Federal electricity regulators have given New England's regional grid operator more time to develop proposed new mechanisms to enhance long-term fuel security, after states and market participants asked for an extension to allow continued stakeholder discussions. At stake are what could be significant reforms to the region's electricity markets, including new opportunities for generators to earn revenue for providing fuel security, as well as the prospect of significant new costs for consumers.
ISO New England Inc. is the regional transmission organization and independent system operator for the electric grid serving nearly all of New England. In this role, it develops and administers markets for electric energy, capacity, and other products. ISO-NE also engages in regional system planning, and manages proposals to retire or close power plants that provide capacity to the region.
In 2018, the owner of the Mystic Generating Station, the largest power station in Massachusetts by nameplate capacity, proposed to retire its units in 2022. But after a study of the remaining electric system, ISO-NE determined that the retirement of Mystic's units 8 and 9 would present "unacceptable fuel security risks" that could lead to rolling blackouts as soon as the winters of 2022 through 2024. In response, ISO-NE asked the Federal Energy Regulatory Commission for waivers to allow the grid operator to retain the Mystic units to meet fuel security needs.
Some stakeholders disagreed that the Mystic units' retirement posed a reliability risk; others argued the costs of retaining them would outweigh any benefits. While the Commission denied ISO-NE's waiver request, it ultimately approved a short-term cost-of-service agreement under which regional ratepayers will pay to keep the Mystic units online. But the Commission also made a preliminary finding that ISO-NE's tariff may be unjust and unreasonable, and directed ISO-NE to file proposed tariff revisions creating a long-term fuel security mechanism by July 1, 2019. At the grid operator's request, the Commission later extended that deadline to November 15, 2019, to allow more time for proposal development and stakeholder discussion.
In the meantime, this spring ISO-NE filed a proposed short-term "inventoried energy program" from December 1
through the end of February during winters 2023/2024 and 2024/2025 as "a
bridge to a long-term, market-based solution that more comprehensively
addresses the region’s energy security risks" -- but Commission staff identified that filing as "deficient" and requested additional information, which prompted ISO-NE to provide additional information. In the absence of a Commission quorum willing to vote, those revisions became effective by operation of law on August 6, 2019, although parties have sought rehearing regarding the Commission's failure to act.
But even more time may be necessary. On July 31, 2019, the New England States Committee on Electricity (NESCOE) filed a motion requesting an additional six-month extension of time to allow ISO-NE and the region to work through issues related to ISO-NE’s proposed long-term fuel security mechanism. Representing the governors of the six New England states, NESCOE said granting its request would "enable a more complete
and holistic filing in response to the directives in the July 2018
Order, allow ISO-NE to address core consumer protection elements that
are fundamental to state support, and remove barriers to achieving a
greater degree of regional coalescence around a proposal." Several commenters supported the motion.
Ultimately, the Commission granted an extension of time up to and including April 15, 2020 for ISO-NE to file its long-term fuel security mechanism. While New England will soon be forced to address the issue of fuel security for its electric generating portfolio, these short-term and long-term market changes proposed by the grid operator are on hold for now.
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Showing posts with label inventory. Show all posts
Showing posts with label inventory. Show all posts
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.”
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.”
Propane inventory in US sets new record
Thursday, September 24, 2015
As the U.S. prepares for another winter, government records show stockpiles of propane have reached record levels. What's in store for propane markets?
Propane is a hydrocarbon gas liquid used mostly for space heating and as a feedstock for other chemicals like ethylene and propylene, as well as for drying agricultural crops. Natural gas processing plants and petroleum refineries are the two largest sources of propane.
The U.S. Energy Information Administration has collected weekly propane inventory data for 22 years. According to its most recent report, U.S. inventories of propane and propylene reached 97.7 million barrels as of September 11. EIA describes this as the highest level of propane inventory on record.
What explains the buildup of propane in storage? Record high propane inventories are partly due to seasonal dynamics in supply and demand. Demand for propane for heating and agricultural uses is highly seasonal, while demand for propane as a chemical feedstock lacks strong seasonality. Over recent years, propane and propylene stocks are typically drawn down during the winter heating and agricultural drying season (October to March), and then rebuild from early April through September.
This year, EIA data shows inventories began increasing in mid-February. EIA notes that domestic consumption is relatively flat, but found increases in propane production. In particular, EIA's latest data shows that natural gas processing plants are producing a greater share of propane than in previous years (rising from 62% in 2008 to 76% in 2014), while propane production at refineries has remained relatively constant.
Propane is a hydrocarbon gas liquid used mostly for space heating and as a feedstock for other chemicals like ethylene and propylene, as well as for drying agricultural crops. Natural gas processing plants and petroleum refineries are the two largest sources of propane.
The U.S. Energy Information Administration has collected weekly propane inventory data for 22 years. According to its most recent report, U.S. inventories of propane and propylene reached 97.7 million barrels as of September 11. EIA describes this as the highest level of propane inventory on record.
What explains the buildup of propane in storage? Record high propane inventories are partly due to seasonal dynamics in supply and demand. Demand for propane for heating and agricultural uses is highly seasonal, while demand for propane as a chemical feedstock lacks strong seasonality. Over recent years, propane and propylene stocks are typically drawn down during the winter heating and agricultural drying season (October to March), and then rebuild from early April through September.
This year, EIA data shows inventories began increasing in mid-February. EIA notes that domestic consumption is relatively flat, but found increases in propane production. In particular, EIA's latest data shows that natural gas processing plants are producing a greater share of propane than in previous years (rising from 62% in 2008 to 76% in 2014), while propane production at refineries has remained relatively constant.
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