ISO-NE files info on 2022-2023 capacity market auction

This week the operator of New England's wholesale electricity markets made a series of filings with its federal regulator providing information on its upcoming thirteenth forward capacity auction, through which electric generators may commit to providing electric capacity during the period from June 1, 2022 through May 31, 2023.

ISO New England Inc. is the independent system operator and wholesale market-maker for most of New England's electricity grid. It is a private, not-for-profit entity, which operates pursuant to a tariff on file with the Federal Energy Regulatory Commission. As part of its planning for system operations, ISO-NE operates a forward capacity market through which it conducts annual auctions through which qualified generators and other resources may bid to obtain commitments to provide capacity in a future year, in exchange for which resources will be compensated. The next primary auction for capacity supply obligations will be Forward Capacity Auction 13 (or FCA 13), which will be held beginning on February 4, 2019, and will cover the 2022-2023 capacity commitment period.

In advance of each primary auction, ISO-NE calculates an "Installed Capacity Requirement," which it defines as a measure of the installed resources that are projected to be necessary to meet reliability standards in light of total forecasted load requirements for the New England Control Area and to maintain sufficient reserve capacity to meet reliability standards. In computing the Installed Capacity Requirement, the grid operator considers parameters and assumptions including load forecast, resource capacity ratings, and resource availability. It also considers what relief can be obtained during a capacity deficiency through measures including emergency assistance (tie benefits) from neighboring interconnected regions (New Brunswick, New York, and Quebec), load reduction by reducing system voltage by 5%, and running the system at a minimal level of operating reserve.
 
In its November 6 Installed Capacity Requirement filing, the grid operator told the Commission that it proposed a installed capacity requirement for FCA 13 of 33,750 megawatts, after taking into account 969 megawatts of credits over interconnection with Canadian utility Hydro-Quebec.

In a parallel Informational Filing for qualification in FCA 13, the grid operator noted that 31,432 megawatts of existing generating capacity resources qualified for the 2022-2023 capacity commitment period, as did 80 megawatts of existing import capacity resources, and 3,413 megawatts of existing demand capacity resources, totaling 34,925 megawatts of existing capacity. Some resources submitted bids to retire, and 3,223 megawatts of resources submitted bids to withdraw in part or in whole from the auction if it clears below a defined price. Additionally, ISO-NE qualified 238 new capacity resources, totaling 8,716 megawatts.

ISO-NE will conduct its thirteenth forward capacity auction starting on February 4, 2019.

Energy East pipeline case suspended

The developed of a proposed C$15.75 billion Canadian oil pipeline has asked Canadian regulators to temporarily suspend their review of the project, following the regulator's decision to consider the project's indirect greenhouse gas emissions and other factors as part of its environmental review.

At issue are the proposed Energy East Pipeline and the related Eastern Maineline Project, proposed by affiliates of TransCanada Corp. to transport "about 1.1 million barrels of oil per day from Alberta and Saskatchewan to the refineries of Eastern Canada and a marine terminal in New Brunswick" and to ensure natural gas supply to utilities in Ontario and Quebec.  In 2014, the developed applied to Canada's National Energy Board for approvals required for the 4,500-kilometer project's development.

That case remains pending, but a recent decision about the scope of environmental review has prompted the developer to ask for a temporary pause of the case. On August 23, 2017, the National Energy Board released its final decision establishing a List of Issues and Environmental Assessment Factors to be considered in its review of the projects.  The factors set for consideration include greenhouse gas emissions.  While the Board's environmental factors typically include only direct greenhouse gas emissions -- those emitted by the project itself -- including indirect emissions -- in this case the Board decided to include indirect greenhouse gas emissions as well:

Given increasing public interest in GHG emissions, together with increasing governmental actions and commitments (including the federal government’s stated interest in assessing upstream GHG emissions associated with major pipelines), the Board is of the view that it should also consider indirect GHG emissions in its NEB Act public interest determination for each of the Projects.

