatts (MW).   If an extended heat wave pushes temperatures to 95, demand could rise to 28,985 MW.  Last summer’s load peaked July 17 at 25,880 MW, about 3% smaller than the base amount forecast for summer 2013.  New England set its record for peak demand on August 2, 2006, when demand reached 28,130 MW.

On the supply side, ISO New England identified several risks that could lead to unexpected shortages of electricity.   First, most natural gas pipeline maintenance in the region is scheduled for the summer months.  Maintenance activities could affect natural gas supplies to some power plants. On this point, the grid operator said it was coordinating with the pipeline companies to ensure that the supply is adequate for power generation during the maintenance season.

Second, liquefied natural gas (LNG) is in high global demand.  Current LNG prices are roughly three times higher in Europe and Japan than in the United States.  This mean LNG deliveries into New England might be reduced this summer.  At times, New England electric generation relies on LNG, which could also affect power plant operations.

Overall, ISO New England reported that it expects electricity supplies to be sufficient to meet consumer demand under normal weather conditions this summer.  If shortages occur, they will likely affect both the reliability of the grid and the wholesale price of power.  The winter season is likely to be worse, as regional demand for natural gas for heating increases during the winter, placing a tighter squeeze on the amount and price of gas available for electric generation.  The grid operator's prediction will be put to the test in the coming months.

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