New England’s grid operator is girding for a future without new natural gas infrastructure, even as fuel security issues raise the possibility that the region’s electricity system won’t have enough energy to meet demand on the coldest days of winter.

In a recent conference call to discuss the “state of the grid” in 2019, ISO New England (ISONE) CEO Gordon van Welie said the “vulnerabilities” that have plagued the region’s energy system in recent years are “still here and still growing,” driven by a shifting resource mix as states look to decarbonize and generators with on-site fuel storage exit the grid.

“Nuclear, oil, and coal-fired power plants that operate with fuel stored onsite are retiring in greater numbers and they are being replaced by more natural gas-fired power plants and renewable resources,” van Welie said. “The new resource mix is cleaner, but it is also dependent on the weather or timely natural gas deliveries.”

But even as the grid relies more heavily on timely natural gas deliveries, van Welie was blunt in assessing the prospect of new pipelines entering service to help improve reliability.

“I think we are facing reality. We do not think that were are going to see any significant pipeline expansion into the region, and our view is we have to operate with what we have.”

Operating with the resource mix in place could prove a tricky balancing act, and van Welie described the “timing issue” of capacity resources entering and exiting the market as among his greatest concerns moving forward.

“It’s far easier to retire and lose some of the fuel-secure resources, resources that have onsite fuel, than it is to integrate and bring online replacement sources of energy,” van Welie said. “I think as the region moves forward in time to decarbonize the grid, this is going to be one of the most challenging things, the coordination of entry and exit. People look at the ISO as someone who can prevent exit, but that’s not correct.”

ISONE has some tools at its disposal to keep a resource in the market for reliability reasons, “but in the end it’s the resource owner’s choice whether to exit the market or not,” he said. On the other end, ISONE has “no control on the speed of entry” for new resources.

Thus far the 2018/19 heating season has proved “relatively mild” for New England, which routinely faces severe constraints and skyrocketing energy prices during peak cold stretches. The region has been able to make good use of liquefied natural gas (LNG) imports to maintain reliability, according to van Welie.

ISONE weathered a couple brief cold snaps “without having to burn much oil at all, because were able to rely on LNG,” van Welie said. “What was promising was the arrival of some LNG deliveries during those cold snaps. I think what remains to be seen for us and is a remaining concern is how well the market will perform in a situation such as we experienced last winter, where we had that very long extended two week cold period.

“The region is at the end of the pipeline system. The pipeline becomes essentially useless to us when it gets really cold,” he said. But relying on barges and trucks and LNG tankers to deliver fuel can only go so far during a nor’easter “when the rivers are frozen and the harbors are frozen. So there’s always a lag between when you want the fuel and when it arrives.”

The executive proposed making use of ISONE’s fuel inventory information to establish a forward market to properly price fuel security in the region.

The region is lacking “some kind of forward pricing signal that indicates to the region as a whole that we’re running out of fuel,” van Welie said. “...We don’t have a regional fuel gauge that indicates we’re getting to the bottom of the fuel tank.”

There needs to be a mechanism to put a price on future fuel availability to incentivize conservation ahead of periods of potential scarcity, he said.

“This is a complexity that is unique in New England because of our situation,” van Welie said. “It’s not really a problem that other market operators have had to deal with.”

With decarbonization a priority, New England policy makers don’t appear to view burning more natural gas as part of the solution to solving the energy “situation” that the region faces. That’s left local utilities with their hands tied.

Late last month, a Massachusetts utility issued a moratorium on new natural gas service. Holyoke Gas & Electric (HG&E) said as of January it can no longer accommodate new natural gas service requests, citing a lack of supply availability.

“HG&E natural gas customers are served by Tennessee Gas Pipeline’s Northampton Lateral, which has become severely constrained due to a dramatic increase in demand over the last two decades,” the utility said. “Unfortunately, there has been no corresponding increase in pipeline capacity to deliver additionally supply into the region.

“...Over the last several years, HG&E’s load has grown significantly and is now operating at capacity during peak periods. As a result, HG&E is forced to impose a moratorium on new natural gas connections until the capacity issue is addressed.”