On September 7, the applicants filed a letter requesting a 30-day suspension of the Board's review process to give applicants time to "review the Decision, the resulting implications to the Projects, and the respective Project applications."  The next day, the Board issued a ruling that it "will not issue further decisions or take further process steps relating to the review of the Projects until 8 October 2017."

The case remains suspended until that time. 

Report: New England electric sector will face gas supply deficit

A recently released report on the adequacy of New England’s natural gas pipeline infrastructure has identified the potential for shortfalls in gas supply to electric generators through 2020.  The November 20, 2014 report, Assessment of New England’s Natural Gas Pipeline Capacity to Satisfy Short and Near-Term Electric Generation Needs: Phase II, was prepared by consulting group ICF International for regional electric grid operator ISO New England Inc.  It found “a high probability that the electric sector will have a gas supply deficit on 24 to 34 day per winter by 2019/20.”

The Phase II report follows on a 2011/12 “Phase I” study by ICF of the adequacy of the natural gas pipeline infrastructure in New England to serve the combined needs of the core natural gas market and the regional electric generation fleet.  In the years since the Phase I study, existing natural gas and electric power systems have experienced significant changes, with further changes projected.  ISO-NE also identified the need to extend the power sector gas supply adequacy analysis beyond the peak winter and summer demand day, to examine supply adequacy throughout the peak winter demand period (December 1 through February 28).

ICF’s Phase II report presents its updated findings given these changes.  Its conclusions include:

• Despite the likelihood of 450 MMcf/d of new interstate natural gas transportation capacity being added by the end of 2016, the New England market is likely to remain supply constrained through 2020.
• Updating projections for energy efficiency has a significant impact on projected gas consumption for electric generation. The studied cases reduced projection winter peak day gas consumption by as much as 550,000 Dth by 2019/20.  However, this was not sufficient to eliminate the projected winter peak day supply deficits.
• Future imports of liquefied natural gas (LNG) into the region are likely to be well below the rated capacity of the import terminals.  Neither the Northeast Gateway nor Neptune offshore import terminal has received any shipments since 2010, and neither was projected to receive any future LNG shipments in this study.
• The Maritimes & Northeast Pipeline from Eastern Canada into New England is expected to continue to flow at full capacity on a peak winter day. Eastern Canadian gas production is expected to decline overall from 2015 through 2020, even as the Deep Panuke field ramps up its production. Historically, the Canaport LNG terminal in St. John, New Brunswick, has been managed to keep the pipeline full on peak winter days (when New England gas demand and gas prices are highest). In the future, with fewer LNG shipments coming in, the pipeline will flow full on fewer winter days, reducing natural gas supplies into New England.
• The Winter Near-Peak analysis indicates that gas supply deficits may occur not just on peak days, but also on multiple high demand days throughout the winter. Based on projected gas supplies, local distribution company (LDC) demands for retail gas supply, and electric generator gas demands, there is a high probability that the electric sector will have a gas supply deficit on 24 to 34 day per winter by 2019/20.

With the Phase II report now in ISO New England's hands, the grid operator has an updated analysis of the adequacy of the region's natural gas pipeline infrastructure to meet all the demands on it through 2020.  ISO New England describes itself as playing three critical roles: grid operation, market administration, and power system planning.  From all three of these perspectives, projections of a high probability of gas supply deficit for the electric power sector are troubling.  ICF's findings thus may shape how ISO New England -- or state and federal regulators -- reforms the New England gas and electric markets.

Canada's Energy East Pipeline Project

A subsidiary of Canadian energy company TransCanada has proposed a crude oil pipeline running 4,600 kilometers from Alberta and Saskatchewan to Saint John, New Brunswick.  The proposed Energy East Pipeline Project would enable Western Canadian crude oil to be shipped east across six Canadian provinces, expanding economic opportunities for refining and export -- but like other major pipeline projects, the Energy East project faces regulatory hurdles.

