New England 2019 Regional Energy Outlook describes shifts, challenges

Thursday, March 21, 2019

New England's electricity system is shifting toward a "hybrid grid," according to the operator of New England's wholesale electricity markets and electric transmission system. A recent report by ISO New England, Inc. describes the electric sector's transition towards generating resources with lower carbon emissions and the resulting implications for the environment and the economy.

ISO New England is the federally-designated regional transmission organization serving New England. The grid operator recently released its 2019 Regional Energy Outlook, a document described as “one of the many ways the ISO keeps stakeholders informed about the current state of the grid, issues affecting its future, and ISO initiatives to ensure a modern, reliable power system for New England.”

In the report, ISO New England emphasizes the region’s decarbonization and shifting resource mix, noting that “carbon emissions from the grid have fallen by roughly a third... the region is on its way from having an electric grid dominated by fossil-fuel and nuclear generation to one that includes large amounts of wind and hydro generation and hundreds of thousands of small solar and storage systems spanning the six states. The states’ next step in their decarbonization journey is to transition the emissions-heavy heating and transportation sectors to low-carbon electricity.”

ISO-NE describes the way these changes are happening as “challenging reliable system operations and competitive wholesale electricity markets.” ISO says that “for the foreseeable future, the region will remain vulnerable to energy shortfalls and wholesale price volatility as more and more resources with limited-energy ‘inventories’ (natural gas generation, wind, solar, battery storage) displace resources with on-site fuel that can sustain operation for extended periods (oil, coal, nuclear, dual-fuel generation).”

ISO New England says its competitive markets weren’t designed to telegraph future energy scarcity conditions, compensate resources for fuel inventory, achieve carbon reduction goals, or specifically lead to renewable development. It notes that state-sponsored resources suppress market prices when in markets, but would lead to overbuild if outside markets. ISO advocates, “Establishing a realistic price on carbon remains a more seamless and simpler way to achieve clean-energy goals through markets without distorting competition, but this is not in the ISO’s jurisdiction. State or federal policymakers could pursue this direction but have not done so to date.” ISO notes, “Nuclear resources will prove critical to meeting both decarbonization and energy-security goals for years to come, but how they can remain financially viable is still unclear.”

ISO-NE says it is focused on 3 elements to support the transition to the “hybrid grid”: supporting the rapid transformation of the region’s electricity supply and demand mix, maintaining a robust transmission system, and ensuring energy security. 

The grid operator also noted limitations on what tools it can use to address these challenges: “Importantly, ISO New England does not have the authority to dictate investments in energy infrastructure that can help ensure that the region’s energy needs can be met in all seasons, under all conditions. Our toolkit is to create financial stimuli through the wholesale electricity markets that will drive action. Opposition or impediments to infrastructure decisions will only exacerbate the region’s energy-security constraints.”

No comments:

Post a Comment