6 th Annual Natural Gas Conference Focus on the Future Power Generation in the Northeast Moderator: Jim Cohen, Verrill Dana, LLP Panelists: Eric Johnson, ISO-NE Heather Hunt, NESCOE Dan Dolan, New England Power Generators Association ISO-NE PUBLIC
O C T O B E R 1 8 , 2 0 1 8 | F A L M O U T H , M E Power Generation in the Northeast Verrill Dana Natural Gas: Focus on the Future Workshop Eric D. Johnson D I R E C T O R , E X T E R N A L A F F A I R S ISO-NE PUBLIC
Dramatic Changes in the Energy Mix The fuels used to produce the region’s electric energy have shifted as a result of economic and environmental factors Percent of Total Electric Energy Production by Fuel Type (2000 vs. 2017) 48% 2000 2017 31% 31% 22% 18% 15% 11% 8% 8% 1% 2% 7% Nuclear Oil Coal Natural Gas Hydro Renewables Source: ISO New England Net Energy and Peak Load by Source Renewables include landfill gas, biomass, other biomass gas, wind, grid-scale solar, municipal solid waste, and miscellaneous fuels. This data represents electric generation within New England; it does not include imports or behind-the-meter (BTM) resources, such as BTM solar. ISO-NE PUBLIC 5
Lower-Emitting Sources of Energy Supply Most of New England’s Electricity • In 2017, most of the Coal, 1% region’s energy needs Oil, 1% Hydro, 7% were met by natural Natural Gas, gas, nuclear, imported 41% Renewables, 9% electricity (mostly hydropower from 2017 Eastern Canada), Net Energy renewables, and other for Load: 121,142 GWh low- or non-carbon- Imports, 17% emitting resources • Region is transitioning away from older coal Note: and oil resources Renewables include landfill gas, biomass, other biomass gas, wind, grid-scale solar, Nuclear, 26% municipal solid waste, and miscellaneous fuels. ISO-NE PUBLIC 6
Natural Gas and Wholesale Electricity Prices Are Linked Monthly average natural gas and wholesale electricity prices at the New England hub Winter $180 $30 2013/2014 $160 Winter Before the $25 2014/2015 Recession and $140 Hurricanes Marcellus Shale Winter Winter hit the Gulf 2012/2013 gas boom $120 2017/2018 $20 Electric Energy $/MWh Fuel $/MMBtu $100 $15 $80 $60 $10 $40 $5 $20 $0 $0 Wholesale Electricity at New England Hub (Real-Time LMP) Natural Gas ISO-NE PUBLIC 7
Natural Gas Is the Dominant Fuel Source for New Generating Capacity in New England Cumulative New Generating Capacity in New England (MW) 18,000 Natural Gas 16,000 Nuclear (uprate) 14,000 Wind Solar 12,000 Biomass 10,000 Hydro 8,000 Fuel Cell 6,000 Oil 4,000 2,000 0 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 Note: New generating capacity for years 2018 – 2021 includes resources clearing in recent Forward Capacity Auctions. ISO-NE PUBLIC 8
But the Natural Gas Delivery System Is Not Keeping Up with Demand • Few interstate pipelines and liquefied natural gas (LNG) delivery points Pipelines • Regional pipelines are: LNG facilities – Built to serve heating demand, Marcellus shale not power generation – Running at or near maximum capacity Source: ISO New England during winter ISO-NE PUBLIC 9
Since 2013, More Than 4,600 MW of Generation Have Retired or Announced Plans for Retirement in the Coming Years • More than 5,000 MW of remaining coal and oil are at risk of retirement • These resources have played a critical role in recent winters when natural gas supply is constrained in New England Closed or Retiring Generation at Risk ISO-NE PUBLIC 10
Wind Power and Natural Gas Dominate New Resource Proposals in the ISO Interconnection Queue Proposals by Type Proposals by State Megawatts Hydro State Battery (MW) Biomass 74, 1% Storage 37, <1% Fuel Cell 845, 6% Massachusetts 5,737 15, <1% Solar Maine 4,568 1,533, 11% Connecticut 1,630 TOTAL Rhode Island 1,178 13,544 MW New Hampshire 243 Wind 7,948, 59% Natural Gas Vermont 188 3,092, 23% Total 13,544 Note: Some natural gas proposals include dual-fuel units (oil); some wind and solar Source: ISO Generator Interconnection Queue (August 2018) proposals include battery storage; megawatts represent nameplate capacity ratings; FERC and Non-FERC Jurisdictional Proposals megawatts have been rounded for each proposal. ISO-NE PUBLIC 11
