ISO New England Regional Electricity Outlook 2016

The New England regional power system is in a state of major transformation, according to regional grid operator ISO New England, Inc.'s 2016 Regional Electric Outlook.

ISO New England is the private, non-profit entity that serves as the regional transmission organization for New England.  In this role, the ISO plans and operates the New England bulk power system, administers New England’s organized wholesale electricity market, and has some responsibility over system reliability.

The 2016 Regional Electric Outlook report is the latest annual installment of the grid operator's update on the state of the grid and the ISO’s efforts to ensure reliable electricity and to improve services and performance.  This year's report describes the New England grid administrator as "in the vanguard of a major transformation in how electricity is produced and delivered in the US."

Three waves of change -- natural gas, renewable energy and demand resources, and distributed generation -- are affecting New England's fleet of power resources, according to the report:

Natural-gas-fired generation has displaced older coal, oil, and nuclear plants. Weather-dependent renewable power resources and energy-efficiency measures are multiplying. On the horizon comes a “hybrid grid”—a combination of large power resources supplying the regional system while smaller ones directly supply consumer sites.

According to the report, coal, oil, and nuclear resources are retiring; it noted that resources representing about 30% of regional capacity have committed to cease operation or are at risk of retirement by 2020.  Most power plants planned to replace them will rely in part or in whole on natural gas or renewable generation.  The report notes:

Our region's natural-gas-fired power resources are among the newest, most efficient, and lowest-emitting plants in the country. When their access to low-priced gas from the Marcellus shale is unrestricted, New England has reliable, low-priced electricity.

The report also states that "wintertime access to natural gas has grown tight over recent years because the regional fuel transportation network has not kept up with demand from both generation and heating sectors."  As a result of pipeline constraints, the ISO notes "grid reliability challenges, emission increases during winter, and spikes in wholesale electricity prices."

The report also describes the ISO's tactics for managing the reliability risks associated with these shifts in the region's energy mix, including stronger "pay for performance" financial incentives for power resources to perform as required.  It cites various ISO studies indicating "that, ultimately improving the natural-gas-delivery infrastructure in New England" will best address reliability concerns, price spikes, and unnecessary emission impacts from oil and coal units during winter.

The report, along with previous years' reports, are available on the ISO's website.