Energy/ Environment

Auction yields plenty of power for 2019-2020

Three new electric plants will burn natural gas, oil

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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.”

Approximately 89 percent of the capacity from the auction came from existing and new power generation, 7 percent from reductions in electricity demand, and 4 percent from imports. The auction produced 1,459 megawatts of new power generation, nearly all of it coming from three proposed power plants expected to be up and running in three years in Rhode Island, Connecticut, and Massachusetts.

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.

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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.

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.

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