Auction yields plenty of power for 2019-2020
Three new electric plants will burn natural gas, oil
NEW ENGLAND POWER GRID OFFICIALS appear to be having little problem meeting future electricity demand, but most of the new power plants coming on line run primarily on natural gas, increasing the region’s reliance on fossil fuels.
ISO-New England, which manages the region’s wholesale electricity market, said on Thursday that an auction conducted on Monday had easily generated enough power capacity to meet forecasted demand for the period running from June 1, 2019, through May 31, 2020. The auction secured 35,567 megawatts of power capacity at a total cost of $3 billion, $1 billion less than an auction held last year for the 2018-2019 period.
The results pleased grid managers because the numbers suggest the auction process will spur investments in new power capacity as existing plants in the region shut down. Officials said 4,200 megawatts of power generation, including 680 megawatts from Pilgrim Nuclear Power Station in Plymouth, are expected to go off line by 2019. Participants in this week’s auction represented 40,131 megawatts of power capacity, including 6,700 megawatts of new resources.
In a statement, Gordon van Welie, president and CEO of the power grid operator, said the auction results “bode well for meeting future resource adequacy requirements.”
The three new plants are all expected to operate using either natural gas or oil. Power generators prefer the flexibility of dual-fuel capability because it allows them to keep operating even if natural gas supplies run tight, as they have at times during the winter months in recent years. Under the auction process, winning bidders are penalized financially if they fail to deliver the power capacity they promised.
The low auction clearing price surprised grid operators. In fact, they said, the price was 35 percent less than what most analysts had assumed would be needed to finance the construction of new power plants.
Environmentalists have suggested the region doesn’t need new natural gas pipelines because there is already sufficient power capacity without them. But Robert Ethier, vice president for market operations at ISO-New England, said in a conference call with reporters that more natural gas is needed. “We continue to see a need for new gas infrastructure,” he said.More than half of New England’s electricity is produced by power plants that run primarily on natural gas. Officials say that percentage is likely to increase as power plants retire and new ones are built to replace them.
The ISO’s report also placed wind and solar in the larger context of the region’s power needs. According to the auction results, large-scale solar projects will supply 65 megawatts, or 0.2 percent, of the region’s power needs in 2019-2020, while wind will provide 135 megawatts, or 0.4 percent. Included in the wind total is 6.8 megawatts from the Deepwater Wind offshore project off of Block Island, Rhode Island. The ISO report also said small-scale solar, primarily rooftop installations, helped reduce the region’s power needs in 2019-2020 by 390 megawatts.