New England depends largely on natural gas for its power generation needs, but increased use of energy efficiency (EE) programs will help to keep electric demand nearly flat over the next decade, according to ISO New England's 2013 Regional System Plan, which was released Friday.
"Energy consumption, unadjusted for energy-efficiency programs, is projected to grow an average of 1.1% annually through 2022, while summer peak demand is expected to grow by 1.4% per year...when the energy-saving effects of EE are included, the forecast shows essentially no long-run growth in electric energy use and 0.9% annual growth in annual summer peak demand," according to the 172-page document.
In 2012, 52% of electricity generated in the region came from gas-fired plants, 31% from nuclear, 7% from hydro and pumped storage, 7% from renewables, 3% from coal plants and just 1% from oil units. Since 1997, natural gas consumption by New England power producers has grown at a trend-line growth rate of 6% per year.
"The region's heavy dependence on natural-gas-fired generation to meet its electricity needs has resulted in recent operating problems similar to those experienced during past events," including a January 2004 cold snap that resulted in record demand for electricity, the grid operator said. "Adverse interactions between electric power generators and the natural gas system have occurred, and could occur any time of the year, because the natural gas system has been subject to interruptions that reduce the flow of natural gas to generating units requiring fuel.
"In addition, the scheduling requirements of the natural gas system for providing fuel to generators can be in conflict with the electric power sector's need for flexible operation. Adding to this issue is that the regional dependence on natural-gas-fired generation to provide both electric energy and capacity is expected to grow with the likely retirement of older coal and oil units and their replacement, in whole or in part, with generators in the queue that burn natural gas. Upgrades to the natural gas system infrastructure, some of which have been proposed, would provide some improvements to the deliverability of natural gas. However, additional solutions are required to address fuel-adequacy issues."
Reliability and peak demand in New England could be compromised without a more robust natural gas market and infrastructure build out in the region, according to officials from the gas and power sectors, including Kevin Kirby, vice president for market operations at ISO New England (see Daily GPI,Oct. 24). Kirby said the regional grid operator is working closely with various gas pipelines serving the region to develop closer coordination in the dispatching of gas and electricity supplies. And Peter Brandien, vice president of system operations for ISO-New England, has said that while New England is taking a fuel-neutral approach, it needs to have additional gas infrastructure (see Daily GPI, Oct. 17).
New England's natural gas infrastructure will be increasingly under pressure from demand growth from the power sector in coming years, with 11 of 14 sub-regions expected to exceed constraint capacity levels on more than 30 days/year under the current infrastructure, according to Benjamin D'Antonio, counsel and analyst for the New England States Committee on Electricity (see Daily GPI, Sept. 30).
A quarterly update of various regional efforts to coordinate natural gas and electric markets released recently by the Federal Energy Regulatory Commission showed that the New England and Northeast generation markets will continue to be the most gas-dependent during the upcoming heating season (see Daily GPI, Sept. 20). The Commission recently passed an interim order that would make it easier for Northeast generators to substitute oil if natural gas was in short supply or was too high-priced. Preliminary estimates call for Northeast generators to replace as much as 6.2-9.8 GW of coal-fired capacity with gas by 2015.