On March 4, 2014, Energy East Pipeline Ltd., a wholly owned subsidiary of TransCanada Oil Pipelines (Canada) Ltd., proposed the project which entails the conversion of about 3,000 kilometers of existing natural gas pipeline to an oil transportation pipeline, new pipelines in Alberta, Saskatchewan, Manitoba, Ontario, Québec and New Brunswick, and marine facilities that enable access to other markets by ship.  If built, the $12 billion project could carry up to 1.1 million barrels of crude oil per day.

The major motivation behind the line is the relative surplus of Western Canadian crude oil, including fuel produced from the Alberta oil sands.  While Alberta and Saskatchewan produce substantial oil, relatively little capacity to ship that crude to refineries means relatively low prices for producers.  Meanwhile, refineries in Quebec and Atlantic Canada currently receive 86% of their crude oil from foreign sources.  TransCanada pitches the Energy East project as giving these Eastern Canadian refiners access to "reliable, low-cost Western Canadian crude."  The developer also points to positive economic development impacts, including about 10,000 jobs and an estimated $35 billion added to Canada’s gross domestic product over 40 years, as well as the relative safety of shipping oil by pipeline as opposed to by rail or truck.  Notably, the project also allows TransCanada to make better use of its existing natural gas pipeline system, which has excess unused capacity.

Like the Keystone XL pipeline in the U.S., the Energy East project faces opposition from both local siting concerns and global worries about the environmental impacts of "tar sands" crude production.  Some have also expressed concerns that the project would disrupt natural gas flows to Canadian consumers, although TransCanada has said that it has plans to build more lines to meet any increased demand.

Under Canadian law, interprovincial pipelines are federally regulated by Canada's National Energy Board (NEB).  According to its website, TransCanada expects final regulatory approval in the fourth quarter of 2015, with the project commissioned and placed in service in 2018.  How the regulatory process plays out will affect when -- and whether -- the Energy East pipeline project moves forward.

July 22, 2011 - Nova Scotia tidal energy: past, proposed, and future

This week's story about a possible hydrokinetic tidal energy project in Nova Scotia's Bay of Fundy reminded me of large-scale tidal projects that have been proposed in northeastern North America over the years.  Chief among these may be the Passamaquoddy Power Project proposed in the early 20th century, but the PPP wasn't the only grand project dreamed up.

Sunset over the harbor at Five Islands, Georgetown, Maine.

One tidal project floated in the early 1980s involved developing up to 6,000 MW of tidal power capacity through two dams in Nova Scotia.  One dam would have blocked off Shepody Bay (the arm of the Bay of Fundy reaching toward Moncton and the Petitcodiac River near the Nova Scotia - New Brunswick border), while the other would have walled off part of Minas Basin between Cape Blomidon and Parrsboro.  Neither of these dams was ever built, although the tidal energy resource of Minas Basin continues to draw interest.

One reason may be the impact of the projects on coastal communities along the Bay of Fundy -- and in fact well out into the Gulf of Maine.  A news article from 1981 suggests that these tidal dams would have increased the tidal range in Portland, Maine -- about 300 miles away -- by up to 18 inches.  This increase in tidal range could have negatively impacted coastal communities, eroding soil, causing property damage, and tidal flooding.  By contrast, the article suggested that the Passamaquoddy project or a smaller one proposed for Half Moon Cove would not raise tides elsewhere.

These projects may not have been built, but with Nova Scotia's new community-based feed-in tariff, developers of in-stream tidal projects can expect $652 per MWh for qualified energy produced in the province.  Will Nova Scotia's feed-in tariff lead to more tidal projects in the Bay of Fundy?

June 28, 2010 - federal grant money for ethanol R&D; Syncrude found guilty in oil sands duck kill

Here's a "do you know..." for you: do you know anyone doing biomass R&D, especially working with cellulosic ethanol? There's a round of federal grants for research and development of handling processes and feedstock logistics. Grants are expected to average $5.5 million each.

