Powelson ‘very nervous’ about long-term reliability in ISO-NE
New England’s grid operator issued a report in January outlining several worst-case scenarios should gas capacity grow.
The report concluded that heavy dependence on natural gas could result in blackouts if the grid comes under extreme stress. Renewable energy could help reduce that so-called “fuel-security risk,” but also compel more fossil fuel plant retirements, compounding the need for more LNG imports.
In short, the ISO worried that subsidized resources, such as wind and solar, could push unsubsidized resources offline and hurt entry of new ones.
The two-part capacity auction proposal, dubbed Competitive Auctions with Sponsored Policy Resources (CASPR), aimed to prevent subsidized resources from depressing prices in the capacity auction.
The newly approved plan will split capacity auctions into two parts. The first would work much like today, but in the second portion, retiring resources that earn capacity supply obligations could transfer those obligations to new, subsidized resources that do not have one. The existing resource — like an old oil plant for example— would then retire and pay the subsidized resource — such as wind or solar — for meeting the obligation.