Report: Solutions to New England's Future Power System Needs Reflect Tradeoffs among Ratepayer Costs, Risks, and Regional Climate Policies
November 18, 2015
New England's current electricity market structure is well suited to maintain power system reliability in winter months through at least 2030, according to a report conducted by Analysis Group Vice President Paul Hibbard and Manager Craig Aubuchon. The report, "Power System Reliability in New England: Meeting Electric Resource Needs in an Era of Growing Dependence on Natural Gas" (November 2015), was conducted to provide an independent assessment of the region's power system, on behalf of the Massachusetts Office of the Attorney General.
Specifically, the study reviewed system conditions through 2030 to compare forecasts of the need for gas-fired generation with forecasts of available natural gas supply to estimate potential deficiencies in both "base case" and "stressed system" scenarios. The authors found that "under the base case analysis, power system reliability can and will be maintained over time, with or without additional new interstate natural gas pipeline capacity," but that "under the stressed system sensitivities we modeled, power system reliability deficiencies emerge by the winter of 2024/2025."
The authors then identified several alternate solution sets to meet these deficiencies, and evaluated these sets based on impacts to reliability needs, electric ratepayers, and greenhouse gas (GHG) reduction obligations. Among the key findings from these solution sets:
- Dual-fuel and/or liquefied natural gas (LNG) solutions, which are most likely during peak demand under current market conditions, would meet demand but fail to meet GHG emission reduction goals
- Additional natural gas pipeline capacity solutions would address system deficiencies and generate price benefits, but would require up-front and long-term ratepayer commitments and fail to meet GHG emission reduction goals
- Energy efficiency, demand response, and renewable energy solutions would address system deficiencies and GHG reduction goals, while mitigating ratepayer cost risks
The authors note that "solution sets that continue our growing dependence on natural gas for electricity generation do not appear sustainable relative to our region's and our nation's evolving GHG emission reduction requirements and goals. Reliability solution sets that reduce GHG emissions provide an incremental economic benefit by potentially lowering the cost of future compliance strategies. In contrast, solution sets that fail to do so could require more significant investments at a later date."
The release of the report has been covered in several media outlets, including the Boston Globe, Commonwealth Magazine, and MassLive.
Read the report
Read more about the study