Energy-Efficiency and Renewable Resources Are Trending Up in New England Energy Efficiency Solar Wind (MW) (MW) (MW) 7,900 5,800 5,200 2,500 2,400 1,300 Existing Proposed EE thru 2017 EE in 2027 PV thru 2017 PV in 2027 Final 2018 CELT Report , EE through 2017 includes Final 2018 ISO-NE PV Forecast , AC nameplate Nameplate capacity of existing wind resources EE resources participating in the Forward Capacity capacity from PV resources participating in the and proposals in the ISO-NE Generator Market (FCM). EE in 2027 includes an ISO-NE region’s wholesale electricity markets, as well Interconnection Queue; some wind proposals forecast of incremental EE beyond the FCM. as those connected “behind the meter.” include battery storage. ISO-NE PUBLIC 12
Developers Are Proposing Large-Scale Transmission Projects to Help Deliver Clean Energy to Load Centers • Developers are proposing 17 elective transmission upgrades (ETUs) to help deliver nearly 14,000 MW of clean energy – Mostly Canadian hydro and onshore wind from northern New England • Wind projects make up 59% of proposed Map is representative of the types of projects new power resources, but most are remote announced for the region in recent years • Massachusetts has plans to contract for 1,600 MW of offshore wind Source: ISO Interconnection Queue (August 2018) ISO-NE PUBLIC 13
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For More Information Download the ISO to Go App ISO to Go is a free mobile application that puts real-time wholesale electricity pricing Subscribe to the ISO Newswire and power grid information in the palm of your hand ISO Newswire is your source for regular news about ISO New England and the wholesale electricity industry within the six-state region Log on to ISO Express ISO Express provides real-time data on New England’s wholesale electricity markets and power system operations Follow the ISO on Twitter @isonewengland Follow the ISO on LinkedIn @iso-new-england ISO-NE PUBLIC 15
Power Generation in the Northeast: Fuel Security Natural Gas Conference October 2018
Fa Fast-tracking Fuel el Sec Securi rity ty Chapter 1. Now. Exceptionally accelerated litigation over what to pay Exelon’s Mystic units and LNG terminal to prevent 2022 retirement • Decision expected by end of 2018 Chapter 2. Short-Term. FERC considering ISO-NE fast-tracked proposal seeking authority to offer cost-of-service agreements to resources that ISO-NE deems necessary for fuel security • Decision expected by end of 2018 • Legal basis to approve a contract between ISO-NE and Exelon (ch. 1) Chapter 3. Long-Term. ISO-NE in stakeholder process to develop market-based fuel security solution(s) - incremental to Pay for Performance • ISO-NE FERC filing by summer 2019 www.nescoe.com 17
“Chap Chapter 1” 1”: Exelon’s M Mystic 8 8 & 9 9 and nd Ev Everett (202 022-20 2024 24) • If FERC concludes that ISO-NE may offer a cost-of- service agreement under the banner of fuel security to a resource that wants to retire, critical to protect consumers’ economic interests and impacts on electricity markets in the process • Actively litigating ISO-NE and Exelon’s negotiated agreement including, for example, capital expenses, rates of return, management costs of LNG supply business, a true-up mechanism and “clawback” • No consumer cost impact analysis to inform consideration of filed agreement and changes to pro forma • NESCOE sought reconsideration on the schedule, which accelerated pace benefits Exelon www.nescoe.com 18
“Chap Chapter 2” 2”: Co Cost-of-Ser ervi vice e Agreem eemen ent A Author hority • ISO-NE proposal for contracting authority under the banner of fuel security is new and proposed to be temporary (2022-2025) • ISO-NE has such authority in connection with transmission security (until ISO-NE develops a transmission solution) • ISO-NE’s Fuel Security Analysis will determine whether a resource is needed for fuel security • Fuel security need arises when ISO-NE’s model indicates there is likely to be insufficient energy to operate the system through cold weather in winter www.nescoe.com 19
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