NESCOE requests first ISO-NE LTTP RFP

In a move that could unlock significant new energy supplies for New England, a committee representing the six states has asked the region's electric grid operator to use a new process to solicit transmission capable of accommodating large amounts of new generation plants interconnected to the Maine grid.

The New England States Committee on Electricity (NESCOE) is a not-for-profit entity recognized by the Federal Energy Regulatory Commission (FERC) as a regional state committee. NESCOE represents the collective perspective of the six New England states in regional electricity matters. The organization typically focuses on two areas: resource adequacy and system planning and expansion.

For several years, NESCOE has been engaged with regional grid operator ISO New England to reform the region's longer-term transmission planning (LTTP) process. In an initial phase, in 2022 FERC approved a new process through which NESCOE may ask ISO-NE to perform system planning analyses that may extend beyond its usual 10-year planning horizon and that identify, at a high-level, transmission infrastructure necessary to meet a New England state’s energy policy, mandate, or legal requirement.

Meanwhile ISO and stakeholders continued to develop a second phase of reforms, which FERC accepted in July 2024. The second phase's reforms included a new "scenario-based" LTTP process. The second phase of LTTP reforms also creates a process to advance identified transmission upgrades into developable projects. It also includes a cost-allocation mechanism for those transmission improvements

On December 13, 2024, NESCOE submitted a request to ISO-NE, asking the grid operator to issue its first regional solution under this new LTTP process. NESCOE identified the following minimum scope for the first LTTP RFP:

 (1) a requirement to increase the Maine-New Hampshire interface capacity to at least 3,000 MW by 2035 and increase the Surowiec-South interface capacity to at least 3,200 MW by 2035; and

(2) a requirement to develop new infrastructure (e.g., substation) at Pittsfield, Maine that can accommodate the interconnection of at least 1,200 MW (nameplate) of onshore wind. Pittsfield should be used as the presumed location based on previous analysis, however, bidders may propose alternate locations which, based on their own expertise, bidders conclude would be more efficient and cost-effective.

(3) The required in-service date for both scope components is by 2035 unless a bidder can demonstrate supply chain issues that warrant a later in-service date. A strong preference should be given to bids with an in-service date by 2035, or as close as possible thereto recognizing supply chain constraint information bidders provide.

According to NESCOE, this scope includes "two equally important requirements that, when taken together, should result in improvements to the transmission system that will benefit consumers." 

Record-low inflation-adjusted natural gas prices, says EIA

For the tenth time this year, natural gas at the U.S. benchmark "Henry Hub" pricing point has reached an all-time low in inflation-adjusted dollars, according to the federal Energy Information Administration.

Image source: U.S. Energy Information Administration

According to U.S. EIA, natural gas at the Henry Hub has recently reached all-time low pricing on an inflation-adjusted basis. EIA says gas at Henry Hub was priced at $1.21 per million British thermal units (MMBtu) twice last month, on November 8 and November 11, 2024. EIA called this pricing "an all-time low in inflation-adjusted dollars." 

These record low prices were just the latest in a series, as two earlier days in November had already seen record low inflation-adjusted prices for gas at the Henry Hub. Six more record-low inflation-adjusted prices occurred earlier in 2024, according to the energy agency.

EIA attributes the record-low prices to factors including robust supply and constraints on demand. EIA also notes that natural gas prices can be volatile, as "Henry Hub spot prices spiked to over $13/MMBtu in January due to well-below-normal temperatures across most of the United States."

Corporate nuclear power offers solicited

Tech company Meta Platforms Inc. has issued a request for proposals "to identify nuclear energy developers to help us meet our AI innovation and sustainability objectives — targeting 1-4 gigawatts (GW) of new nuclear generation capacity in the U.S."

In a statement on its sustainability blog, Meta expressed its views that nuclear power would help the company meet its objectives relating to both artificial intelligence and sustainability:

... we believe that nuclear energy can help provide firm, baseload power to support the growth needs of the electric grids that power both our data centers (the physical infrastructure on which Meta’s platforms operate) as well as the communities around them. ... At Meta, we believe nuclear energy will play a pivotal role in the transition to a cleaner, more reliable, and diversified electric grid.

Citing its experience helping the renewable energy industry develop, Meta says it is taking a similar approach to nuclear power: 

When we began engaging with the renewable energy industry more than a decade ago, the industry was scaling. Our early engagement with developers of renewable energy allowed Meta to design contracts that enable both Meta and our developer partners to achieve our respective goals. We want to work creatively with developers to structure an agreement that will similarly enable development of nuclear technology.