DOE, USDA issue funding opportunity for biomass R&D

Up to $33 million is available for biomass research and development projects through a joint funding opportunity from DOE and the U.S. Department of Agriculture (USDA). The funding opportunity aims to develop new technologies in biofuels, bioenergy and high-value bio-based products.

Pre-applications are due July 13. 
DOE is interested in developing systems to handle large amounts of biomass feedstocks, such as wood chips and wood wastes.

One goal of this funding opportunity is to develop logistics systems that can handle and deliver large amounts of feedstock year-round for cellulosic biofuels production.  DOE’s Biomass Program is focusing its R&D efforts on ensuring that cellulosic ethanol is cost competitive by 2012. For more information on the agencies’ biomass goals, see DOE’s multi-year program plan and the USDA’s Bio-preferred Program, which aims to create a market pull for new products and technologies.

In the news: a Canadian judge has found oil sands developer Syncrude Inc. guilty of quasi-criminal charges related to the death of 1,600 ducks that became mired in oily settling ponds.  Allegedly, Syncrude knew or should have known that a large flight of ducks was inbound (one source says Syncrude had 48 hours notice based on radar) at a time when most natural ponds were frozen.  Syncrude was found guilty of depositing materials hazardous to ducks without deploying its "duck protection systems" in time to prevent these ducks from landing on the settling ponds.  The federal charges could be as high as $300,000 per bird.

Tide power: Irving has walked away from its exclusive rights to evaluate tidal power at 11 Crown-owned sites in the Bay of Fundy.  With Irving's relinquishment, the government will likely issue another RFP for the sites.

June 9, 2010 - tidal power in Maine: the Passamquoddy Power Project

Maine's historic wood and stone tide mills were just going dark in the 1930s. At the same time, larger tidal power projects were in the works. Chief of these was the Passamaquoddy Power Project, a large project designed to generate 300 to 500 MW of capacity.

In 1919, having returned from dam siting and building in South America, Dexter P. Cooper took some rest and relaxation on Campobello Island, just over the New Brunswick border from (and only accessible by road from) Lubec, Maine. As the August 1935 article in Popular Science put it:

With nothing to do, Cooper spent whole days watching the tides swirl past the island. He calculated the billions of horsepower going to waste. As a sort of hobby, he began imagining ways of putting the rising and falling water to work. In the end, he became convinced of the entire practicability of harnessing the Fundy tides.

What Cooper envisioned was the construction of five huge dams connecting various points and islands near the junction of Passamaquoddy Bay and Cobscook Bay. Cobscook Bay would be effectively walled off from Passamaquoddy Bay. As the Bay of Fundy's tide rose in Passamaquoddy Bay, the topography would make Passamaquoddy fill much faster than Cobscook. Once a five-foot head was built up, the penstocks would be opened and Passamaquoddy would fall down into Cobscook, spinning turbine generators along the way. Under expected conditions, the head could build up to as much as 18 to 23 feet. At low tide, gates would open and equalize the water levels.

Tidal projects have always had to deal with the effects of lunar time changes. Each night, the moon passes its zenith about 50 minutes later than the night before. In older times, this meant that the milling could only take place for part of the day, and not necessarily at convenient times. The Passamaquoddy project included an early pumped storage reservoir. A 180,000 horsepower pumping station at Haycock Harbor was to pump seawater into a 13,000 acre reservoir at 130' above sea level.

If you've ever been to Lubec, or if you follow tidal power projects, you probably know that the Passamaquoddy Power Project was never completed. I'm looking at the "why", to see what we can learn from history.

3/25/10

The big news in this corner of the continent is that Hydro-Quebec and New Brunswick Power have canceled their proposed deal. Details are still coming out, but key factors include the radical unpopularity of the deal in NB -- with some reports of as low as 8% of New Brunswickers supporting the deal -- and "increased costs and risk" for HQ. More to follow for sure.

