Coal, oil stage comeback

The two dirty fuels, normally a minor part of the region’s energy mix, are playing a much bigger role during the cold snap

Nearly written off as dinosaurs heading toward extinction, New England’s struggling coal and oil power plants have staged a temporary comeback during the recent cold snap.

Data compiled by New England’s power grid operator indicate plants running on coal and oil have been producing between 14 and 21 percent of the region’s electricity over the last few days. (For the latest breakdown, click here.) During all of 2012, coal accounted for 3 percent of the region’s power output and oil just 1 percent. The recent shift to coal and oil sharply increases carbon emissions, but it keeps the lights on.  

The temporary turnabout for coal and oil reflects a dynamic in regional energy markets first identified last winter. When cold envelops the region, homeowners and businesses turn up their thermostats and the use of natural gas skyrockets. As more natural gas is diverted to heating, power plants that generate electricity using natural gas find themselves scrambling for supplies. Last winter, six natural gas plants ran out of fuel and couldn’t obtain any more

Officials at ISO-New England, the region’s power grid operator, say last winter’s problems are due to the area’s heavy reliance on natural gas to generate electricity and the limited capacity of natural gas pipelines coming into the region. The officials say the long-term solution is to expand pipeline capacity. But that won’t happen overnight, so in the meantime the officials are addressing the problem on a short-term basis by relying more on coal and oil and importing natural gas (primarily from stocks of liquefied natural gas) from Canada.

According to the ISO website as of this morning, 14 percent of today’s power generation was coming from coal and 6 percent from oil. The numbers were similar earlier this week. What’s happening is the intense cold and high demand for natural gas is driving up the price of natural gas, allowing coal and oil, which are typically more expensive, to gain access to the market. But the heavier use of oil-generated electricity also reflects careful planning this year.

Last winter, a number of the region’s oil plants were unable to operate at capacity because they didn’t have enough oil on hand. The reason they didn’t have sufficient oil on site was because the plants rarely ran and the owners didn’t want to spend a lot of money on oil that would just be sitting in their storage tanks. When electricity from the plants was needed, the plants couldn’t provide it.

ISO officials responded by making full storage tanks financially attractive. They placed orders for 2 million megawatt hours of electricity this winter from plants that either burn oil or could convert to burning oil within five hours. The $75 million electricity purchase guaranteed that oil-fired power plants would be prepared to plug what ISO officials call the region’s electricity “reliability gap.”

While power grid operators in New York and the mid-Atlantic states have recently been struggling to meet demand and asking their customers to conserve energy, New England’s grid operator has encountered relatively few problems so far this winter. In fact, New England sold spare electricity to the mid-Atlantic states for several hours on Tuesday.

This region’s winter peak demand for electricity came on December 17, when 21,514 megawatts were used. Usage on Wednesday was slightly less at 21,231 megawatts. With temperatures rising heading into the weekend, electricity demand is expected to fall.

Meet the Author

Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

Mark Rodgers, a spokesman for Cape Wind, said the proposed wind farm in Nantucket Sound would be an ideal solution to New England’s winter power woes. He notes, correctly, that Cape Wind operating at full capacity could produce the same amount of power as a natural gas plant and at far less cost. The same would also be true in the summer, when demand for electricity peaks.

The downside of Cape Wind is that the price it would charge for power, under contracts negotiated with the state’s two largest utilities, is far above market rates during normal weather periods.