New England must balance multiple objectives, says grid operator

New England must balance multiple objectives as it navigates the clean energy transition, according to the operator of the region's electric grid and wholesale electricity markets.

ISO New England, Inc. is the regional transmission organization serving all of New England except northern Maine. ISO-NE administers the regional electric transmission system and wholesale markets for electricity. 

The region must increasingly balance multiple objectives in light of state policies promoting renewable energy and decarbonization, according to recent remarks by ISO-NE President and Chief Executive Officer Gordon van Welie. 

Historically, the grid and markets were designed to maintain the reliability of the regional bulk electric system, while minimizing costs by selecting the lowest-price resources: what ISO-NE calls the "least-cost security-constrained economic energy-dispatch model". But according to a presentation by Gordon van Welie at the March 22 meeting of the New England Electricity Restructuring Roundtable, "there is not an adequate regional mechanism to sufficiently value clean energy attributes or price carbon – which are public policy decisions."

Additionally, each of the six New England states has adopted various policies regarding renewable energy and decarbonization or beneficial electrification of the whole economy or of specific sectors like transportation and heating. ISO-NE projects a significant increase in electricity consumption as a result of these state policies, with the potential to triple existing peak demand by the early 2030s. This will require a large scale of carbon-free generating resources. According to van Welie, "Existing carbon-free energy resources are an important part of achieving these policies."

The ISO-NE leader noted the consequence of these dynamics: "Greater dependency on the capacity market for all resources, and a need for supplementary, out-of-market revenues for carbon-free resources that are uneconomic in the wholesale market".

ISO-NE 2024 Regional Electricity Outlook

ISO New England Inc., the operator of New England's wholesale electricity markets and transmission system, has published its 2024 Regional Electricity Outlook. The report examines trends affecting supply and demand for electricity, through the ongoing clean energy transition.

Specifically, ISO-NE notes the dawn of "a new era in our energy history", as broad decarbonization in the name of climate change becomes public policy. According to the grid operator, "This era will be marked by rapid and significant change. Over the next 20 years, we expect that renewable resources will displace natural gas as the main source of electricity generation in the region—just as natural gas displaced coal and oil generation beginning 20 years ago."

As in its most recent prior Regional Electricity Outlook report (issued in 2022), ISO-NE's 2024 report identifies "four pillars for a reliable transition to a greener grid: clean energy, balancing resources, energy adequacy, and robust transmission."

• Pillar One: Clean Energy. "In the coming years, construction of unprecedented amounts of clean energy resources will be needed to meet state decarbonization goals while serving significantly increased demand."
• Pillar Two: Balancing Resources. "Dispatchable generators, energy storage, demand response, and a range of services will be crucial to ensure equilibrium as intermittent resources see swings in energy production."
• Pillar Three: Energy Adequacy. "Risks to energy adequacy could increase if expected renewable resources don’t materialize, needed transmission isn’t built, or fuel supply chains are disrupted."
• Pillar Four: Robust Transmission. "Significant investment in new and existing infrastructure will be critical to enabling the clean energy transition."

In its 2024 report, ISO-NE rated each pillar as green, yellow, or red, based on its relative health and readiness to meet the needs ahead. For example, ISO-NE assigned the first three pillars a rating of "yellow trending green", but ranked transmission development as yellow.

The report concludes that collaboration is essential:

All four pillars must be robust—there is no path to a reliable, clean energy future without all four elements working in concert. That same balance is required from the partnership among the region’s energy stakeholders, with each—the ISO, policymakers, and market participants—doing their part to bring a shared vision for a greener future to fruition.

ISO-NE also notes the importance of education for "all stakeholders—including consumers—to understand how our electric power system operates, and the roles we each can play in ensuring it is clean, cost-effective, and reliable for generations to come."