In Maine legislative news:
The Utilities and Energy Committee has voted out an amended version of LD 1810, the Ocean Energy Task Force bill. This bill, proposed by Governor Baldacci's Ocean Energy Task Force, underwent a significant scaling back during the committee process, largely due to concerns over impacts to electric ratepayers. The Task Force, whose members included former Central Maine Power utility chief David Flanagan, was told to propose legislation that would remove obstacles to building 5000 MW of offshore and coastal wind and tidal energy in Maine. The result was a bill that included mandates to overbuild transmission, loosen the standards for the PUC's approval of transmission lines, have ratepayers finance generator lead lines, and expose all ratepayers to rates of up to 25 cents per kWh in order to pay for long-term contracts for ocean energy. Through extensive questioning by legislators and stakeholder involvement, the result is a dramatically scaled-back bill voted out of the Committee unanimously this evening. As voted out, the amended bill eliminates much of the the pro-transmission prejudices embodied in the original bill, and the provisions that would have had ratepayers backstop generator lead lines. The Committee also transformed an ocean energy RFP process that would have exposed ratepayers to potentially significant cost increases into a voluntary "ocean energy standard offer". This is a good result that will empower Maine's renewable energy industry and economy, without inappropriately exposing ratepayers to costs and risk.

When dam owner FPL Energy got approval to remove its Fort Halifax dam and hydroelectric station on the Sebasticook River in Winslow, Maine, many people voiced concerns ranging from bad energy policy (why remove clean hydro when we're doing all we can to install more renewable capacity?) to bankside erosion causing damage to houses. The naysayers were right about the erosion; yesterday, the town completed its $725,000 buyout and demolition project of the six houses on Dallaire Street that were in peril of falling into the river.

Central Maine Power's $1.6 billion MPRP transmission project runs into new trouble: the Sierra Club says the MPRP will harm wetlands.

Bangor Hydro is proceeding with an $8 million investment in smart grid infrastructure, despite not winning federal stimulus funding to support the project. Bangor Hydro plans to build on the company’s existing "advanced metering infrastructure". The utility projects this may add 50 cents to the typical residential bill.

Meanwhile, CMP's $190 million plan to install a new automated meter system at homes and businesses -- which did win $96 million in stimulus funding -- is drawing opposition from members of the International Brotherhood of Electrical Workers Local 1837. The union laborers are concerned that the automated meters will lead to 141 layoffs, including 85 meter readers. The Maine Public Utilities Commission is holding a public hearing today in Hallowell on the plan. CMP anticipates installing the meters in 2010 and 2011.

In Canadian news, through government utility Nalcor, Newfoundland and Labrador are commencing legal action against Hydro-Quebec over the Upper Churchill power sales agreements. Under the existing long-term contract, HQ pays one quarter of one-cent per kWh, and one-fifth of one cent for the 25 years starting in 2016 -- less than 5 per cent of the power's commercial value. According to Newfoundland and Labrador Premier Danny Williams, in 2008, Hydro-Québec reaped profits of about $1.7 billion from the Upper Churchill hydro dams, while owner Newfoundland and Labrador was paid $63 million. Nalcor will also ask Quebec's Régie de l'Énergie to require HQ to provide access to its transmission system for export of power from the proposed Lower Churchill expansion project.

Also in Canadian news, there's been an odd wrinkle in the HQ acquisition of NB Power. A leaked document suggests that New Brunswick's power transmission and distribution systems are no longer for sale; NB Power would continue to operate as a New Brunswick-owned and operated Crown corporation. The revised deal is reportedly now worth $3.2 billion and would still include hydroelectric facilities and the Point Lepreau nuclear power plant near Saint John, N.B. Under the revision, the 5 year rate freeze for residentials would remain in place, but industrials face a smaller rate reduction. The revised deal was reached by the provincial Liberal government after significant criticism that it, like the Upper Churchill contract, gave too much power to Quebec.