New England’s Power System:At a Crossroads – Again!

Stephen RourkeV I C E P R E S I D E N T , S Y S T E M P L A N N I N G

NECPUC Symposium: Governors’ Infrastructure Initiative Panel

J U N E 1 6 , 2 0 1 4 | S T O W E , V T

Overview of Presentation

• Historical Perspective

• Strategic Planning Initiative Update

• Recent Planning Tools

• Integrating Renewables

• Resource Performance and Flexibility

• Retirements

• Gas Dependence

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Familiar Doctor’s Office Pain Chart Will Help Us Assess Grid Challenges Today

Choose the Face that Best Describes How You Feel

0 1 2 3 4 5 6 7 8 9 10

No Pain

DistressingPain

UnbearablePain

0No Hurt

2Hurts Little Bit

4Hurts Little More

6Hurts Even More

8Hurts Whole Lot

10Hurts Worst

Difficult Grid Conditions Are Not New New England’s system faced and overcame painful times

• 1970s & 1980s: Oil embargos

• 1980s: Rapid load growth plus resource performance issues and capacity shortages

• 1990s: Nuclear shutdowns and emergency actions

• 2000s: Southwest CT reliability problems, gap RFP and reliability agreements; cold snap

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ISO New England’s Strategic Planning InitiativeFocused on developing solutions to the region’s top reliability risks

Reliability requires a flexible, high-performance fleet:

• Natural Gas Dependency– “Just-in-time” fuel delivery presents

an immediate risk to reliability

• Power Plant Retirements– New England will need new ways to

meet peak demand as aging plants close

• Renewable Resource Integration– Balancing variable generation with

reliability will require changes in system operations

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EE Flattens Annual Energy UsePV Forecast Shows Significant Growth

ISO Forecasting Solar and Energy Efficiency Anticipating impacts of state policy priorities

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023125,000

130,000

135,000

140,000

145,000

150,000

155,000

RSP14 RSP14-FCM-EEF RSP14-FCM

GWh

Thru 2013

2014 2015 2016 2017 2018 2019 2020 2021 2022 20230

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

MW

500

1,800

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ISO is Implementing Enhancements to Modeling of Capacity Zones

Maine

Rest of Pool (NH,

VT, WCMA)

NEMA

SEMA/RICT

• ISO will model up to 5 capacity zones in the next Forward Capacity Auction (FCA 9), in February 2015

– CT, NEMA and SEMA/RI will be evaluated as potential import-constrained zones

– Maine will be evaluated as a potential export-constrained zone

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Market Resource AlternativesISO conducted studies analyzing alternatives to transmission

• Studies looked at a mix of generation, load reduction and transmission upgrades

• Vermont and New Hampshire (2011)– About 900 MW of supply-side resources needed to resolve thermal issues in

six of the nine NH/VT study sub-areas

• Greater Hartford (2012)– The supply-side MRA analysis shows that approximately 950 MW of

generation is required to resolve all the identified thermal needs

• Southeastern Massachusetts and Rhode Island (2014)– Approximately 941 MW of generation/load reduction would be required to

resolve all the identified N-1 thermal needs – Process updated to utilize a hybrid of small transmission fixes along with

generation and demand resources

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Variable Resources are Trending Up

Existing Proposed

700

2,000

Wind (MW)

Nameplate capacity of existing wind resources and proposals in the ISO-NE Generator Interconnection Queue; megawatts (MW).

PV thru 2013 PV in 2023

499

1,807

Solar (MW)

2014 Final Interim ISO-NE Solar PV Forecast, based on state policies. MW values represent nameplate ratings

Interconnection Issues:

Wind resources often interconnect in remote areas, on weak transmission lines, and must grapple with congestion

State PV interconnection standards and lack of control or visibility are concerns for ISO

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Gas Units Fell Below Their Capacity Obligations This Winter• System ran with only 3,000 MW of gas-fired generation out of

11,000 MW with obligations in the capacity market

• Assuming winter 2013/14 weather, this condition existed on 20 days

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Generator Non-Price Retirement RequestsAlmost 3,400 MW of generation plan to retire within the next five years

• Salem Harbor Station (749 MW)– 4 units (coal & oil)

• Vermont Yankee Station (604 MW)– 1 unit (nuclear)

• Norwalk Harbor Station (342 MW)– 3 units (oil)

• Brayton Point Station (1,535 MW)– 4 units (coal & oil)

Total MW Retiring in New England*

Connecticut 348 MW

Maine 37 MW

Massachusetts 2,360 MW

New Hampshire 1 MW

Rhode Island 13 MW

Vermont 634 MW

Total 3,393 MW

Major Retirement Requests:

*Megawatts based on relevant Forward Capacity Auction (FCA) summer qualified capacity (NOTE: total includes full and partial generator Non-Price Retirement (NPR) requests for Capacity Commitment Period (CCP) 2013-2014 through CCP 2017-2018; does not include NPRs for demand response (DR) resources)

Source: Status of Non-Price Retirement Requests; October 23, 2013

Other Retirements Looming

Generator Proposals in the ISO QueueAlmost 7,000 MW

By Type

Natural gas; 4340;

63%

Wind; 2067; 30%

Hydro; 12; 0%

Pumped-storage hydro; 50; 1%

Biomass; 138; 2% Solar; 10; 0%

Oil; 245; 4%

By State

ME; 1437; 21%

NH; 154; 2%

VT; 191; 3%

MA; 3367; 49%

CT; 1713; 25%

Note: Some natural gas include dual-fuel units (oil)

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Source: ISO Generator Interconnection Queue (April 2014) FERC Jurisdictional Only

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Conclusions

Some good news

• State policies are bringing energy efficiency and renewables onto the system

• A lot of activity in the interconnection queue

• Transmission for reliability helps ease some retirement concerns

• New England has a proven history of overcoming energy and capacity challenges

Some not so good news

• New England has a growing reliability problem due to natural gas availability constraints and declining resource performance

• Expected non-gas retirements will increase demands on an already constrained natural gas system

• Major market enhancements and energy infrastructure improvements are years away

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