At the same time, Meta notes that nuclear power's needs are somewhat different from those of renewable projects, due to key technological, economic, and regulatory differences: 

Compared to renewable energy projects that we continue to invest in, such as solar and wind, nuclear energy projects are more capital intensive, take longer to develop, are subject to more regulatory requirements, and have a longer expected operational life. These differences mean we need to engage nuclear energy projects earlier in their development lifecycle and consider their operational requirements when designing a contract. And, as scaling deployments of nuclear technology offers the best chance of rapidly reducing cost, engaging with a partner across projects and locations will allow us to ensure that we can deploy strategically. An RFP process will allow us to approach these projects thoroughly and thoughtfully with these considerations in mind.

Meta's RFP is not directly available to the public. Instead, Meta's blog directs interested parties to complete a qualification intake form by January 3, 2025, with initial RFP proposals due on February 7. Meta says it will screen interested parties for their qualifications, including "developers with strong community engagement, development, and permitting, and execution expertise that have development opportunities for new nuclear energy resources – either Small Modular Reactors (SMR) or larger nuclear reactors." Meta says it will also require interested parties to execute a non-disclosure agreement before receiving Meta's Nuclear RFP.

Other tech companies are similarly pursuing nuclear energy projects to power datacenters, as are some utilities. Nuclear power is drawing renewed interest from other sectors too, like the military and even industrial manufacturers.

New England passes its 100th duck curve day of 2024

For the 100th time this year, demand for electricity from New England's power grid was lower at midday than overnight, a sign of significant growth in behind-the-meter solar photovoltaic power in recent years. Until 2018, this phenomenon -- called the "duck curve" due to the shape of graphs of demand -- had never occurred. But according to the region's grid operator, duck curve days will likely continue to recur.

ISO New England says that April 21, 2018 was the first day when "New Englanders used less grid electricity midday than while they were sleeping". Nearly two years later, by the spring of 2020, the duck curve phenomenon had appeared on seven days. By the end of 2021, it had occurred a total of 35 times.

The duck curve phenomenon has since gone from rare to common. The grid operator says there were "45 times in 2022 when demand for grid electricity was lowest during the day instead of at night." In 2023, New England experienced 73 duck curve days. Last year the region also set a new low for midday demand, thanks to mild temperatures, a holiday, and continued growth of behind-the-meter solar.

The duck curve trend has continued to spread. According to ISO-NE, "the region recorded its 100th 'duck curve' day of 2024 on Monday, November 25."

Graph from ISO-NE. Available at 100th ‘duck curve’ day marks New England solar power milestone - ISO Newswire

So far this year, the New England grid has also set a new record low for midday demand. 

The grid operator notes:

Duck curve days are becoming more frequent as more New England homeowners and businesses install solar power systems. But duck curves are not disruptive from a grid operations perspective. Staff in the ISO’s control room keep the entire system in balance by instructing the region’s other energy resources to decrease production when BTM PV output is high, and to increase production when BTM PV output is low. 

At the same time, this level of solar penetration requires flexibility from "the region's other energy resources", which must be technically capable of ramping up and down to follow load, as well as economically capable of sustaining commercial operations.

Small modular reactors and Maine's nuclear referendum law

Tech companies, datacenters, and industrial consumers are pursuing the development of small modular nuclear reactors (SMR), capable of producing stable amounts of carbon-free power at a distributed scale. 

Much smaller than a typical commercial or utility-scale nuclear power plant, SMRs are typically envisioned as varying in size from tens of megawatts up to hundreds of megawatts, with potential uses including power generation, process heat, desalination, or other industrial uses.

Utilities, tech companies and some other corporate energy consumers have signed deals or announced plans to pursue SMR development. In 2023, GE Hitachi Nuclear Energy announced that it had signed a contract with Ontario Power Generation and others to deploy a BWRX-300 SMR at the Darlington New Nuclear Project site. GE's press release called the Darlington deal "the first commercial contract for a grid-scale SMR in North America." 

That same year, materials science manufacturer Dow announced a joint development agreement with X-Energy Reactor Company, LLC "to demonstrate the first grid-scale advanced nuclear reactor for an industrial site in North America." The Dow project involves the installation of an Xe-100 SMR at one of Dow’s U.S. Gulf Coast sites, using funding from sources including the Department of Energy's Advanced Reactor Demonstration Program. 

