ISO-NE Warns Fuel Supply Issues May Threaten Winter Power System Reliability

New England faces a precarious fuel supply risk that could necessitate emergency actions if a severe prolonged cold snap hits the region this winter, ISO New England (ISO-NE) has warned.

The regional grid operator expects power demand will peak at 19,710 MW during average winter weather conditions of 10F, but if temperatures plunge below 5F, demand could jump to 20,329 MW. Peak projections from the 2021-2022 winter season assessment are about 2% lower than last year's forecast, and the National Oceanic and Atmospheric Administration (NOAA) predicts a milder than average winter, it said. New England's all-time winter peak record was set during a January 2004 cold snap when electricity usage reached 22,818 MW," the independent system operator (ISO) noted.

However, as Gordon van Welie, president and CEO of ISO New England, told reporters on Dec. 6, the grid operator is cautiously watching three variables that could put the region in a more precarious position than past winters and force the ISO take emergency actions, up to and including controlled power outages."

New England Natural Gas Generation Fuel Supply Uncertain

The first variable involves how much natural gas will be available for gas generators during cold weather," van Welie said. The region is prone to natural gas pipeline constraints when it experiences simultaneous demand for natural gas for heating homes and operating gas-fired power plants, he noted. Heating customers, who paid for the pipeline infrastructure, are served first and the remaining gas is available for electric plants. When pipeline gas isn't available, or when the price of gas is very high, the region uses other fuel sources, such as oil or liquefied natural gas [LNG]," he said.

Of specific concern is that current storage levels of oil and LNG are lower than in recent winters," he said. The region has yet to find a robust solution to bolster the supply chain for these fuels during inclement weather. The region has also not yet taken other mitigating measures, such as increasing the imports of hydroelectricity from Quebec," he added.

Van Welie noted higher prices for oil and LNG and pandemic-related supply chain challenges could also complicate deliveries into New England. This could limit the availability of these fuels if generators need to replenish their tanks this winter. Adverse weather conditions could further exacerbate these supply chain issues," he said. At the same time, emissions restrictions could also limit the amount of electricity that can be produced by dual-fuel or oil-fired generators, further straining the ability of these plants to operate," he said.

Extreme Weather Is Hard to Predict

The final variable-and the hardest to predict"- is the weather, van Welie said. While NOAA has predicted a mild winter, even a mild winter forecast does not preclude extended cold snaps. Such prolonged cold snaps would heighten the probability that emergency measures would have to be taken to keep the system from collapsing," he warned.

ISO-NE is ramping up its situational awareness" based on an analysis it conducted that compared expected consumer demand levels and system conditions with three historical winter scenarios. These include last winter, when the region experienced no extreme temperatures. The assessment also looked at the winter of 2017/2018, when, despite a forecasted mild season, a cold snap roiled power supplies across the Northeast and Mid-Atlantic, and New England saw average temperatures below normal for at least 13 consecutive days. Finally, ISO-NE's assessment also looked at the winter of 2013/2014, when the region's push toward gas-fired power collided hard with its historical pipeline constraints. During that event, the region experienced several cold-weather stretches of four or more consecutive days, including a stretch of 10 consecutive days at or below freezing," it noted on Monday.

The analysis suggested that weather similar to 2017/2018 may require limited emergency procedures, while weather similar to 2013/2014 may require the implementation of all available emergency procedures." The ISO notably also said that it would not expect these actions to be necessary if generators are able to adequately replenish their fuel supplies and if the system does not experience any unexpected generator or transmission outages."

I am not saying this to cause undue alarm at this early stage. Rather, by identifying and sharing the conditions under which the power system would be most challenged, we hope to prepare the region," said van Welie on Monday. If a worst-case scenario develops, the ISO, utilities, and government officials will need to act quickly to avoid an overall power grid collapse. Steps, such as asking for conservation of electricity and natural gas usage throughout the cold snap, could help minimize or avoid the possibility of more drastic actions."

Van Welie pointed to Texas' February 2021 debacle as an example of the elevated risk grid operators face during extreme weather events. In Texas, 48.6% of generation-52.3 GW out of the Electric Reliability Grid of Texas (ERCOT) grid's 107.5 GW total installed capacity-was forced out in outages and derates at the highest point due to the impacts of various extreme weather conditions. However, New England is not Texas," he said. Our system is better winterized, meaning the power plants, transmission lines, and other equipment needed to produce and deliver electricity can better withstand cold temperatures. However, as I noted earlier, we are concerned about the fragile energy supply chain to the region during extreme weather."

ISO-NE, like ERCOT and other grid operators across the nation, typically hosts a series of meetings with generators, industry, and government officials to review the upcoming season. During these meetings, officials typically outline supply and demand forecasts, as well as how the ISO will communicate throughout the season if challenging conditions materialize. Throughout the winter, ISO New England prepares and publishes an energy adequacy forecast on a rolling 21-day basis aimed at identifying potential energy shortfalls. This forecast is based on a weather outlook, projected fuel supply inventories and expected deliveries, expected production from wind and behind-the-meter solar resources, and a consumer demand outlook," said van Welie.

New England's Rapidly Evolving Power Profile Is Heavy on Gas, Variable Generation

Natural gas flows into the U.S. Northeast have long been constrained due to the need to ship gas long distances from producing regions in the South and Southwest. The system has traditionally run near capacity during the peak winter months.

A more pronounced concern is that ISO-NE's grid has changed at a rapid pace owing to shifting patterns in energy use and a rapidly changing resource mix to meet increased clean energy targets set by individual New England states. Variable energy resources, including of wind and solar, and natural gas generators, with operational and infrastructure limitations on their energy production, have replaced much of the region's baseload nuclear, coal, and oil resources that had on-site fuel storage.

ISO-NE says that during severely cold periods, it has primarily met its power needs through a combination of generators using natural gas from pipelines and LNG, rather than nuclear, coal, and oil fuels. However, the majority of New England natural gas generators do not have firm gas contracts and typically buy gas in the spot market. LNG deliveries to New England, which are influenced by global economics and logistics, can also be uncertain. These issues have been repeatedly flagged by the North American Electric Reliability Corporation (NERC) for their potential impact on power reliability.

Compounding New England's winter reliability is that environmental permitting for new dual-fuel capability-typically, natural gas and oil-is growing more difficult. Even when dual-fuel units have permits, their run times for burning oil may be limited to restrict their air emissions," ISO-NE notes in its November-issued 2021 Regional System Plan (RSP21).

The development of renewable resources, energy efficiency (EE), battery storage, imports, and continued investment in natural gas efficiency measures will help reduce these risks, but are unlikely to fully mitigate the risks associated with extreme weather events that limit renewable energy production and/or cause multiple, correlated contingencies," it adds. The ISO has initiated a project to update the modeling of low probability, high impact events, including those caused by severe weather. This will allow policy-makers, regulators, and the ISO to assess the likelihood of risks and then discuss whether and how to mitigate these risks," it says.

However, the grid operator's biennial regional report, which lays the foundation for long-term power-system planning in New England, concludes that overall, the grid is transforming to a cleaner, hybrid grid, characterized by low system emissions through the widespread development of renewable resources, including onshore and offshore wind generation and both grid-connected and distributed photovoltaics (PV)." Over the longer term, ISO-NE expects it will receive additional Canadian hydroelectricity imports to further boost reliability. It is also counting on new technologies to help it meet future demand, which it expects will expand given electrification of the transportation sector and home heating.

-Sonal Patel is a POWER senior associate editor (@sonalcpatel, @POWERmagazine).

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