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New England energy transition could require 71 GW of new clean energy capacity

Highlights

Power market stakeholders developing major 'Future Grid Study'

Adjusting market to allow needed resource participation is key

New York — With the energy transition underway in New England, power market participants are considering transition pathways that could include installing 58 GW-71 GW of generation capacity and 3 GW-10 GW of storage capacity by 2040, along with critical market changes.

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The New England power industry is developing a "Future Grid Study" which is a collaborative effort among regional industry stakeholders, the New England states and ISO New England to further "assess and explore potential reliability and operational issues in light of evolving state energy and environmental policies," according to a New England Power Pool memo describing the effort that was addressed at a July 1 joint meeting of the NEPOOL Markets and Reliability Committees.

Multiple stakeholders gave presentations posted to the ISO-NE website that explain energy transition analysis done to date and identify important focus areas for the Future Grid Study. Press is not permitted to cover NEPOOL meeting by phone or in person.

Existing policy mandates in the New England states require at least an 80% reduction in carbon dioxide emissions below target levels by 2050. The target level is 1990 for all states except Connecticut, which calls for an 80% reduction below 2001 levels, according to a presentation by London Economics International prepared on behalf of utility Eversource.

Current energy consumption is still heavily fossil fuel-reliant, with ISO-NE's 2019 power generation fuel mix consisting of 48% natural gas, 20% oil and 3% coal, requiring major supply mix and grid changes to meet future objectives, according to the presentation.

Net demand will grow over the next 30 years despite significant reductions from energy efficiency and behind-the-meter solar systems due to demand increases from electric vehicles and heat pumps. By 2040, power demand from EVs reaches 18 TWh, or 13% of net load under the 80% by 2050 scenario, the presentation said.

Under all scenarios, significant supply changes will be required to reliably meet emissions reduction targets, the analysts said, including an incremental 58 GW to 71 GW of generation capacity and 3 GW to 10 GW of storage capacity by 2040.

The role of gas will be tricky, with the analysis finding continued operation of "some gas generation" is needed for reliability in all scenarios, but gas-fired generation has to be "limited in order to meet emissions targets."

Additionally, ambitious decarbonization goals will likely require some new form of dispatchable low- emission generation, like long-duration energy storage, renewable natural gas, etc., the presentation said.

Market changes

Other market participants said the Future Grid Study must include focus on power market design changes that will be needed to ensure new technologies are allowed to fairly compete.

As the region becomes more dependent on distributed energy resources, variable renewable energy generation, load reduction and dynamic load shifting, it will be important to "ensure that these and other advanced energy resources are able to fully participate" in the ISO-NE markets, trade group Advanced Energy Economy, said in a July 1 presentation given at the NEPOOL meeting.

Studies have shown that inverter-based resources like wind, solar and batteries can supply a range of grid services, "if incentivized and integrated accordingly," AEE said.

Study inputs should acknowledge technology change rates, which tend to outpace projections, AEE recommended.

For example, in 2000 the US Energy Information Administration projected 12 billion kWh of wind power generation and 1.3 billion kWh of solar output in 2020, while actual 2019 data showed 300 billion kWh of wind and 104 billion kWh of solar power production, AEE said.

Other market participants also focused on power market design changes that might be needed to achieve public policy climate goals.

An Autumn Lane Energy Consulting presentation endorsed by NRG Energy and Sunrun asked: "Will our current market designs support a reliable, low-carbon system? And if not, what should we do about it?"

The analysts suggested that focus be placed on power system characteristics and capabilities taken for granted today that "may be in short supply in a future with a high-renewable resource mix."

Examples include rotating inertia for stability, rapid and frequent ramping capability to adapt to changes in net demand, energy availability in all seasons and seamless ability to integrate distributed resources along with flexible demand, according to the presentation.