Transcript Document

New England Resource Adequacy
Massachusetts Electricity Restructuring Roundtable
September 23, 2005
Gordon van Welie
ISO New England, Chief Executive Officer
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ISO New England Overview
• Real improvements to the region’s electric system
– Over $1.5B in long-needed 345 kV transmission projects in four
states have siting approval
• Massachusetts, Connecticut, Vermont, Maine
– Approximately $6B in private investment
– 30% increase in new, cleaner generation
• Over 9,000 MW of new generation
– Significant reductions in regional air emissions
– Wholesale market efficiencies: Savings  $700M/yr (2000-2004)
• Congestion cost reductions:  $170M/yr
– Single, independent point of control over management and outage
scheduling of regional transmission system have reduced congestion
costs  $40M/yr (2000-2004)
© 2005 ISO New England Inc.
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Ingredients of Successful Power System
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•
Four pillars of a balanced and reliable power
system:
1. Supply: Resources to meet peak demand
2. Transmission: Adequate power delivery system
3. Conservation and Demand Response:
Incentives for reduced use
4. Market Structure: Accurate price signals to
promote efficient operation and investment
•
Comprehensive planning provides a roadmap
to achieve the four pillars
© 2005 ISO New England Inc.
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Resource Adequacy: System Needs
Ten-Year Plan
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Planning For A Reliable Power
System: Regional System Plan (RSP)
• ISO-led regional system planning process since
2001
– Comprehensive assessment of power system needs
annually
• Ten-year planning horizon
• Information for market responses
– Regular stakeholder meetings
– Transmission plan to ensure a reliable system
• Backstop to market solutions
– Basis for transmission projects eligible for regional funding
– Independent analysis informs state siting
– Process recognized as one of best in nation (US DOE)
© 2005 ISO New England Inc.
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Recent Operational Experience
• New, all-time peak demand record set on July 27, 2005
(26,921 MW)
– Operable Capacity Margin of 739 MW
– Led to OP4 Actions 1-5, 7-10, and 12 in SWCT
• Load Relief actions estimated at 220 MW
– Led to high Real-Time LMPs in NEMA/Boston and CT
• Highest Saturday peak load on August 13, 2005
(24,038 MW)
– Had it been a week day, it would have likely been our all-time
summer peak
• Prices driven by:
– Weather and demand
– Fuel costs
© 2005 ISO New England Inc.
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Key Findings – RSP05
• Transmission upgrades must be completed on schedule
– Major 345 kV projects and other upgrades
• Greater Connecticut is short of resources now under highdemand conditions
• Additional capacity required to reliably meet system-wide
demand as early as 2008, and no later than 2010
• Addition of 1,100 MW of incremental quick-start resources
needed now (in Boston and Greater Connecticut) to satisfy CT
and systemwide needs
• Without increasing dual-fuel capability of gas-fired capacity,
system reliability is at risk
– Convert 400 MW by winter 2006/7; 250 MW more each year
through winter 2008/9; 500 MW more in winter 2009/10
© 2005 ISO New England Inc.
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Resource Adequacy: Transmission
Solutions
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RSP05 Projects in Massachusetts
• Northeastern Massachusetts (NEMA)/BOSTON
– 345 kV project under construction
– Voltage-control issues being addressed
– North Shore improvements under construction with long-term
plans being finalized
• Projects in other parts of Massachusetts
– Central Massachusetts Project and Auburn Projects under
construction
– Improvements made to Cape Cod load pocket (2nd Canal-Bourne
project) and studies for long-term reliability are underway
– Springfield and Western MA improvements are needed
• Reduce Springfield dependencies on single 345kV line and two
generators
• Reduce CT dependencies on Springfield capabilities
© 2005 ISO New England Inc.
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Transmission Solutions: Status of Major
Projects
• Progress since 2004
– 18 projects placed in service
– 36 new projects added
– 272 projects needed
• Major 345 kV projects
– Southwest Connecticut Reliability Project – under
construction
– Southern New England Reinforcement Project – under study
– NSTAR 345 kV Transmission Project – under construction
– Northwest Vermont Reliability Project – under construction
– Northeast Reliability Interconnect Project – permit
applications under review
• 2005 Transmission Project Plan Grand Total: $2.4 - $4.3 Billion
© 2005 ISO New England Inc.
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Resource Adequacy: Market Solutions
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Wholesale Market Plan Goals
• Efficiently price products and services needed to reliably operate
power system
• Enable efficient short-term consumption and production decisions
• Ensure sufficient long-run investment decisions
• Complete the wholesale market design
– Capacity Market reform
– Ancillary Services Market
– Fully integrate demand response
• Updated Wholesale Market Plan available in October 2005
© 2005 ISO New England Inc.
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Criteria for Resource Adequacy
Solutions
• Objectives
– Retain and attract appropriate resources to ensure reliability
in all areas of the region
– Reduce or eliminate Must-Run contracts that dampen
market signals
– Continue cap on generator offers in energy market that
protect against market power
– Ensure that consumers do not pay for bad investment
decisions
– Ensure resource availability in times of greatest need
– Encourage customer participation (demand response)
© 2005 ISO New England Inc.
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New England Needs Action
• Completion of Transmission Projects
• Reliability of Fuel Supply
– Dual fuel capacity in Boston and Connecticut now
– LNG supplies
• Assurance of Resource Adequacy
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Connecticut needs additional resources now
Connecticut and Boston need quick-start generation now
Region needs new resources between 2008 and 2010
Need market-based, long-term, resource adequacy solution
© 2005 ISO New England Inc.
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