The ISO-NE Consumer Liaison Group last week held its final quarterly meeting of the year where a virtual panel of regional energy experts wrapped up 2020 and attempted to cast a hopeful look to 2021 as New England continues its transition to clean energy.

Robert Rio, senior vice president of government affairs and counsel at Associated Industries of Massachusetts, served as moderator for “Clean Energy & Regional Markets: The New England States’ and Other Visions of the Future.” He said the RTO must provide reliable and cost-effective power to preserve the wholesale markets, “all the while navigating the political minefields that are the New England states.”

In October, ISO-NE confronted a joint statement from five of the region’s six governors (Connecticut, Maine, Massachusetts, Rhode Island and Vermont) calling for market design, transmission planning and governance reforms, saying the RTO is frustrating their efforts to reduce economy-wide greenhouse gas emissions. The New England States Committee on Electricity, which represents the collective perspective of the region’s six states in the NEPOOL stakeholder process, also released a vision statement that detailed specific reform measures. (See New England Governors Call for RTO Reform and States Demand ‘Central Role’ in ISO-NE Market Design.)

NESCOE Executive Director Heather Hunt said the “concepts and concerns” in the vision statement should not come as a surprise; “If there were easy solutions … we would have solved them by now.” Hunt said the governors’ joint statement “underscored their interest in better aligning our regional markets with the achievement of their collective and individual decarbonization goals and mandates.”

David Cavanaugh, vice president of regulatory and market affairs at Energy New England, said NEPOOL has worked with ISO-NE and NESCOE through the stakeholder process on the Future Grid Initiative, which includes a reliability study and potential pathways, the latter of which “looks to identify a framework that may facilitate the entry of state policy resources, such that we can avoid the double-pay issues folks are concerned about.”

‘Figuratively Screaming’

Doug Hurley, principal associate at Synapse Energy Economics, said for the past 16 years he’s spent his “time working with or directly for state agencies in most of the New England states on the cost of the wholesale electric grid and how to integrate clean energy into that system as quickly as possible.” He said states have been “figuratively screaming” at ISO-NE for years about the issues in the NESCOE vision statement and hopes the RTO recognizes its gravity.

RENEW Northeast Executive Director Francis Pullaro echoed Hurley’s comments, saying it is “an impressive accomplishment to get six states that have different constituencies and different interests from time to time, to be able to come together with a detailed vision.” He said the current power system was “designed for a different era” and the capacity market is “very costly to consumers.”

The capacity market “was put in place for a variety of reasons and some of those reasons have evolved over time, but basically it never contemplated a world of renewable energy at this scale, and you have now a lot of renewables coming in and not being able to participate in the capacity market and states wondering why [they are] paying for duplicative resources,” Pullaro said. “I think the old ways are just not suited for the future.”

Robert Ethier, ISO-NE’s vice president of system planning, said he looks forward to “figuring out with the states” what it will take to interconnect all the renewables they are seeking to contract over the next several decades.

“Clearly, that’s not going to be a one-shot deal,” Ethier said. “It’s going to be an evolving plan as we learn more, as additional contracts are signed, etc.”

According to Ethier, a 2019 NESCOE economic study looked at how much offshore wind could interconnect to the current grid.

“And the short answer is about 8,000 MW before things start to get really expensive,” Ethier said, adding that “2,500 to 3,000 MW” in Cape Cod “could easily cost $300-plus million to interconnect it to the existing system.”

“I think we all have to be cognizant of the fact that it’s going to be expensive to interconnect all these renewable resources,” he said. “The costs are going to go up dramatically once we sort of hit the limits of our current system, and we have to start building large new 345-kV lines or large underground lines or underwater lines. While all of us are going to work together in good faith, and we are going to try to develop things at least-cost, it will cost money to integrate all these renewables in a useful way.”

Pullaro said while ISO-NE has been successful with competitive markets to bring costs down, “what we’ve seen over the last 10 years or so in New England” is that states putting out their renewable energy goals to a competitive bid has also reduced costs.

Word from an ‘Energy Nerd’

When Rio posed a question about distributed energy resources (DERs), Hurley answered that “the challenges are numerous, and it would be hard to list all of them.”

“I would say first and foremost as part of this overall transition, it wasn’t what we originally envisioned when the markets and all the planning procedures were created,” Hurley said. “We’ve made a number of adjustments to those planning procedures and the markets to try to incorporate [DERs] better.”

He added that DERs provide “a whole bunch of opportunity” for participation by people who have small amounts of resources available to them like solar, wind or storage.

“It allows the opportunity for private businesses who are aggregators of those smaller resources together because even as much of an energy nerd as I am, I’m not going to try and enroll my solar panels directly into the ISO system, and put them in every day,” he said. “That’s just not a good use of my time. Even I would put them into an aggregation from something that some other company runs and put mine together with all my neighbors and then get that into the ISO systems in whatever way is appropriate.”

Finding the Pathway

Looking to 2021, Rio asked panelists what they think would be “really helpful” for the energy grid next year.

Cavanaugh, incoming chair of the NEPOOL Participants Committee, said New England has been struggling “with this tension of integrating state policy resources.”

“If 2021 was to have a success statement, it would be to find the appropriate pathways that balance investment, as well as state policy resources and achieving state goals, because you have to have a balance,” Cavanaugh said. “You still want to have the signals to draw merchant investment in the region because you need it, but you also need the ability to represent and respect state policy, so if ’21 could deliver anything, it’d be identifying a pathway that’s successful in achieving that goal.”

Either added that, “if we can achieve it, that would be fantastic.”

Hunt said that 2021 “is a year for a fresh look at what we’re asking the markets to do and how we’re governing how the markets operate.”

Pullaro said he could not help but look for sources of hope during the pandemic.

“So [my thought] for 2021 is to try and enjoy the fact that we’re at a point where we’re not arguing whether to transition to a clean grid, but how to do it,” he said.