New England eyes possible winter power shortfall
New England's governors and electric grid operator are working to fill a potential fuel and power generation shortage ahead of the coming winter.
Natural gas is the greatest source of electricity generation across the six New England states, representing nearly half of the region's electric load. Extremely cold weather in January sent temperatures in Boston, Massachusetts, as low as -2°F (-19°C), caused gas-fired generating units in the region to go without crucial fuel deliveries, and pushed Algonquin Gas Transmission Citygates soaring above $83/mmBtu, an all-time high. After the cold snap subsided, electric grid operator ISO-New England named fuel security as its top challenge for 2018.
This month a coalition of New England's governors announced it would commit to making energy costs in the region more affordable, working this fall to develop a mechanism for engaging end-users in conservation efforts during cold snaps. But the coalition said it is essential that ISO-New England "accurately define the nature and extent of the problem," demonstrating what existing state energy policies may be leveraged to reduce or eliminate system constraints.
ISO-New England said it is "working on all fronts" to address the risks that insufficient fuel could pose to power system reliability during winter. The grid operator has added a new reporting framework to its procedures for energy emergencies, designed to alert the region when a fuel shortage is expected to result in scarcity conditions. It will also pursue energy assessments that cover the availability of fuel and emissions limits, as well as anticipated fuel infrastructure availability and supplies.
The grid operator received yet another setback this year when Exelon Generation announced that by 2022 it would retire its LNG-fueled Mystic Station generating units in Boston, and the LNG facility that supplies them. The station's retirement would pose an unacceptable fuel security risk for the grid. FERC last month accepted a proposal for ISO-New England to subsidize the units in order to keep them running, but the ISO will have to file interim tariff provisions late this month and develop long-term market rule changes by July 2019.
Power generation sources in the ISO have been dwindling in recent years. Entergy's 620MW Vermont Yankee nuclear plant closed in 2014 and Dynegy's 1,464MW Brayton Point coal-fired power station in Somerset, Massachusetts, shut in May 2017. The 685MW Pilgrim nuclear station in Plymouth, Massachusetts, is scheduled to close in May 2019. Some 4,200MW of coal, oil and nuclear capacity are shutting down in the region between 2012 and 2020.
Spot prices at Algonquin Citygates averaged $7.70/mmBtu in winter 2016-17, more than double its average for winter 2015-16. The citygates' all-time high of $83.51/mmBtu reached on 4 January was 11pc higher than its prior record high set on 22 January 2014.
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