New England’s reliance on natural gas to fuel power generators “could create operational challenges if natural gas supplies become tight this winter,” which would force the region to turn to oil- coal-fired generation “to lessen any operational risks” to the power system, according to a winter forecast issued Tuesday by ISO New England Inc. (ISO-NE).
The grid operator said it expects to have sufficient capacity to meet the region’s demand for electricity, but, as it has said several times recently, it is concerned about New England’s reliance on natural gas.
“…[W]hile we currently are working on several mid- and long-term solutions with stakeholders, including changes to the wholesale electricity markets, these will take time to implement,” said ISO-NE COO Vamsi Chadalavada. “In the meantime, the ISO will continue to turn to coal- and oil-fired generation when necessary to ensure that the power needed to meet consumer demand and maintain grid reliability is available this winter.”
New England gets anywhere from 50-70% of its energy from gas-fired units depending on conditions each day, according to Pete Brandien, vice president of system operations at ISO-NE (see Daily GPI, Dec. 4). Because the region doesn’t have the massive natural gas storage facilities available to some other regions, it is uniquely dependent on natural gas pipelines for its electricity generation.
Last month ISO-NE, concerned about its increased reliance on gas-fired power, asked the Federal Energy Regulatory Commission (FERC) to install interim rules for real-time communication with pipelines within the next month to help New England power producers get through the winter. In a filing at FERC, ISO-NE warned of “significant reliability concerns regarding generator performance that may be exacerbated during the upcoming winter” [ER13-356] (see Daily GPI, Nov. 15).
The ISO is particularly concerned because the region is relying increasingly on gas-fired resources. And, in fact, the Commission staff, in its recent “Winter Outlook” report, voiced concerns about possible supply shortfalls in New England.
“Today, more than 13,000 MW — almost 45% of the region’s generating capacity — is natural-gas-fired generation, and these generators produce more than half of the region’s power,” ISO-NE said. “And while oil- and coal-fired generators are seldom called on to provide electricity because of their higher fuel costs, they make up nearly 30% of the region’s generating capacity — more than 6,000 MW and 2,000 MW, respectively. These resources play an important role in maintaining reliability during times of high demand, system stress, or the unavailability of natural gas-fired generation.”
The grid operator, which participated in a series of regional conferences on gas-power coordination issues hosted by FERC this summer (see Daily GPI, Aug. 31; Aug. 29; Aug. 21; Aug. 24), said Tuesday that it will continue coordination efforts with regional natural gas pipeline companies and has surveyed the fuel inventory at dual-fuel, coal, and oil power plants to establish their likely availability this winter. And discussions between ISO-NE and liquefied natural gas (LNG) suppliers have led ISO-NE “to expect LNG to be delivered to certain Northeast Massachusetts/Boston generators this winter.”
Demand for natural gas in Boston and other New England cities already exceeds available supply and is causing price spikes, despite the relative proximity of production from the Marcellus Shale, according to RBN Energy LLC’s Sandy Fielden.
“These supply problems are being caused by a combination of infrastructure and pricing constraints in the New England market that are still with us, regardless of the onslaught of shale production,” Fielden wrote in RBN’s blog Monday. But northeast infrastructure projects have primarily benefited the New York and Philadelphia markets, production at Sable Island — a traditional supply point for New England — has declined for several years, and LNG imports to the region have dwindled as U.S. natural gas prices have declined, Fielden said.
Forecasters at Andover, MA-based Weather Services International have said they expect the The United States’ northern tier, including New England, will be colder than normal through the end of January, and Arctic air is expected to be a “frequent guest in [the] largest gas-demand population centers” (see Daily GPI, Nov. 20). The National Oceanic and Atmospheric Administration, on the other hand, forecast warmer-than-average temperatures across an area stretching from Arkansas west through Arizona and north as far as the Canadian border, with most of the rest of the United States expected to experience normal winter temperatures from December through February (see Daily GPI, Oct. 19).
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