Liquefied natural gas (LNG) will become a larger part of the Northeast energy picture, Energy Security Analysis Inc. (ESAI) said in its latest edition of the “Northeast Energy Watch Quarterly.”
According to ESAI, other significant emerging trends in that part of the country are that electric trade will increase between control areas, allowing for more efficient optimization of regional resources, and new generation will come from a variety of fuel sources.
“Companies seeking to operate in the Northeast market power space must take these forces into account if they are to thrive,” said Paul Flemming, Manager of Power & Natural Gas Services at ESAI.
ESAI believes these fundamental forces will cause most of the next $20 billion of investment in the Northeast to be spent on gas and power transmission and on forms of generation that are alternatives to conventional natural gas.
“Electricity will become more expensive as the generation surplus that came about from the expansion of the fleet of CCGTs in the 1995-2005 decade is gradually consumed in the 2006-2015 decade,” said Flemming. “The grids will be built out to incorporate all the CCGTs in the fleet into much more robust transmission systems, gradually restoring economic value to generation assets that were orphaned by the brutal collapse in generation values of the past several years.”
Investment in transmission and natural gas pipeline structure are also likely targets, ESAI went on to say.
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