An opinion column by Marc Brown of the New England Ratepayers Association has been published in several newspapers recently, focusing on the future reliability of our region’s energy grid in the wake of news that Vermont Yankee will close in 2014.
Mr. Brown writes…
“The Vermont Yankee announcement means that New England ratepayers will be even more beholden to the fluctuations of the natural gas markets and the intermittency of when the wind blows. More fuel diversity for reliable, affordable baseload power is needed.”
We agree and have noted on several occasions that the region’s growing dependency on natural gas, which ISO cites as the top risk factor facing the region, is a critical challenge that must be addressed through fuel diversity and the development of new sources of clean, low-cost energy, like that of the Northern Pass.
Mr. Brown also notes that with the expected retirement of more generators, Northern Pass should be part of the region’s future energy mix…
“The likelihood of new nuclear or coal plants being built in New England is slim to none. Combine that with a restricted pipeline capacity that will handcuff natural gas generators, and you have limited options to a dwindling baseload power supply that has become over-reliant on natural gas. ISO has gone on record as stating that we are going to have to replace an expected 8,000 megawatts of retired capacity in the not-too-distant future. With the closing of one of the last nuclear plants in the region, Northern Pass is going to have to be part of the solution.”
The full column is available here.
Last week’s heat wave brought considerable pressure on New England’s energy grid and underscored the need to develop new sources of clean, reliable, low-cost energy. The six day long heat wave nearly broke records for demand both in New Hampshire and across the region. On the hottest day of the week, Friday, New England’s energy demand peaked at 27,377 megawatts, only 800 megawatts short of the all-time record. On the same day in New Hampshire, energy demand peaked at 2,210 megawatts, only 40 megawatts short of the all-time state record.
This prolonged period of high demand led to calls from ISO-New England to conserve electricity, created volatile swings in energy prices throughout the week, and brought significant changes to the region’s normal fuel mix. Energy prices fluctuated regularly from its normal average of about $38 per megawatt/hour to prices five to ten times greater, and, at one point even reached prices more than 17 times greater at over $600 per megawatt/hour.
Near record demand and high prices meant the costliest generation sources across the region were called on to keep the grid running. Oil-fired generation, which is rarely dispatched due to its high fuel costs, was called on heavily throughout the week. At one point during the heat wave, more than 3,500 megawatts of oil-fired generation in New England was running (more than 70% of the region’s oil-fired capacity), making it the third most used generation source behind only natural gas and nuclear and well ahead of coal, hydro, and all renewable generation sources.
New sources of clean, reliable, low-cost energy, like that of the Northern Pass project, would help the region better manage the grid through periods of high demand like last week. The 1200 megawatts of clean hydroelectric power of the Northern Pass would displace the need to call on some higher price, carbon emitting generation alternatives and provide a measure of price stability during a time when price spikes and volatility are common. The operation of the existing Hydro Quebec “Phase II” HVDC transmission line during last week’s heat wave provides an ideal example of the potential value of the Northern Pass during a period of high demand. The HQ Phase II line, which transports the same type of hydroelectric power that Northern Pass proposes to deliver, was the single largest source of energy for New England each day of the heat wave.
*Real time energy grid data from ISO to Go mobile application.
Over the past several weeks there has been a steady stream of news reports from across New England regarding the region’s over-reliance on natural gas and the serious challenges it caused the electric grid this winter.
We share the concerns that ISO-New England and others have expressed. With our over-reliance on natural gas now threatening the reliability of the region’s energy grid, the need for the Northern Pass project is clear, and we are working hard to advance the project so that it will help to address this critical issue.
The project’s top priorities in developing a new route have and continue to be to bring forth the best proposal for New Hampshire, and to address the concerns raised with our first routing proposal regarding the project’s potential effect on views. Our work to achieve these goals continues.
Although we have identified a new route which meets our project requirements, we believe it is in the best of interest of landowners, communities, and all stakeholders for us to continue to build on the details of this proposal and to take the time now to make some additional refinements before we begin the formal public review processes at both the state and federal levels.
It is clear now, more than ever, that the region needs new sources of clean, low cost power to diversify our power supply and secure our energy future. The Northern Pass will help to provide that energy diversity, while creating new jobs and tax revenue for New Hampshire – all at no cost to customers.
When the New England Power Generators Association (NEPGA) recently issued a new position paper, one might have assumed it was in response to recent warnings from ISO-New England regarding the region’s over-reliance on natural gas. ISO ranks that issue as the number one concern for the region, and recently explained the very real prospect of blackouts, price volatility, and fuel shortages unless the region can find solutions.
