Prices plummet in ISO-NE capacity auction, raising questions about new generation plans
- ISO-New England completed its annual capacity auction last week, easily procuring needed resources at low prices for delivery in 2020 and 2021.
- The 11th annual auction closed with a system-wide clearing price of $5.30/kW-month, compared to $7.03/kW-month in the previous auction. The prices were the lowest seen in the auction since 2013, according to the ISO.
- The lower prices and ample reserves have allowed some to question if the region needs new generation. The Conservation Law Foundation argued the region's ample capacity proves Invenergy's planned 900 MW Clear River Energy Center in Rhode Island is unnecessary.
New England's grid operator easily procured the resources needed to ensure sufficient capacity from June 2020 through May 2021, a welcome change from just three years ago when the region came up short. But the auction results have some questioning if the grid now has all the power plants it needs.
No new large resources cleared the auction, but 640 MW of new energy-efficiency and demand response did. The grid operator needed to procure about 34,000 MW and wound up with more than 35,800 MW.
The New Brunswick interface closed in the sixth auction round, as opposed to the rest of the auction which closed in the fifth. The New Brunswick zone, which has excess capacity saw payments finalize at $3.381/kW-month.
The ISO said forecasted demand reductions from its forecast of behind-the-meter solar PV growth reduced the capacity target by 720 MW.
"The lower clearing price and surplus capacity are indicative of a market that works," ISO Vice President Robert Ethier said in a statement.
Ethier said supply shortfalls pushed up prices in previous auctions, after more than 3,000 MW of resources announced their retirements in 2013. "The higher prices have attracted new competition, which has helped lower prices while keeping the lights on in New England," he said.
In a post on the Conservation Law Foundation's blog, the organization's senior attorney said the auction results the Clear River gas plant is unnecessary.
"The ISO’s figures do not lie; they tell a very simple story," wrote Jerry Elmer. "Invenergy’s fracked gas and diesel oil power plant is just not needed, which is why the state’s Energy Facilities Siting Board should simply reject its application now and be done with the project for good."
The foundation and the town of Burrillville have filed with the siting board for rejection of the new power plant. A hearing is scheduled for Feb. 16, according to ecoRI News.
- RTO Insider ISO-NE Capacity Prices Fall 25%, Lowest Since 2013
- ecoRI News Reports conflict on need for new gas plant
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