NYISO: Technology, economic forces, public policy shaping more dynamic grid

The New York ISO (NYISO) on May 3 said that it has released its annual report, “Power Trends 2018,” which noted that while demand on the grid may no longer be growing at historical levels, planning and operating the grid has grown more complex.

Technology, economic forces, and public policy are shaping a more dynamic grid, the NYISO said in the report, adding: “We are moving away from historical patterns of supply and demand, and towards emerging trends that reflect advances in how electricity is generated and consumed. Public policies are expediting this transformation.”

That means that historical and predictable demand patterns that characterized infrastructure planning over much of the last century are shifting, the NYISO said. Consumers are becoming active participants on the grid – that is, adjusting their energy use patterns to reflect grid conditions, and tailoring their energy use to meet their own needs for reliability and clean power, the NYISO said.

The NYISO noted that in collaboration with policymakers and market participants, it will continue to leverage its expertise in operating the state’s power grid, advanced energy market design, as well as open and transparent system planning, in order to respond to consumers’ energy needs.

Shifting patterns of electricity demand serve to influence how investors, policymakers, and consumers view electricity production, transmission, and consumption, the NYISO said, adding that those patterns include:

  • Energy efficiency and distributed energy resources that shape energy usage
  • Infrastructure replacement and expansion to address risks to aging facilities, support of public policy goals, and meet the needs of a more dynamic grid
  • Economic influences led by low natural gas prices and changing consumption forecasts
  • Public policies aimed at reducing emissions and expanding the use of renewable power resources
  • Bolstering grid resilience through effective federal, state, and local reliability rules, effective grid operations and planning, as well as effective market design

Noting that such distributed energy resources as rooftop solar are transforming historical patterns of consumption, the NYISO said that energy usage from New York’s bulk power system is expected to decline over the next decade at a rate of 0.14% per year. Peak demand is projected to decline at a pace of 0.13% per year through 2028, the NYISO said.

Also, energy efficiency is expected to reduce peak demand on New York’s bulk power system by 245 MW in 2018, and by 2,262 MW in 2028, the NYISO said. The combined effects of energy efficiency and distributed energy resources are expected to reduce demand from the bulk power system by almost 3,700 MW by 2028, as consumers install onsite systems to meet some portion of their electricity needs, the NYISO noted.

Discussing the expansion and contraction of generating supply, the NYISO noted that generation additions have primarily been natural gas-fueled or wind-powered. Since 2000, almost 12,000 MW of new generating capacity came online in the state, representing about 30% of New York’s current generation capacity, the NYISO said, adding that nearly 80% of that new generation has been developed in southern and eastern New York, where power demand is greatest.

Of public policy’s influence on the grid of the future, the NYISO noted that the challenge for it will be examine its market structures to develop incentives for investment in, and maintenance of, the types of resources needed to sustain reliability. The addition of renewable resources expected from the Clean Energy Standard (CES), for example, will create a more dynamic grid where supply is heavily influenced by weather, which necessitates a look at what types of incentives for flexible resources are needed to balance intermittent renewables, the NYISO said.

The NYISO noted that it will also look at market designs that preserve revenue adequacy for generators that are necessary for reliability.

According to the report, the New York State Public Service Commission in August 2016 adopted the CES, requiring that 50% of the energy consumed in the state be generated from renewable resources by 2030. In order to achieve that goal, the commission determined that about 70,500 GWh of total renewable energy will need to be generated by 2030 — including about 29,200 GWh of new renewable energy production in addition to existing levels of production at the time the order was adopted, the NYISO said. The New York State Energy Research and Development Authority will continue to offer long-term (20-year) contracts for renewable energy credits associated with eligible renewable resources, and administer the procurement of zero-emissions credits associated with the generation from eligible nuclear plants, the NYISO noted.

Among other things, the NYISO noted that in “Power Trends 2017,” it introduced the concept of the state’s “Tale of Two Grids,” a reference to the fact that the characteristics of the energy sector upstate – NYISO load zones A-E – differ from those of the downstate – zones F-K – sector.

Zero-emitting resources accounted for about 88% of the energy produced in load zones A-E last year, while downstate – which consumes about 66% of the energy in the state – received 70% of its energy from fossil fuel-fired generation in 2017, the NYISO said.

Noting that transmission constraints on the grid limit the ability to supply more clean energy to downstate consumers, the NYISO said that it is working with policymakers and stakeholders to address those challenges. For instance, the NYISO noted that last October, its Board of Directors selected a proposal from NextEra Energy Transmission New York to address the public policy need for new transmission in western New York. That decision represents the first selection of a transmission project by the NYISO using the Public Policy Transmission Planning Process approved by FERC under FERC Order No. 1000, the NYISO said.

If transmission constraints are not alleviated, the “Tale of Two Grids” will unfold into a “Tale of Two Markets,” where there are growing disparities in bulk power costs and system investment needs in different regions of the state, the NYISO said. Working with stakeholders, the NYISO said that it intends to evaluate opportunities to leverage competitive wholesale market products and services to address those issues and bolster the resiliency of the state’s bulk power system.

About Corina Rivera-Linares 3235 Articles
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 15 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines. She can be reached at clinares@endeavorb2b.com.