Energy forecast: Wind power will rival gas

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BOSTON — For the first time in the modern era, the amount of wind power proposed for New England exceeds the amount of natural gas generation proposed for the region, according to the electrical grid's operator.

"All these renewable and clean energy resources are growing rapidly, but it will be many years before New England can rely on these sources for all its power needs," ISO New England President and CEO Gordon van Welie said in an online conference with reporters Tuesday. Spurred by government policies designed to reduce carbon emissions, wind and other renewable resources are ascendant, but natural gas for several years has been the dominant fuel source for electrical turbines, boxing out coal and oil with generally cheaper prices.

There are now 1,300 megawatts of wind generation, up from 375 megawatts in 2011, and there are a total of 8,600 megawatts of wind power proposed, half of which would be offshore, van

Welie told reporters in an overview of the electric grid.

In a recent forward-looking auction, New England's electrical grid operator set a regionwide target of 33,725 total megawatts of capacity in 2021-2022. Proposed wind projects might not be built, and natural gas is expected to become even more prevalent in the next few years, according to ISO New England. This month, New England's electrical grid operator procured about 13,000 megawatts of new power resources to meet the region's demands three years from now, including 6,400 megawatts of renewable generation and demand-reduction, and 5,100 megawatts from natural gas plants. Wind accounts for 300 megawatts of the new resources procured for 2021-2022.

"Natural gas and energy efficiency make up the biggest portion of new resources," van Welie said in a Tuesday conference call.

Solar has also "exploded" regionally, reaching 2,400 megawatts of installed capacity, up from 250 MW five years ago, according to van Welie. Of that, more than half, about 1,600 megawatts, of the installed solar projects are in Massachusetts.

"All of these tiny facilities can cause deep dips in consumer demand on sunny days with steep increases in demand as the sun goes down," van Welie said.

State regulators have looked to batteries to help smooth the transition to renewable resources. There are currently 20 megawatts of battery storage connected to the grid, and more than 400 megawatts of battery projects have requested connection, according to van Welie.

The Forward Capacity Market auction, conducted annually, is a venue for power generators to commit to being able to provide electricity three years into the future. The Holyoke-based grid operator also conducts a daily commodity market for electricity.

Four years ago, the auction produced a "capacity shortfall and relatively high prices" for the 2017-2018 year. Energy resources have since met that demand, and the forward market for 2021-2022 resulted in 34,828 megawatts of commitments, which is about 1,100 megawatts more than the targeted amount.

The clearing price of $4.63 per kilowatt-month for the most recent auction was the lowest price in five years, and is about 12 percent cheaper than last year's auction price.

In late December and early January, the region's electricity-producing resources were stretched as a cold snap motivated people to burn more gas in their homes - diverting the supply from gas-fired power plants.

Power generators burned oil and imported liquefied natural gas to keep up with demand, causing inventories to "decline rapidly" during the recent cold spell as plants consumed about 2 million barrels of oil, according to van Welie.

"Towards the end, several large oil-fired generators had just enough fuel for a few more days of operation and deliveries of more oil were several days away. Fortunately the cold weather broke before they ran out of fuel," said van Welie. He said, "For the foreseeable future, New England will be dependent on stored and imported fossil fuels, and imported electrical energy — which includes energy from hydro-generators in Canada - to ensure system reliability when gas pipelines are constrained."

The grid chief raised concerns about "fuel security" as demand for natural gas outpaces the capacity of pipelines to supply it to the region. Gas pipeline projects — largely overseen by the federal government — have been highly controversial in Massachusetts as local activists have opposed the infrastructure endeavors, warning they present environmental hazards.

During the recent cold spell, liquefied natural gas tankers were drawn to the region because prices for the fuel were higher than anywhere else in the world, according to van Welie. On Jan. 5, in the thick of the cold spell, Marcellus shale natural gas was roughly 20 times more expensive in New England than at its source in Pennsylvania, according the grid operator.

The electric grid will soon need to get by without the 680-megawatt Pilgrim Nuclear Power Station, which is set to close down in May 2019. Around the region, more than 5,000 megawatts of coal and oil power plants are at risk of shutting down because of market pressures, according to ISO New England.

A map produced by the grid operator indicates the Mystic Generating Station, located in Everett at the mouth of the Mystic River, is at risk of losing generation. That 1,998-megawatt station, owned by Exelon, has three systems that run on gas or gas and oil, as well as an 8-megawatt "oil fueled peaking unit which is run during periods of high demand," according to the company. The gas-fired turbines would not be subject to the same negative market pressures as the 8-megawatt oil-fired unit.

New England states are leaders in energy efficiency, which has helped temper prices and greenhouse gas emissions, according to van Welie.

Last week, Enel Group announced that EnerNOC, a subsidiary of its Enel X division, received market commitments to deliver 157 megawatts of demand-response for the 2021-2022 period, an increase from the 101 megawatts it committed to for the 2020-2021 period. Enel X will inform its large commercial and industrial clients to reduce their power consumption to help stabilize the grid, under the arrangement.

The Italian multinational company established its U.S. headquarters in Andover last year, and under the new agreement it will enter the demand-response markets in Connecticut and Vermont.

"With this additional capacity we will be able to deliver predictable revenues for our commercial and industrial customers, while also helping ensure the reliability of the New England power grid," said Francesco Venturini, head of Enel X.

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