New England is in the midst of a radical transformation in how the region consumes and produces electricity.
Decarbonizing the economy means residents will rely on the electric grid to charge their vehicles and heat their homes and businesses—and it means clean, renewable resources must supply that power. New England’s clean energy transition has been underway for years, and it is accelerating. Power sector emissions have fallen substantially over the past two decades as more efficient and more cost-effective resources have replaced older power plants. Meanwhile, the electrification of the heating and transportation sectors will drive significant increases in consumer demand.
As we stand at an inflection point on this journey, increased focus and urgency are warranted, particularly regarding questions about maintaining system reliability. In the past three years, four out of seven ISOs and RTOs in the U.S. have resorted to controlled outages when extreme weather led to limited energy supplies.
ISO New England has identified four pillars critical to a reliable clean energy transition. We are working to ensure the strength of each of these pillars through our three critical roles of power grid operation, market administration, and transmission system planning—but success is a shared responsibility, and it will require increasingly close coordination among all stakeholders.
Policy Drives Changing Patterns
The New England states have set aggressive targets to increase renewable energy resources and reduce greenhouse gas emissions to nearly zero by 2050.
Today, almost all large-scale renewable projects are developed through state-sponsored long-term contracts, which are ultimately funded by ratepayers. State policies and programs are also driving the rapid growth of energy efficiency, as well as the adoption of electric vehicles and air-source heat pumps.
Patterns of consumer demand will shift substantially in an electrified economy. While air conditioning currently drives the highest summer peaks in electricity demand, electric heating will eventually push those levels much higher in winter. Under certain scenarios, peak consumer demand could rise to 57 gigawatts (GW) by 2050. This is roughly two-and-a-half times the highest winter peak ever recorded, and about twice the New England grid’s all-time high of 28.1 GW, set during a heat wave in 2006.
Four Pillars for a Reliable Transition
Clean energy resources are poised to power this future grid, with wind, solar, and battery facilities already accounting for more than 95% of the resources seeking to connect to New England’s transmission system. A grid powered primarily by renewables will rely upon four interconnected pillars:
- Clean energy resources capable of generating a significant amount of electricity must be built to satisfy the region’s rapid growth in demand.
- Balancing resources—which can include generation, storage, and demand response—must be available to mitigate gaps in supply. These resources also provide essential reliability services such as voltage and frequency support.
- Energy adequacy is crucial for the safety and security of the region’s residents. The power system must have access to sufficient fuel supplies and other energy inputs, or sufficient demand response and conservation, particularly during prolonged periods of severe weather.
- A robust transmission system must be in place to deliver electricity, often over long distances, from renewable resources to consumers.
Challenges on the Horizon
A weakness in any of these pillars will undermine the overall structure, and threaten the success of the clean energy transition.
The region needs a large influx of clean energy resources to meet the states’ goals for decarbonizing a grid that must supply twice as much energy as today. While there has been substantial investment in renewable resources, the buildout is not proceeding quickly enough. Siting and permitting issues have stalled or delayed projects, as have supply chain snags and increasing costs.
As our dependence on electricity produced by the sun and wind grows, so will the need for resources that can balance ebbs and flows in generation from these variable resources. Right now, this pillar’s primary vulnerability is the premature retirement of power plants that can provide balancing energy. Insufficient investment in balancing resources is a longer-term risk.
Energy adequacy remains an area of particular concern. Some threats to this pillar—such as natural gas pipeline constraints and a fragile fuel supply chain subject to volatile, global market forces—are rooted in the interdependent but separate nature of the gas and electric systems. There is very little coordinated planning of the gas system to meet the specific needs of the electric system. In the future, long-duration storage and other new technologies will play a greater role in ensuring energy adequacy. For now, the natural gas system remains the region’s single largest energy input.
The transmission system is sufficient for today’s needs, but building a network of substations, high-voltage lines, and underwater cables to support tomorrow’s demand requires significant investment. While the ISO’s planning processes help facilitate investment, bringing these plans to life requires collaboration and agreement from state and federal decision-makers on where to build these components and how to pay for them.
These considerations point to New England’s need to overcome barriers to siting and building infrastructure. The region must also develop a plan to replace natural gas as the primary balancing energy source. Meanwhile, we must retain existing infrastructure, and stabilize fuel supply chains, until enough clean energy is available to meet most consumer demand.
A Shared Path Forward
New England has vast renewable energy potential. Harnessing that potential—and achieving the states’ decarbonization goals while maintaining reliability—will require significant investment and creative, collaborative problem-solving.
ISO New England continues its work to design markets that adhere to economic principles and procure reliability services from all resources. These markets must also ensure the bulk power system has sufficient balancing resources to maintain day-to-day reliability. In addition, the New England states are considering new market structures and incentives to spur investment in renewable resources. The ISO’s work also continues in the realm of transmission system planning, through the development of a long-range transmission plan in conjunction with our state colleagues. And, we continue to conduct engineering and economic studies that help inform public policy.
Assuring energy adequacy is New England’s largest unsolved problem. The question boils down to how much insurance the region wants to buy to protect against supply shortfalls during long-duration, extreme weather events that compromise the power system’s energy inputs. Short- and medium-term steps involve stabilizing the supply chain for New England’s gas imports; long-term efforts involve transitioning to other clean, high-density energy sources to fill energy gaps when weather-dependent resources are not available. Each timeframe requires regulatory action at the state and/or federal level.
The engineering and economic realities of the clean energy transition involve addressing many challenges. Some are within the scope of the ISO’s responsibilities and authority. Others call for state action. The urgent need for regional solutions to shore up energy adequacy, as well as a clear process on public policy transmission planning—including procurement processes, cost allocation, and siting—cannot be overstated.
State and federal policymakers, the energy industry, and the ISO must now make decisions that will chart the path over the next several decades. The clean energy future is within reach. But it will require all industry stakeholders to be realistic about what it will take to get there, and to work together to make it happen.
Gordon van Welie
President and Chief Executive Officer, ISO New England