Instead, NEPGA turned a blind eye to this serious threat to our energy future and continued its attack on a real solution – Northern Pass. Why would NEPGA be opposed to adding 1200 MW of clean, base load energy to New Hampshire and the region? At a time when regulators, policy makers and customers are looking for solutions to our long-term energy needs, NEPGA appears to be looking out for its bottom line. NEPGA’s own fact sheet boasts that it controls more than 84 percent of all New England’s existing generation. It’s clear that Northern Pass concerns NEPGA because the clean hydro-power the project will deliver will displace the more expensive fossil fuels produced by NEPGA’s members.
Diversifying the region’s energy portfolio must be a part of our energy future if we are to address the significant challenges ISO-New England has identified. The clean, renewable, low cost, hydroelectric power of Northern Pass will provide New Hampshire and New England with energy diversity, while lowering energy costs and creating new jobs and tax revenue for New Hampshire.
At a meeting of ISO-New England’s Consumer Liaison Group last week, officials again warned of the risks associated with the region’s over-reliance on natural gas. This most recent warning, however, was considerably more serious than ISO-NE leadership has shared previously.
In a Sunday news story, Vamsi Chadalavada, ISO-NE Executive Vice President and Chief Operating Officer, told Dave Solomon of the New Hampshire Union Leader that ISO had come close to imposing blackouts due to constraints on the supply of natural gas that fuels most the region’s power plants.
“If we had lost one more big generator or a transmission line, we would have had to resort to our emergency procedures,” said Vamsi Chadalavada, executive vice president and chief operating officer for the Independent System Operator of the New England power grid (ISO-NE), based in Holyoke, Mass. “Those procedures are to call on help from neighboring areas, then to call for voluntary conservation, and if that’s not sufficient, to institute controlled power outages … We came quite close.”
In another Sunday news story, Nashua Telegraph writer David Brooks reported similar comments from New Hampshire Public Utilities Commissioner Michael Harrington, who stated, “This was a normal January and February, yet we came very close to having rolling blackouts. What happens if we have a very cold winter? We could be in trouble.”
While this issue of New England’s over-reliance on natural gas has been making news since last summer, it’s clear the close call the region experienced this winter is bringing this issue into greater focus.
Diversifying the region’s energy portfolio must be a major component of any solution to address this issue, as well as considering New England’s pipeline capacity. Northern Pass will not only bring diversity to the region’s energy portfolio, but will also drive down energy costs while creating jobs and millions in new tax revenues in New Hampshire. Given the short term risks to the grid that are now becoming apparent, the ability for Northern Pass be in operation as soon as late 2016 to mid-2017 provides further value to New England.
It is interesting to consider this recent news and the prospect of blackouts in New England at a time when some continue to claim Northern Pass is not needed. The facts tell a different story. More than ever, we need new sources of clean, low cost power to diversify our power supply and secure our energy future. Simply put, energy diversity equals energy security. Northern Pass will help provide that diversity to our energy portfolio while creating new jobs and tax revenue for New Hampshire – all at no cost to customers.
At the New Hampshire Business and Industry Association’s Annual Energy Forum this week Gordon van Welie, President of ISO New England, continued to cite our dependence on natural gas as the region’s “highest-priority strategic risk.” In his presentation, Mr. van Welie noted that a recent ISO study found that 8,300 megawatts of generating capacity are at risk of retirement by 2020 and that new capacity will be needed to cover a 6,000 megawatt shortfall in the future.
These comments follow more recent warnings from ISO that our growing over-reliance on natural gas as a fuel for generating electricity is a major challenge for the region. In a July column in Commonwealth magazine, van Welie, noted “It’s evident that generating electricity with natural gas has its benefits. But becoming heavily reliant on just one fuel poses challenges to the long-term stability of the power system.”
Meeting these future challenges requires planning and action now. Northern Pass represents an ideal solution for New Hampshire and the region by not only diversifying our energy portfolio, but also lowering our energy costs and reducing carbon emissions, with no customer subsidy required.
One viewpoint often heard in debate about The Northern Pass project is that New Hampshire doesn’t need this energy, because we are currently a “net exporter” of electricity. The perception is that all of the benefit of the project will go to Massachusetts and Connecticut.
While it’s true that the power plants located in our state contribute more to the regional “power pool” than New Hampshire consumers draw from that pool—on most days of the year—our economy and energy supply are inextricably linked to those of our neighboring states. If every state had to take care of itself from an energy perspective, we’d have some major reliability problems on our hands. We’d also be facing much greater risks of price volatility.
Here are a couple things to consider: