ISO New England Is Focused on Developing Solutions to the Region’s Top Reliability Risks Reliability requires a flexible, high-performance fleet: • Natural Gas Dependency – • Power Plant Retirements – • “Just-in-time” fuel delivery presents an immediate risk to reliability New England will need new ways to meet peak demand as aging plants close Renewable Resource Integration – Balancing variable generation with reliability will require changes in system operations ISO-NE PUBLIC 1 Region Has Not Developed Gas Pipeline Infrastructure to Keep Pace with Growth of Gas-fired Generation Cumulative New Generating Capacity in New England (MW) 14,000 12,000 10,000 8,000 6,000 4,000 Natural Gas Oil Biomass Fuel Cell Hydro Solar Wind Nuclear uprate 2,000 0 1997 1999 2001 2003 2005 ISO-NE PUBLIC 2007 2009 2011 2013 2 New England Has Seen Dramatic Changes in Power System Resources The resources making up the region’s installed generating capacity have shifted from nuclear, oil and coal to natural gas Percent of Total System Capacity by Fuel Type (2000 vs. 2014) 2000 2014 43% 34% 18% 21% 15% 18% 12% 11% 7% Nuclear Oil Coal Natural Gas 9% Hydro and Other Renewables 7% 5% Pumped Storage Source: 2014 CELT Report, Summer Seasonal Claimed Capability (SCC) Capacity Other renewables include landfill gas, biomass, other biomass gas, wind, solar, municipal solid waste, and miscellaneous fuels ISO-NE PUBLIC 3 New England Has Seen 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. 2014) 2000 31% 2014 44% 34% 22% 18% 1% Nuclear Oil 15% 13% 15% 1.7% 1% 5% Coal Natural Gas Hydro and Other Renewables Pumped Storage Source: ISO New England Net Energy and Peak Load by Source Other renewables include landfill gas, biomass, other biomass gas, wind, solar, municipal solid waste, and miscellaneous fuels ISO-NE PUBLIC 4 Natural Gas and Wholesale Electricity Prices Are Linked Because of New England’s heavy reliance on natural gas as a fuel source, natural gas typically sets the price for wholesale electricity $180 Monthly Average Natural Gas and Wholesale Electricity Prices in New England $160 $30 $25 $20 $120 $100 $15 $80 Fuel $/MMBtu Electric Energy $/MWh $140 $10 $60 $40 $5 $20 $0 $0 Wholesale Electricity at New England Hub (Real-Time LMP) ISO-NE PUBLIC Natural Gas 5 Natural Gas and Wind Power Dominate New Resource Proposals in the ISO Queue Approximately 11,000 MW By Type Biomass, 37, 0% Hydro, 10, 0% Wind, 4,083, 37% Solar, 158, 2% By State Pump Storage, 25, 0% VT, 209, 2% LFG, 2, 0% MA, 3,855, 35% NH, 160, 1% RI, 1,452, 13% Natural gas, 6,672, 61% ME, 3,498, 32% CT, 1,814, 17% Source: ISO Generator Interconnection Queue (October 2015) FERC Jurisdictional Proposals Only Note: Some natural gas include dual-fuel units (oil) ISO-NE PUBLIC 6 Infrastructure Will Be Needed to Deliver Energy from Proposed Resources All Proposed Generation Wind Proposals Developers are proposing to build 11,000 MW of generation, including 6,700 MW of gas-fired generation and 4,100 MW of wind Natural gas 61% Wind 37% ME ME 3,080 3,379 MW VT 30 VT MW 149 MW MW NH NH 65 91 MW MW MA464 480 MW MW MA Other 2% Source: ISO Generator Interconnection Queue (October 2015) FERC Jurisdictional Proposals Only ISO-NE PUBLIC 7 Resource Shift Creates Reliability Challenges • New England’s generation fleet is changing rapidly – older, fossil fuel-fired units are retiring and reliance on natural gas for power generation is increasing • The ISO must rely increasingly on resources with uncertain performance and availability: – Intermittent resources (wind, solar) may not produce power at the times it is needed most Credit: NREL – Natural gas resources lack fuel storage and rely on “just-in-time” fuel – Coal, oil-steam fleet is aging, prone to mechanical problems, subject to increasingly stringent environmental regulations • Reliable operation of the New England power system is challenged by these developments, particularly during the winter ISO-NE PUBLIC 8 More Than 4,200 MW of Generation Have Retired or Will Retire in the Next Five Years Major Generator Retirements: • Salem Harbor Station (749 MW) – 4 units (coal & oil) • Vermont Yankee Station (604 MW) – 1 unit (nuclear) • Norwalk Harbor Station (342 MW) – 3 units (oil) • Brayton Point Station (1,535 MW) – 4 units (coal & oil) Total MW Retiring in New England* Connecticut Maine Massachusetts New Hampshire Rhode Island Vermont • Mount Tom Station (143 MW) – 1 unit (coal) • Pilgrim Nuclear Power Station (677 MW) – 1 unit (nuclear) • Additional retirements are looming Total 354 MW 37 MW 3,181 MW 4 MW 13 MW 637 MW 4,226 MW *Megawatts based on relevant Forward Capacity Auction (FCA) summer qualified capacity (NOTE: total includes full and partial generator Non-Price Retirement (NPR) requests for Capacity Commitment Period (CCP) 2013-2014 through CCP 2019-2020; does not include NPRs for demand response (DR) resources) Source: Status of Non-Price Retirement Requests; October 13, 2015 ISO-NE PUBLIC 9 For More Information… • Subscribe to the ISO Newswire – 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 • Download the ISO to Go App – ISO to Go is a free mobile application that puts real-time wholesale electricity pricing and power grid information in the palm of your hand ISO-NE PUBLIC 10