ISO New England unveils new initiatives to enhance winter reliability
- ISO New England is rolling out two new initiatives to help ensure winter reliability, including a 21-day look-ahead energy forecast that details fuel supplies in the region, primarily coal, gas and oil.
- The second change will be made in the ISO's daily energy market, where it will provide generators with an opportunity cost estimate that can be incorporated into its offer price for the next day, helping them to conserve fuel for when it is needed the most.
- Last year, a two week cold snap forced New England to rely on more polluting onsite oil supplies, something the region kept in mind as it developed its energy security plan this year.
New England has been looking for market-based solutions to winter difficulties, as its reliance on natural gas has at times put the grid operator in a tight spot. Going into the 2018-19 season, the ISO hopes providing the market with more information will help keep generators running reliably.
Beginning Nov. 26, the ISO will begin publishing its energy forecast that will include fuel inventories as well as possible limitations on generator availability, including emissions restrictions.
The ISO said the forecasts will describe expected conditions, "from normal to conditions requiring declaration of an energy alert or an energy emergency."
And in the daily energy markets, the grid operator said it will begin providing generators with an estimated opportunity cost that can be incorporated into its offer price for the next day.
"Each morning, the next day's opportunity costs will be calculated for each generator and provided to resource owners," the ISO explained in its announcement. "The opportunity cost represents the net revenue or profit that would be lost if the generator used up its fuel early in lower-priced hours, rather than preserving the fuel to generate during later, more profitable hours when prices are expected to be higher."
At times during the 2017-18 winter, the ISO was forced to tell generators to preserve fuel by not operating. The grid operator wants to avoid those out-of-market actions by arming generators with more data.
The ISO is hoping that by giving generators information that allows opportunity costs to be incorporated into daily offers, it will "provide a market-based approach that improves reliability and system cost-effectiveness by preserving fuel for the times when it will be needed most."
Earlier this year, a report concluded the ISO New England's biggest challenge to reliability is the lack of fuel infrastructure to supply gas-fired generators, emission restrictions on oil-fired generation and the reality that some older power plants may be forced to retire before they can be replaced.
Follow Robert Walton on Twitter