New England has gotten federal approval for a first-in-the-nation type of power supply auction. It’ll let new renewable energy projects take over for old fossil fuel plants on the grid.
Once a year, the nonprofit grid operator ISO-New England holds an auction for power generators who want to supply energy for the region, starting three years out.
The Federal Energy Regulatory Commission, or FERC, decided this month that ISO can add a new auction to the process for next year.
ISO’s chief economist Matthew White says it’s designed to balance the impacts of outdated, fossil fuel-fired power plants, with the glut of new state-subsidized renewable energy projects.
“We can facilitate a market-friendly way for old obligations to get transferred to new obligations, and help the states meet their environmental objectives in the course of doing so,” White says.
For example: the new auction could let power plants such as New Hampshire’s Schiller and Merrimack Stations put their long-term supply commitments up for sale.
Then, new renewable developments, such as a large wind farm or a hydro-fueled project like the proposed Northern Pass, could bid on how much of that same long-term power they wanted to supply.
ISO will use the auction to match each renewable offer with an older plant selling off its obligations, and facilitate the sale in what White calls a transparent way.
He says all this should help those older plants retire sooner, further reducing greenhouse gas emissions in New England without destabilizing its power supplies or prices.
White says ISO-New England appears to be the first grid operator in the nation to request and receive FERC approval for this type of auction.
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