Invenergy wants to build a $700 million fossil fuel power plant in Burrillville, Rhode Island, that will continue emitting large amounts of carbon pollution for as long as 40 years. In my prior blog, I addressed the most important issue presented by Invenergy’s proposal, climate change.
In this post, I address a separate issue: whether the proposed power plant is necessary in order to maintain the reliability of the New England electricity grid – that is, whether the plant is needed to prevent blackouts and brownouts. (A future blog will address ratepayer impacts.)
In its August 4, 2015 press release announcing its proposed plant, Invenergy said: “The project will allow ISO-NE to meet the current capacity shortage forecasted for the Rhode Island zone of the regional grid.” Two days later, an on-line utility industry newsletter called “Utility Dive” echoed that argument, quoting Invenergy as saying that the plant “will help the ISO New England to meet a capacity shortage forecasted for the Rhode Island zone.”
In order to understand how wrong this argument is, a bit of background is needed.
ISO-New England (or ISO-NE, as Invenergy referred to it in the quote above) is the Independent System Operator that both runs the New England electricity grid in real time and runs the wholesale electricity markets that set electricity prices paid by every ratepayer in New England. I have discussed CLF’s decades-long work with the ISO here and here.
The ISO runs separate markets for energy and capacity. For a relatively detailed explanation of how these two markets (energy and capacity) fit together, you can read this blog. However, I will briefly explain each market here:
The energy market is the market for actual electricity. The ISO runs the energy market in order to keep electricity running through wires to keep the lights on in our homes and offices today.
The capacity market is different. The ISO runs the capacity market in order to ensure that there will be enough electricity available in the future to meet our electricity needs then. Once a year, the ISO runs what it calls a Future Capacity Auction (FCA). In every annual FCA, the ISO procures enough energy capacity to meet the expected demand for electricity for a one-year period three years in the future.
Inverergy’s argument relies on an outdated scenario.
On February 4, 2015, ISO issued a press release about the results of its ninth Forward Capacity Auction (called, appropriately enough, FCA-9). The first sentence of the press release said: “New England’s annual auction to acquire the power system resources needed to meet future demand concluded Monday with sufficient resources for 2018-2019 in most of the region, but with a shortfall in Southeastern Massachusetts and Rhode Island.” On page 2, the ISO press release said: “Even before the auction started, there were not enough new and existing resources, combined, to provide the capacity needed in the SEMA/RI [Southeastern Massachusetts/Rhode Island] zone in 2018-2019.” The press release went on to say that only 7,241 MW of generation capacity were available in that SEMA/RI zone, but that 7,479 MW were needed; thus, there was a shortfall of 238 MW.
This SEMA/RI zone was what the ISO calls an “import-constrained zone.” In ISO jargon, this means that it is difficult to get electricity that is generated outside the zone into the zone because there are not enough transmission lines to do the job. As a result, it is necessary to generate electricity that is used inside the zone from power plants that are actually located inside the zone.
And not generating enough electricity inside the zone can be dangerous. It can cause blackouts and brownouts.
Then, as my CLF colleague Caitlin Peale Sloan discussed here, on October 13, 2015, the company that owns the Pilgrim nuclear power plant, in that very same SEMA/RI zone, announced that it would close the plant down. Scare headlines were now everywhere: the SEMA/Rhode Island zone already had a shortage of 238 MW (from FCA-9), and the zone was now going to lose an additional 677 MW of local generation capacity when Pilgrim closed.
This is the context for Invenergy’s argument that its proposed plant was needed: the ISO’s import-constrained zone for Rhode Island already did not have enough generation capacity and this bad situation was going to be made worse by the retirement of the Pilgrim nuclear plant.
Invenergy’s argument is just plain wrong. And that’s because the scenario I just described does not exist any more.
The ISO’s next Forward Capacity Auction, FCA-10, will start February 8, 2016. For FCA-10, the zones have been changed, and the previous SEMA/RI zone doesn’t even exist anymore! Instead, the old SEMA/RI zone was merged with the previous Northeast Massachusetts (NEMA) zone to create an entirely new zone called “Southeast New England” (SENE). And that newly created SENE zone (that includes all of Rhode Island) has plenty of capacity.
To put the matter very plainly: the “capacity shortage forecasted for the Rhode Island zone” that Invenergy touts just does not exist.
Let’s take a look at the figures. In the upcoming FCA-10 (starting February 8, 2016) the newly created SENE zone will require 10,028 MW of generating capacity within the zone. In the last auction, there were 7,241 MW actually in the SEMA/RI zone and there were 4,195 MW actually in the NEMA zone (which was much more than the 3,572 MW needed in that zone). Thus, in the last auction, there were 11,436 MW available in the SENE zone, or 1,408 MW more than would have been needed if that zone had existed then. Now subtract 677 MW that we are losing from the Pilgrim plant retirement, and you still have an excess of generating capacity of about 731 MW in the newly created SENE zone.
And that is a surplus of generating capacity even if the Invenergy plant is not built!
The broader context of overall generating capacity in all of New England is also relevant. In the upcoming FCA-10, ISO needs to get a total of 34,151 MW from all over the region. ISO has available 33,341 MW of existing generation capacity, plus another 6,720 MW of new capacity resources entering the market for this auction (from 147 separate projects). Thus, for all of New England, we have a total of 40,131 MW available, but we only need 34,151 MW. That’s a surplus of generation capacity in the upcoming auction of 5,980 MW.
If the Invenergy plant is not built, there would be no shortage of electricity in Rhode Island, no shortage of electricity in Southeastern New England, and no electricity shortage in all of New England.
We don‘t need the carbon emissions from this fossil-fueled power plant, and we don’t need the electricity from the plant to keep the lights on, either.
TAKE ACTION AGAINST THE INVENERGY PLANT! Click here to send an e-mail to Governor Raimondo telling her that you oppose construction of a new fossil-fueled power plant in Burrillville, that you know there is no capacity shortage in Rhode Island, and that we don’t need a new plant to prevent blackouts. Your e-mail will contain a link to this CLF blog post; please add your own comment to Gov. Raimondo to personalize your message.