Dan Dolan, who is the New England Power Generators Association president states that capacity is adequate in meeting expectations.
If New England’s winter weather hits a normality of about 7 degrees Fahrenheit, ISO should peak its load at about 21,340 MW (which is lower when compared to an all-time high of 22,818 MW occurring in 2004).
As of November 30th, National Weather Service announces temperatures are expected to be higher than normal for the months of December, January, and February. The most recent winter passed was comparably mild than other winters. It only saw a peak load of only 19,545 MW.
The percentage of excess capacity drawn from the peak load would be down this winter, shifting from 47.4% to 45.7%. Both of these are considerably higher than the 2014-2015 year which was 40.1%.
The competitive market has aided New England in achieving the lowest wholesale electricity prices since 2003.
Extreme conditions (temperatures dropping as low as 2 degrees Fahrenheit) could see a peak load of 22,028 MW. Because of this, the ISO has installed a Winter Reliability Program to encourage natural gas and oil-fired plants to acquire suitable fuel before winter.
The process includes oil inventory, Liquid Nitrogen Gas, and demand response.
Referring to natural gas pipe constraints, ISO recognized 3,450 MW of total capacity could go unused when needed. Algonquin Incremental Market Project’s latest accomplishment added 342,000 dekatherms of natural gas services.
In response to this Dolan quotes, “highly competitive pricing into winter months” is expected. The on-peak package price, as of November 29th, stood at $47.95/MWh which is low when compared to the months of December and February where the price had jumped to $76.15 MWh and $74.80/MWh respectively.
In other regards, the Northeast Massachusetts-Boston area averaged December 2015 at $26.20/MWh as well as January and February 2016 at $41.78/MWh and $32.94/MWh respectively. Although most days will bring mild weather, the rare days of extreme coldness could cause natural gas to have priority over power generation. Regardless of planning for risks, any combination of things such as extreme temperatures for long periods of time, outages at power plants, and restrictions on natural gas delivery could affect the maintenance of reliability.
ISO New England executive vice president and chief operating officer, Vamsi Chadalavada, voiced his worry about future conditions.
With the retirement of non-gas power plants and installations of gas-fired generations certainty is unknown. Dolan expressed more assurance that the industry would settle with newer situations and that the Forward Capacity Market’s booming conditions would increase capability among generators.
“Over 4,000 MW of new plants have cleared recent Forward Capacity Auctions and are under construction of development today”, according to Dolan. The facilities will be quite efficient and have clean burning.
The 1997 passing of electricity restrictions in Massachusetts has caused a 25% increase in generation efficiency. Ultimately this means that energy produced by four plants can now be produced by three. Heavy competition throughout 2016 has caused pricing and generation efficiency advancements.