Grid Operators Lay Out New England's Energy Future

Sep 12, 2013

Credit Flikr Creative Commons / Claudio Schwarz

The New England Independent System Operator, or ISO, who operates the region’s electric grid, presented the latest draft of its 10-year plan in Boston on Thursday. 

All Things Considered Host Brady Carlson speaks with NHPR's Sam Evans-Brown about the future of energy in the region. 

The ISO operates the Grid, but it doesn’t own any power plants, so how exactly are they involved with planning for the future of where we get our electricity.

That’s right, the ISO doesn’t own anything that generates electricity but first and foremost, it has been given the job by the federal government of making sure that the lights stay on in New England, this is system reliability. And to that end they are given the power of designing the electricity markets, and setting up the incentives system that generators operate under. So they oversee the auctions where power is sold everyday, but also auctions of what’s called capacity, which is to say, they give money to power plant owners just for having power plants, and the goal there is to ensure that those power plants can afford to just sit around until that really hot day when they need to kick on and power lots of air conditioners.

What is the ISO planning  about?

This is an incredibly challenging time in the world of electricity, it used to be you had your baseload plants that were on all the time, your intermediate plants that cycled up and down. They outlined three big, overarching challenges they’re grappling with. The first two you have probably heard before, because locally PSNH has adopted them as talking points in favor of the Northern Pass project, and in favor of not selling their power plants, which are the two big energy debates in new Hampshire. First is an over-reliance on natural gas: the region is now getting about 52 percent of its energy from natural gas. And second is the looming retirement of 8,300 megawatts of old coal and oil fired power plants, an issue that has taken on even more urgency due to the retirement of Vermont Yankee. Once all those plants go dark, that’s basically three times what’s needed to power New Hampshire coming offline. But what’s interesting here is that the solution to these challenges proposed by the ISO have nothing to do with Northern Pass.

So what are we talking about here?

Basically a lot of tweaks to the markets. In terms of natural gas they are working to coordinate better with gas pipelines, so that on days where a lot of gas is going to be used, the ISO will know ahead of time how much gas can get to those gas power plants. But also they are implementing something called Pay for Performance. Right now, New England is swimming in capacity: we have more power plants than we really need, but we are very short on flexibility, a lot of older coal and oil power plants take a long time to turn on and come up to speed, so in the next five years ISO is going to start paying more for plants that can come online fast, and less for just straight capacity. And frankly that change could help a project like Northern Pass, but would hurt some of PSNH’s other plants, like their fossil fuel plants.

So, mostly we’ve talking about conventional power plants, what about the hundreds of megawatts of renewables that will be needed to meet the regions renewable energy goals?

Well this last bit is about renewables. States are for the first time really staring in the face what it takes to integrate large amounts of intermittent solar and wind into their grid. The more of these on the grid, the more challenging it will be for the ISO to keep the lights on with the current fleet of power plants. And right now the solution to this is roughly the same as the solution to the first two challenges. With more intermittent resources, the ISO is expecting to need even more flexibility. So again, in the coming years the ISO will be paying big bucks to companies that are willing to build power plants or, if it ever becomes cheap enough, energy storage that come online at the snap of a finger.