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ISO New England: Northeast needs nukes, oil-fired plants for reliability

The head of New England's power grid operator is worried about the lights going out in coming winters following the slated May 2019 shutdown of the Pilgrim Nuclear Power Station if natural gas pipelines are not expanded.

Mild weather and historically low natural gas prices contributed to the lowest wholesale electricity prices in 14 years in the Northeast in 2016, but ISO New England Inc.'s Gordon van Welie warned in a Jan. 30 State of the Grid briefing that the region "can't operate a reliable power system on the hopes that New England's future weather will always be mild." Nor can New England afford to lose its remaining nuclear plants — once Entergy Corp.'s 685-MW Pilgrim plant in Massachusetts is shut down, only NextEra Energy Inc.'s 1,249-MW Seabrook plant in New Hampshire and Dominion Resources Inc.'s approximately 2,101-MW Millstone plant in Connecticut will remain operating — in the absence of new pipelines, said the president and CEO of ISO New England.

"New England imports all of the natural gas it uses for heating and power generation," explained van Welie. "But the infrastructure to deliver or to store the fuel is not expanding fast enough to keep pace with the increasing demand for natural gas. When the pipelines are running full or near full, just to meet heating demands on the coldest days, there's little or no room left for power plants."

"During extreme temperatures, fuel constraints can sideline thousands of megawatts of natural gas generation, aging generators can break down, imports can be cut by neighboring grids dealing with the same weather and oil and energy deliveries can be delayed," van Welie said. "If a few of those problems coincided, the system operator could be forced to use stronger measures to protect the grid [such as] ... asking the public for voluntary conservation or in extreme cases, ordering controlled power outages."

Van Welie credited the ISO's expertise; liquefied natural gas, or LNG; and a dwindling fleet of nuclear, coal and oil-fired power plants for keeping the lights on so far in New England on the coldest days of winter. He said a growing queue of natural gas plants despite a lack of supply capacity and future retirements of aging nongas generators, possibly up to 6,000 MW of capacity, will increase the risk of maintaining the grid's reliability even further. In such circumstances, van Welie said ISO New England would consider entering into reliability agreements with nongas resources to postpone retirements, especially oil-fired units at the expense of ratepayers and clean air.

In addition to threats of blackouts, pipeline constraints send electricity prices spiking. According to van Welie, supply constraints over three months alone during the winter of 2013-2014 cost New England about $5 billion, more than the estimated $4.1 billion for all of 2016.

Expanding natural gas pipeline capacity is an obvious solution to help New England meet its growing energy needs but van Welie said a difficult siting process and "stalled" efforts to implement a regional funding mechanism to pay for pipeline projects has led to the suspension of several pipelines.

The most glaring example of this was the August 2016 decision by Massachusetts' highest court that struck down allowing ratepayer-backed, long-term contracts by electric distribution companies for natural gas capacity. The ruling halted regional plans to fund Spectra Energy Partners LP subsidiary Algonquin Gas Transmission LLC's 925,000-Dth/d Access Northeast pipeline and storage project, which had the backing of Eversource Energy and National Grid plc electric utilities.

While van Welie recommended expanding storage for and contracts by generators for LNG, he cautioned that LNG supplies to New England vary, have to be arranged months in advance and are a premium global commodity with prices that fluctuate.

Van Welie also suggested giving more natural gas plants "dual-fuel capability" to switch to oil on-site when natural gas supplies run scarce, but tightening environmental restrictions limit how often generators can run on oil.

The executive is optimistic about a less-polluting power system someday ensuring reliability but not anytime soon, as backup storage for intermittent renewables "will be needed at a level that won't be economically or technically feasible for many years."

"Connecting wind farms in northern New England or bringing hydro energy from Canada will require extensive transmission expansion which will be costly and take years to build," he added. "Offshore wind projects will likely require less transmission but are typically more costly and will also take years to build."