ISO New England expects to have total winter reserves of nearly 34 GW

While ISO England (ISO NE) is increasingly dependent on natural gas, the regional grid operator says its winter reliability program will help ensure that there is ample electric power available this winter.

The ISO expects to have total reserves available, including capacity measures, of nearly 34,000 MW. The region was an all-time winter peak of roughly 22,800 MW in 2004.

Because possible natural gas pipeline constraints could limit electricity production from natural gas power plants, ISO New England has implemented a winter reliability program that addresses issues such as back-up fuel sources, ISO NE said in a Dec. 5 news release.

“Reliable power system operations depends on sufficient resources, adequate fuel supplies, and available infrastructure for both fuel and electricity delivery,” said Vamsi Chadalavada, executive vice president and COO of ISO New England. “The region should have adequate supplies of electricity to meet demand, barring any unforeseen resource outages or fuel delivery constraints,” Chadalavada said.

Winter has become a challenging time for New England grid operations, especially during the coldest weeks of the year when the availability of natural gas supplies is uncertain. Approximately 44%—about 14,850 MW—of the total generating capacity in New England uses natural gas as its primary fuel, and natural gas generated 49% of the region’s power in 2015.

A number of coal-fired units and the Entergy (NYSE:ETR) Vermont Yankee nuclear plant have been retired in recent years.

New England’s natural gas infrastructure was not designed to serve demand for natural gas for both heating and power generation, so on cold winter days, New England’s network of pipelines is near or at capacity for commercial and residential heating. Any pipeline capacity remaining after heating customers are served can be sold for power generation. As a result, approximately 3,450 MW of natural-gas-fired generating capacity may be at risk this winter because of pipeline constraints.

This year, the completion of the Algonquin Incremental Market (AIM) Project will increase pipeline capacity into the region by 342,000 dekatherms of gas per day and is expected to ease concerns about pipeline capacity this winter.

However, in coming years, Local Distribution Companies (LDCs)—that sells gas to heating customers—will continue to expand their infrastructure and use this increased capacity. Moreover, the region will lose 1,500 MW of coal- and oil-fired generation this spring that will be replaced primarily by new gas-fired generation, and no additional infrastructure to deliver or store natural gas is currently being developed.

Also, New England has relied on cargoes of liquefied natural gas (LNG) in recent winters, but these LNG tankers follow global market spot prices and may elect to go elsewhere, depending on price. They can also be held up by severe weather in winter.

ISO New England’s winter reliability program provides incentives to gas and oil-fired power plants to procure sufficient fuel before winter begins. The program will run from Dec. 1, 2016 to Feb. 28, 2017, and include an oil inventory component, an LNG component, and a demand response component.

The next non-gas generator to retire will be the 1,500 MW Brayton Point Power Station in Massachusetts that will close at the end of May 2017.

A look at the ISO NE winter outlook by the numbers

Peak demand forecast:

• At normal winter temperatures of about 7 degrees Fahrenheit (F): 21,340 MW;

• If extreme winter weather of 2°F occurs: 22,028 MW;

• Both forecasts take into account the 1,884 MW in energy savings from energy-efficiency measures acquired through the region’s Forward Capacity Market (FCM);

• At normal winter temperatures of about 7 degrees: 21,340 MW;

• If extreme winter weather of 2°F occurs: 22,028 MW;

• Both forecasts take into account the 1,884 MW in energy savings from energy-efficiency measures acquired through the region’s Forward Capacity Market (FCM);

• Resources with an FCM capacity supply obligation to be available: 31,101 MW;

• Total resources, including both FCM obligations and capability without FCM obligations: 33,948 MW.

(A generator’s maximum possible output may be greater than its FCM obligation).

•Total resources, including both FCM obligations and capability without FCM obligations: 33,948 MW

(A generator’s maximum possible output may be greater than its FCM obligation)

• Natural-gas-fired generating capacity at risk of not being able to get fuel when needed: 3,450 MW;

• Winter 2015/2016 peak demand: 19,545 MW on Feb. 14, 2016, for the hour from 6 to 7 p.m.

• All-time winter peak in New England: 22,818 MW on Jan. 15, 2004.

• All-time peak demand: 28,130 MW, on Aug. 2, 2006.

http://finance.yahoo.com/news/iso-england-managing-reliable-power-163800989.html

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.