Federal support for SMR development is both longstanding and bipartisan. The Department of Energy cites an unbroken heritage of support for SMRs since the late 1990s. Both President Obama and President Trump issued executive orders promoting the design and development of small modular nuclear reactors. Under the Biden administration, the U.S. Department of Energy has described advanced SMRs as "a key part of the Department’s goal to develop safe, clean, and affordable nuclear power options." Last month, the Energy Department offered up to $900 million in funding to support the initial domestic deployment of Generation III+ (Gen III+) SMR technologies.

Corporate interest in SMRs has continued, and maybe even grown. In October 2024, Dominion Energy Virginia announced that it had entered into a memorandum of understanding with Amazon "to explore innovative new development structures that would help advance potential Small Modular Reactor (SMR) nuclear development in Virginia." With federal energy regulators recently rejecting a separate plan to co-locate an Amazon data center behind-the-meter at the utility-scale Susquehanna nuclear plant, corporate buyer pressure may soon place an increased emphasis on developing new SMRs at datacenter sites, rather than siting datacenters at existing nuclear plants.

Might small modular reactors come to Maine? Maine's history with nuclear energy involves the now-decommissioned Maine Yankee plant, the continued storage of its spent nuclear fuel and radioactive reactor components, and public perceptions of nuclear power. As a result of this history, any Maine SMR project faces challenges including a law which requires approval by the state's voters through a statewide referendum before any nuclear reactor may be constructed. 

A law enacted in 1987 provides for "citizen participation in any decision to construct a nuclear power plant within the State." Now codified as Chapter 43 of Title 35-A of the Maine Revised Statutes, this law requires a statewide referendum asking voters to accept or reject construction of any proposed plant, through balloting on the following question: "Do you approve construction of the nuclear power plant proposed for (insert locations)?"

As interest in SMRs continues to grow, expect Maine to consider its 1987 nuclear referendum law, and whether change is appropriate to enable small modular nuclear reactor development in Maine.

New England natural gas market dynamics affected by constraints and changing supply mix

Natural gas market dynamics vary across the U.S., according to the U.S. Energy Information Administration, with a key pricing hub in the Northeast showing both high prices and high price volatility due to constrained infrastructure and a changing supply mix.

According to EIA, natural gas is traded at about 200 pricing hubs across North America, with prices varying widely based on factors including location, weather conditions, proximity to supply, pipeline constraints and bottlenecks.

EIA produced the graphic below, showing the range of natural gas spot prices at seven key pricing hubs for the first nine months of 2024. It shows that the Algonquin Citygate pricing hub experienced the highest average price over this time period, as well as the highest spot price and the largest price volatility (or range of prices).

Chart source: U.S. Energy Information Administration

According to EIA: 

Algonquin Citygate is an important pricing hub in the northeastern United States, and prices at this hub reflect natural gas market dynamics in Boston, Massachusetts, and elsewhere in New England. New England relies heavily on natural gas for heating in the winter months, but supplies are constrained by the region’s limited natural gas pipeline capacity and changing fuel mix. Price volatility at Algonquin Citygate is typically related to these periods of peak demand.

As EIA notes, natural gas pipeline constraints contribute to high prices and price volatility in New England, particularly during the winter heating season.

Maine PUC awards biomass power contract

Maine utility regulators have voted to award a long-term contract to a biomass-fueled power plant proposed for development in northern Maine.

In 2022, the Maine legislature enacted a law directing the Public Utilities Commission to establish a wood-fired combined heat and power program. The law creates an opportunity for qualifying projects to compete for long-term contracts to sell electricity or renewable energy certificates to Maine's investor-owned transmission and distribution utilities. In 2023, the PUC solicited proposals, but the PUC ultimately found that none of the proposals submitted were eligible for contracting under the 2022 law.

In 2023, the legislature amended the procurement law to broaden program eligibility including with respect to size, net generating capacity, and location. The PUC issued a revised request for proposals under the amended law. 

Now, the PUC has selected a proposal by Ashland CHP LLC to sell the electricity generated by a new biomass-fueled facility to the local utility. According to the PUC, the facility would include about 17.75 megawatts of biomass power, with 15 megawatts of electricity offered into the program, and the remaining power used for heating.

In deliberations, Maine PUC commissioners encouraged the purchasing utility to "secure offtake for the project" and to "maximize the value of the energy from this project". Maine restructured its investor-owned utilities 25 years ago, to separate wires-owning utilities from deregulated generation and competitive retail supply. The restructured utility environment means that the utility has no natural need for power, so the utility typically resells its entitlements under power purchase agreements to other buyers.