COMMODITIES 2026: Departing ISO-NE chief says gas power still needed

ISO New England will need to maintain all of its gas-fired generation resources over the next decade, according to the grid operator's departing CEO, Gordon van Welie, who warned of increased demand and a lack of new supply in the region.

"It's going to be all of the natural gas generation that is currently in operation in this region because most of it is relatively new and then complemented by some ongoing oil-fired peaking resources," van Welie said in a recent interview. "Every study we do shows that in a pattern of demand growth, even if lots of renewables are coming in, you're going to need what I termed the balancing resources, and the balancing resources include the gas fleet."

Van Welie said in June that he would retire from ISO New England as of Jan. 1. He joined ISO-NE as COO in 2000 and was named CEO in 2001. The ISO-NE board has selected current COO Vamsi Chadalavada to succeed van Welie.

Gas generation accounted for 59,833 GWh, or 55% of the region's generation in 2024, according to ISO-NE data on its resource mix. The grid operator has faced criticism from Democratic lawmakers, who argue that its market rules favor preserving gas-fired generation as many New England states seek to decarbonize their power systems.

"If you want to do this energy transition, obviously you need renewables to bring the carbon-free energy, you need transmission, you are going to need some stored energy in the system somewhere, and you are going need resources that can quickly convert energy on call under dispatch into balancing energy," van Welie told Platts, part of S&P Global Energy. "That's just physically what's required. The thing is that the market has to pay for that in some way."

The grid operator has expressed reliability concerns as electrification-fueled demand growth is expected to push the system's winter peak by 2034 to levels typically seen in the summer. Annual electric energy usage in New England will grow from 117,262 GWh in 2025 to 130,665 GWh in 2034, according to ISO New England's 2025 regional system plan.

"At the moment we are in an OK position in that there's enough supply to meet the demand, but not with a huge margin," van Welie said. "We think we could stay in that position for several more years. The question is, what happens beyond that."

Small modular reactors

One form of dispatchable generation to meet the region's growing demand could be small modular reactors, although van Welie raised concerns about the potential cost of the nuclear technology.

"SMRs are a very promising technology, and then the reason I have a caveat at the moment is that what's not clear to me is what the price of the SMR energy is going to be," van Welie said.

In September, ISO New England released a report showing that New England could achieve 85% of its emissions reduction goals by 2045 through a build-out of solar, land-based wind and short-duration battery energy storage.

Including SMRs and long-duration battery storage reduces total necessary capacity from 96 GW to 80 GW, according to the report. Without the deployment of SMRs, the modeling requires a large-scale build-out of offshore wind and battery storage to decarbonize during winter months.

In May, Ontario Power Generation Inc. started construction on the first of four SMRs at the Darlington nuclear plant in Ontario. The first 300-MW reactor is expected to be in place by 2030 and connected to the grid, with the remaining three reactors, each also 300 MW, in place by 2035. The cost to construct all four SMRs is C$20.9 billion, including interest, escalation and contingency.

"That will be clean dispatchable energy, but is it going to be economic? Are people going to be willing to pay those prices?" van Welie said.

With the future of offshore wind in the region in flux, van Welie said there could be an opportunity to explore SMR development in New England as states scramble for alternative sources of clean energy.

Largest gas-fired power plants in ISO New England

"Where's the next round of clean energy coming from? It could be a resurgence of offshore wind with some land-based wind," van Welie said. "It could also be SMRs. If SMRs are cost-competitive with offshore wind by the mid-2030s, then New England has got another option. There are lots of sites in New England where we have decommissioned prior generation nuclear facilities; those are logical places to put SMRs."

The only operating nuclear plants in New England are Dominion Energy Inc.'s two-unit Millstone plant in Connecticut and NextEra Energy Inc.'s Seabrook plant in New Hampshire. According to ISO-NE data, nuclear provided 24% of the region's generation in 2024. The Pilgrim Nuclear Power Station, southeast of Boston, was shut down in 2019, and the Vermont Yankee Nuclear Power Station, in the southeastern part of Vermont, was retired in 2014.

Canadian energy trade

New England is expected to see a large injection of new supply in the coming months as the New England Clean Energy Connect high-voltage, direct-current transmission project in November received its final permit, clearing the way for 1,200 MW of baseload hydroelectric power to come from Quebec to New England.

The project has had a contentious history, as it was rejected by Maine voters in a 2021 ballot initiative. A 2023 court ruling said project developer Avangrid had a constitutional right to build the transmission line.

Van Welie said the project will "lock in" a certain amount of Canadian energy imported into New England. However, there has been a change in discretionary energy exports from Quebec to New England, he added.

"We have already seen a change in the behavior pattern in the last two to three years because the economics have shifted for Quebec," van Welie said. "You will have NECEC, which is a contractual obligation, and then you will have whatever energy they flow over the other ties, and that's going to be a function of what makes economic sense for them."

Drought conditions over the past several years have also impacted Canadian hydropower exports to the region, according to van Welie.

While some Canadian energy exports to the US did become a flashpoint during tariff disputes between the two countries earlier in 2025, van Welie said he has not seen any worry or calls for change from the US federal government over the region's reliance on Canadian energy imports. Net imports accounted for 9% of the region's net energy load in 2024, according to the grid operator.

"We've seen no sign of any federal concern over this," van Welie said. "There was a conversation in the early days of this year, but since then it has been quiet."