By William Opalka
New England’s winter energy supply crunch could be worse in two years because the closure of the Brayton Point coal-fired plant and the potential retirement of the Pilgrim nuclear plant will come before additional natural gas pipelines can fill the gap.
“The winter of 2017-2018 is the one that worries me the most, because we will have lost Brayton Point at that point, [and] there’s a question mark about whether Pilgrim is available,” said CEO Gordon van Welie during ISO-NE’s annual “State of the Grid” media briefing last week.
About 4,200 MW of existing non-gas capacity — nuclear, coal and oil — is expected to retire by 2019. The 1,517-MW Brayton Point plant will close in early 2017 and the 680-MW Pilgrim plant will close no later than 2019, assuming the plant operates beyond its current fuel cycle, which ends in 2017. (See Entergy Closing Pilgrim Nuclear Power Station.)
The RTO’s performance incentives to make additional generation available won’t go into effect until mid-2018. Two proposed large-capacity natural gas pipelines, Northeast Energy Direct and Access Northeast, won’t be ready to serve New England until 2018 at the earliest.
“This will be a period of vulnerability,” van Welie added.
Non-gas generation is finding it increasingly difficult to compete in the energy market, van Welie said.
“During most of the year, the low price of natural gas is setting the wholesale price of electric energy, so power plants using more expensive fuels are getting squeezed financially. As a result, more and more non-natural gas-fired generators are retiring,” he said.
For the third consecutive year, the RTO will use its winter reliability program, which rewards dual-fuel gas/oil generators.
Meanwhile, higher capacity prices have attracted new investment. Capacity auction revenues have quadrupled from about $1 billion three years ago to $4 billion last year. Since auctions for those supplies are held three years in advance, customers have so far been shielded and will not see those price hikes for another year, he said.
Forward Capacity Auction 10, for the 2018/19 period, will be held Feb. 8. Van Welie said 147 new resources, totaling 6,700 MW of new generation, demand response and energy efficiency capacity, have qualified to participate.