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ISO-NE working to adjust power markets for energy transition toward renewables


Electrification driving power demand growth

Compensating balancing resources is critical

  • Author
  • Jared Anderson
  • Editor
  • Manish Parashar
  • Commodity
  • Coal Electric Power Energy Transition Natural Gas

ISO New England is preparing for dramatic shifts in its power generation resource mix and markets with the interconnection queue currently comprised of 66% wind power, 21% battery storage, 9% solar and just 3% natural gas, the grid operator said in its 2022 Regional Electricity Outlook.

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"At ISO New England, we recognize that climate change is real and happening now," the grid operator said in its regional electricity outlook titled On the Horizon, released July 5.

Climate change poses an existential threat to our planet and reducing CO2 emissions is critical to combating it, ISO-NE said.

The grid operator expects that over the next three decades, the electric power grid will become largely decarbonized with older fossil-fueled resources retiring and new clean-energy resources coming online, which means economic sectors still powered by fossil fuels will need to electrify and the future grid, fueled primarily by renewable resources, will need to meet significantly increased demand and do so reliably, the report said.

The ISO forecasts that power demand from heating electrification will increase from 68 MW in 2022 to 1,556 MW in 2031 and demand from electrified transport will increase from 38 MW in winter 2022 to 1,535 MW by winter 2031.

"The New England states are moving to reduce carbon emissions from the electric, heating, and transportation sectors, setting aggressive targets to increase renewable energy resources and reduce greenhouse gas emissions to nearly zero by 2050," it said.

For example, five states have aggressive greenhouse gas reduction mandates. Vermont requires a 90% reduction by 2050, Maine requires carbon neutrality by 2045, Connecticut has a zero-carbon electricity requirement by 2040, Rhode Island has mandated 100% renewable electricity by 2030, and Massachusetts has mandated net-zero emissions by 2050.

State renewable portfolio standards are also getting more aggressive over time, according to the report.

The grid operator has identified four key pillars needed to develop and maintain a clean, decarbonized power grid:

  • Significant amounts of clean energy to power the economy with a greener grid
  • Balancing resources that keep electricity supply and demand in equilibrium
  • Energy adequacy -- a dependable energy supply chain and/or a robust energy reserve to manage through extended periods of severe weather or energy supply constraints
  • Robust transmission to integrate renewable resources and move clean electricity to consumers across New England

Changing resource mix

"Eventually, renewables will become the new baseline resource, meeting most consumer demand, with other resources such as energy storage and efficient natural gas generation needed to fill the gaps," the grid operator said.

Several New England states are pushing hard to develop offshore wind projects with wind power currently comprising two-thirds of new proposals in the ISO generator interconnection queue, the report said.

"Stakeholders are currently determining if a consensus can be reached on market approaches to spur the development of clean energy," the report said, adding that it is also necessary for the region's energy stakeholders to consider how balancing resources will be compensated for their reliability value in a future system with significant volumes of renewable energy resources, which is particularly important as older, fuel secure resources seek to retire.

Since 2013, roughly 7,000 MW of power generation capacity have retired or announced plans for retirement in the coming years, the grid operator said. Retiring resources have been predominantly coal, oil and nuclear power resources, with another 5,000 MW of remaining coal and oil at risk of retirement.

"These resources have played an important role in recent winters when natural gas supplies are constrained in New England," the report said.

The grid operator and its stakeholders are working on ways to ensure reliability as the grid transforms toward greater volumes of renewable energy. The Future Grid Reliability Study examines 24 different future grid scenarios to better understand the reliability implications when most electricity in the region comes from weather-dependent resources. Phase one of the study was launched in March 2021, with results expected in summer 2022, the grid operator said.

"Another project, known as Resource Capacity Accreditation, is focused on developing ways to more accurately reflect a generator's contributions to resource adequacy, which will be critical to a reliable and efficient clean energy transition," the report said.

A third project, Day-Ahead Ancillary Services, seeks to ensure the power market provides the services needed for a reliable, next-day power system operating plan with the region's evolving power generation fleet, according to the report.