Pipes, wires, Canada playing growing role in Eastern U.S. markets

During recent years New England has seen its power generation market become much more dependent on natural gas and this is a trend that is also occurring in other areas, speakers said Dec. 2 during the second day of the PennWell TransForum East conference in Washington, D.C.

TransForum East was organized by PennWell’s TransmissionHub news service. Speakers at Day 2 of the event also said that transmission proposals, gas pipeline projects and renewable energy, including hydro power from Canada, are playing a larger role in Eastern markets.

“We lost some oil and coal plants,” in recent years, said ISO New England (ISO NE) Senior Regulatory Counsel Kevin Flynn. The region is also losing some nuclear assets as well.

Flynn also noted that the Salem Harbor coal plant is being replaced by a gas plant at the same location.

Flynn and New England States Committee on Electricity (NESCOE) General Counsel Jason Marshall also noted that New England is also losing its nuclear generation. Entergy (NYSE:ETR) has already retired its Vermont Yankee reactor and has announced plans to retire its Pilgrim nuclear plant by mid-2019.

Flynn said he considers New England to serve as a “canary in the coal mine” for other eastern markets.

 “We need more pipes and more wires in New England,” Flynn said. New England is at the “end of the pipeline system” and lacks adequate underground storage, he said.

New England has significant wind power potential but could use more electric transmission to link renewable energy to load centers. Northern New England has land available for renewable energy but the sites tend to be further from demand centers, Flynn said. Several transmission projects are advancing in New England, Flynn said.

Massachusetts and Connecticut together bear much of New England’s transmission reliability. TransForum East speakers also noted that New England states have aggressive policies to promote renewable energy.

Clean energy RFP underway, Canada hydro drawing attention

Some speakers noted that the Connecticut Department of Energy and Environmental Protection, the Massachusetts Department of Energy Resources, Eversource Energy, National Grid and Unitil have developed a Final Clean Energy RFP in order to identify projects that will advance the clean energy goals of Connecticut, Massachusetts and Rhode Island.

That process could result in contracts being approved by regulators in the fall of 2016. It is important to note that “there isn’t an obligation to actually procure anything” if appropriate projects are not identified, Marshall said.

In addition to renewable energy, New England is also investing heavily in energy efficiency and distributed resources, said NESCOE’s Marshall. Over the last year New England governors have issued statements calling both for increased traditional infrastructure in the region as well as renewable resources.

Various speakers noted that parts of New England are studying imports of hydroelectric power-by-wire from Canada, which has been a source of some controversy in some cases.

Quebec has significant hydroelectric resources with currently 39,000 MW available, said Levitan & Associates Vice President and Principal Seth Parker. There is a long history of New England doing business with Canadian hydroelectric generators, Parker said.

Hydro is a source of generation that can, over the long-term, “help smooth out” the intermittent nature of wind power, Parker said. Parker also ran through a number of Canada-to-New York transmission project proposals.

Eversource Energy Senior Counsel Marvin Bellis updated the gathering on the Northern Pass Transmission Project. The proposed 192-mile, $1.6bn Northern Pass line in Quebec and New Hampshire is a joint project between Eversource and Hydro-Quebec.

Bellis said the transmission project should yield many benefits. In addition to helping bring online more renewable energy, it should also help New England blunt the impact of fossil and nuclear plant retirements as well as winter price spikes associated with natural gas pipeline constraints, Bellis said.

More underground construction was added to the project since it was first proposed. More than 80% of the line is either next of existing lines or underground, Bellis said.

The U.S. Department of Energy (DOE) is preparing to issue a supplemental draft environmental impact statement (EIS) on the project, Bellis said.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.