January 31, 2017
Maine

An aging Maine power plant and nearby battery illuminate New England’s energy challenges

By Darren Fishell, BDN Staff | Bangor Daily News | bangordailynews.com

PORTLAND, Maine – Side by side on Cousins Island in Yarmouth, the past and future of New England’s electric grid operate simultaneously.

Beside NextEra’s 810-megawatt oil-fired power plant, the company has installed a 16.2-megawatt battery array that began operating in December 2016, according to a NextEra spokesman. The plant can store power for delivery to the grid at times of peak demand.

The battery array is the largest in northern New England. The oil plant is the largest in Maine. The two resources use some of the same lines to deliver their power to the grid.

And both represent the challenges New England’s power grid faces by relying heavily on natural gas for electricity generation, with pipelines that can’t meet both heating and electricity generation demand on the coldest days.

Gordon van Welie, executive director of regional grid operator ISO-New England, laid out those challenges Monday in a call with reporters.

When pipelines are not constrained, van Welie said low natural gas prices are pressuring other resources, such as nuclear and oil generators like Wyman Station, many of which have retired or are set to retire in the coming years.

Since 2013, 4,200 megawatts of non-gas generators have gone offline and another 6,000 megawatts (including Wyman Station) are at risk of closing, van Welie said. In total, the region has about 33,000 megawatts of capacity, between electric generators, electricity imported from outside the region and arrangements for large energy users to back down consumption.

The situation creates a balancing act for the grid operators, who are concerned about keeping enough generators in the mix to fulfill demand.

The answers van Welie outlined run from one end of Cousins Island to the other.

Battery storage can help meet peak demand and unleash renewable power when the wind isn’t blowing or the sun isn’t shining.

“But sufficient levels of new storage resources are unlikely to be developed in time to compensate for the upcoming generator retirements,” van Welie said.

That leaves the regional grid manager to look next door, to plants such as Wyman Station, for the near future, where van Welie said the region could be forced to enter contracts with older power plants, paying them just to keep their doors open.

“[O]perating conditions could force the ISO to adopt special reliability contracts to retain older resources with higher emissions,” van Welie said. “That would be a step back from wholesale market competition and a costly solution that would run counter to the states’ clean-energy goals.”

The New England states have toyed with the idea of subsidizing natural gas pipeline expansions. Maine was a leader in the effort but ultimately decided only to have electricity customers pay for natural gas lines if customers in other states were to share the cost.

Maine regulators are now considering whether it makes sense for those same customers to pay for natural gas storage facilities that could hold fuel for times of peak demand, but a consultant found it would likely not pay off.

“Despite the growing need, the outlook for additional energy infrastructure has dimmed,” van Welie said. “Siting energy infrastructure projects has proven to be difficult. State efforts to develop a regional funding mechanism to expand natural gas infrastructure have stalled, and several natural gas pipeline projects have been suspended.”

That situation, he said, makes it more likely that the grid operator will rely on older generators such as Wyman Station to stay online.

Van Welie said those natural gas infrastructure concerns are out of his group’s hands, as it “doesn’t have the authority to directly address the region’s fuel-security challenges,” but the region will need that capacity as part of a longer-term transition.

“Most urgently, New England needs to improve fuel infrastructure so it can reliably support the grid as it evolves toward a system powered by battery-backed renewables and distributed generation,” van Welie said. “Until that evolution is complete, the region will need resources like natural-gas-fired power plants.”

The situation is apparent from the types of energy generators asking ISO-New England for permission to connect to the grid. About half are powered by natural gas. A little less than half are powered by wind, where the stakes are high for Maine.

On land, 97 percent of that wind power is proposed for Maine, which still requires significant power line improvements to get electricity from wind-rich areas to population centers. The same goes for getting Canadian hydropower into the New England system.

“Connecting wind farms in northern New England or bringing hydro energy from Canada will require extensive transmission expansion, which will be costly and take years to build,” van Welie said.

Considering offshore wind projects proposed for the coast of Massachusetts, Maine wind projects make up 62 percent of planned wind power additions, as of January.

While ISO-New England doesn’t have direct oversight of the competitive market, van Welie said the organization has worked on developing new pricing systems he said can help preserve a competitive market he said is threatened by states giving long-term contracts to renewable power generators.

Generators with “guaranteed revenue streams could artificially suppress prices,” which van Welie said could deter investment from other generators. The answer, he said, is finding a way to build carbon emissions into prices on the competitive market.

“Most economists will say that putting a price on carbon is the most efficient way to achieve reductions in greenhouse gases and preserve competitive markets,” van Welie said. “Resources that emit more carbon would be more expensive and will eventually retire, leaving the field to lower-emitting resources.”

Van Welie said the ISO has helped to work on that with participants in the regional competitive market over the past year, exploring market rules he said “can preserve the markets and reliability while achieving the states’ environmental goals.”

URL to article:  https://www.wind-watch.org/news/2017/01/31/an-aging-maine-power-plant-and-nearby-battery-illuminate-new-englands-energy-challenges/