The New York Independent System Operator said Nov. 9 it expects to have a total of 42,415 MW of power resources available to meet its forecast peak winter demand of 24,025 MW, and operations staff continue monitoring regional fuel supplies which could be limited.
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"Recognizing the unique challenges that can accompany the upcoming winter season, NYISO operations staff has taken additional precautions and conducted extensive additional outreach to generators to maintain reliable bulk system operations for all New Yorkers," Rich Dewey, NYISO president and CEO, said in an emailed statement.
"Despite the recent increase in commodity fuel prices, our markets will continue to help us meet this winter's demand reliably at the least cost possible," Dewey said.
Transco Zone 6 forward natural gas prices increased significantly during October trading, with November averaging $5.37/MMBtu, a 114% increase from October 2020, and January 2022 averaging $12.12/MMBtu compared with $6.53/MMBtu a year ago, according to Platts M2MS data.
However, New England winter forward gas prices at Algonquin city-gates are down nearly 20% from an early October high, tracking a dip in global LNG prices and easing concern over seasonal demand in New England's gas market.
The NYISO system remains heavily reliant on gas-fired and dual-fuel generators and power prices can fluctuate based on the price movements of these commodities.
"We are paying attention to the fuel supply in the northeast and inventories seem to be lower than in the past and clearing prices seem to be higher for this time in November," Wes Yeomans, NYISO's vice president of operations, said during a conference call with reporters.
Yeomans said gas prices at major New York hubs have decreased by about 3% this week and that gas pricing patterns are likely following the trends observed in the New England market.
The US Energy Information Administration indicates oil inventories both regionally and throughout the United States are below historical values, according to the statement.
NYISO's winter peak power demand forecast of 24,025 MW represents an increase of 1,483 MW over last winter's peak of 22,542 MW which occurred on Dec. 16, 2020, but is 0.7% below the 10-year average winter peak of 24,203 MW, the NYISO said.
The NYISO's extreme winter weather scenario shows that peak demand could increase to as much as 26,230 MW.
Assuming all firm and non-firm fuel generation is available under normal winter weather conditions, the grid operator expects the power system to have a 9,080 MW capacity margin, or volume of capacity above anticipated peak demand.
Under extreme weather conditions the system is expected to have a 7,916 MW capacity margin, and if the region experiences once-in-a-century cold weather, the capacity margin could decrease to 6,875 MW, according to the NYISO.
Assuming only firmly contracted fuel is available, the NYISO expects to have a 2,370-MW reserve margin under normal weather and a 1,566-MW capacity margin under extreme weather.
Yeomans said the NYISO learned from recent weather-related power outages in the Electric Reliability Council of Texas and Southwest Power Pool markets where operators needed customers to shed load, which resulted in some important circuits to gas production and distribution facilities being shut. Those actions further reduced gas supplies, which exacerbated outages along with power and gas price spikes.
The NYISO has asked generators which electrical circuits are critical for their facilities and then followed up with local utilities regarding the importance of leaving those circuits open, Yeomans said.
Winter reliability will get increasingly important over the next 20 years as the NYISO transitions from a summer peaking system tied to electric cooling demand to a winter peaking system where power demand is driven more by electrification, heat pumps and electric vehicle charging.
NYISO power demand forecasts indicate the system will switch over to having a winter demand peak around 2039 or 2040, Dewey said.