1、 New England can achieve its clean-energy goals at the least cost, while keeping the power system reliable, by harnessing competitive market forces. 2020 Regional Electricity Outlook 2 From the Board Chair and CEO: The Clean-Energy Transition: How to Get There from Here 6 Focusing on State Goals: Ac

2、hieving Cleaner, Lower-Cost Electric Power 16 Focusing on Our Role: Planning, Innovating, and Enabling a Reliable, Clean-Energy Grid 26 Focusing on Energy Security: Reliably Operating a Future Power Grid with a High Penetration of Renewable and Energy-Limited Resources 34 Focusing on the Future: Sus

3、taining a Power Grid that Reliably Supports a Carbon-Free Economy and Society 38 ISO Metrics: Measuring ISO New Englands Performance, Accountability, and Transparency Our Mission Through innovation and collaboration, ISO New England ensures that New England has reliable, competitively priced wholesa

4、le electricity today and into the future. The companys engineers, economists, computer scientists, and other professionals fulfill this mission through three interconnected responsibilities: n Managing 24/7 operation of the regions high-voltage power grid n Administering the regions billion-dollar c

5、ompetitive markets for buying and selling wholesale electricity n Planning for the future power needs of 15 million New Englanders The ISO is an independent not-for-profit none of its board members, officers, or employees has any financial interest in any company doing business in the regions wholes

6、ale electricity marketplace. The Federal Energy Regulatory Commission (FERC) regulates the ISO. About This Report ISO New Englands unique role gives it an objective, birds-eye view of trends that could affect the regions power system. The Regional Electricity Outlook is one of the many ways the ISO

7、keeps stakeholders informed about the current state of the grid, issues affecting its future, and ISO initiatives to ensure a modern, reliable power system for New England. Please also see our Annual Work Plan at www.iso- for information on the ISOs major projects for the year to improve our service

8、s and performance. Contact ISO New Englands Corporate Communications and External Affairs teams at (413) 535-4309 for copies of this report. Visit www.iso- One Sullivan Road, Holyoke, MA 01040 2 From the Board Chair and CEO: The Clean-Energy Transition: How to Get There from Here Kathleen Abernathy

9、Board Chair Gordon van Welie President and Chief Executive Officer N ew England is unquestionably on a path to a clean-energy future. From large- scale offshore wind procurements to the smallest rooftop solar arrays, the New England states are turning to a wide range of renewable resources to fulfil

10、l their clean-energy goals. And now, as the states ramp up their goals to achieve up to 100% renewable resources in the electricity sector and move to decarbonize the entire economy in the coming decades, the question for us here at ISO New England has become: how do we get there from here? For more

11、 than a decade, ISO New England has been preparing for this transition. Through the creation of vibrant, competitive electricity markets, the ISO and New England stakeholders have brought about one of the cleanest, most efficient fleets of power generating resources in the country, achieved very low

12、 wholesale energy prices that reflect the efficiency of the market design, and facilitated a dramatic reduction in emissionsall while successfully maintaining reliable 24/7 bulk power system operations. While the path to decarbonizing the electricity industry is well underway, the journey to decarbo

13、nize the other sectors has really only just begun. As the transportation sector and the heating and cooling industry turn to carbon-free electricity, the ISO firmly believes that the region can achieve its clean-energy goals at the least cost, while keeping the power system reliable, by harnessing c

14、ompetitive market forces. The region currently does this using a suite of competitive markets the energy, ancillary, and capacity marketsthat attract and sustain the resources needed to operate the grid reliably and deliver economic and environmental benefits to the region. But, as the number of ren

15、ewable resources increase, the market architecture will need to be updated so wholesale prices remain competitive and all resources get paid a fair price for providing their products and services. We see the introduction of two sets of market innovations, the CASPR (Competitive Auctions for Sponsore

16、d Policy Resources) auction platform and the Energy-Security Improvements, as the next steps toward achieving the regions long-term, carbon-free goals. Where We Are Today: CASPR and ESI Market Mechanisms CASPR was designed as a solution that should, over time, enable a reliable and efficient turnove

17、r in New Englands power fleetmoving the power system away from fossil fuel resources to serving the regions electricity needs using In 2019, coal and oil-fired resources produced less than half a percent of New Englands electricity only 0.1% of New Englands electricity came from oil-fired power plan

18、ts and 0.4% from coal plants. And New England had the second lowest annual average wholesale energy price on record. 3 renewablesall done by achieving a fair, market-based price. In the coming years, we anticipate that, as they become more cost-competitive, renewable resources will enter the wholesa

19、le market directly and the need for CASPR will diminish. Carbon pricing would work to more quickly change the overall economics of all resources in the market, making renewable and low-carbon resources more cost- competitive than high-carbon-emitting resources. The ISO is ready to introduce such a m

20、echanism on the wholesale level; however, this will require support of the New England states or federal legislation. In addition to CASPR, the ISO and New England stakeholders are working on market enhancements called the Energy-Security Improvements (ESI) initiative. ESI is a critical market enhan

21、cement designed to keep the system reliable during energy-limited conditions, such as extreme cold weather. Furthermore, ESI will also provide the market structure needed as the New England system makes the change from fossil fuel to renewable resources that are inherently intermittent and may be en

22、ergy-limited during extended periods of inclement weather. ESI will introduce stronger, market-based compensation for electric energy and reserve services and will select the least-cost resources to provide electrical energy when called on by the ISO. ESI is expected to be in place by mid-2024. Toda

23、y, Tomorrow, and Beyond: Our Work Together Continues As we move forward in the coming years, New Englands wholesale markets must continue to adapt to the regions changing resource mix and the changing needs of its power system. This adaptation will be necessary because of the anticipated impact to t

24、he power system should the states fully decarbonize other carbon-based sectors. As the states plans become more formalized and the transportation and heating sectors decarbonize, they will turn to the regions power grid for electricity: to keep our plug-in electric vehicles moving and to keep For IS

25、O New England, a broadened scope for the regions power grid is expected to increase both the power system planning and operational complexityand this will drive a need for more investment in staff skills, training, and software development. 4 the temperature in our houses and businesses comfortable.

26、 As a result, the demand for carbon-free electricity will likely increase over the coming decades and the power grid will become even more important than it is today because every sector of the economy will be dependent on it. The states, stakeholders, and the ISO will need to continue to collaborat

27、e to understand what the period beyond 2030 may look like, including the forecasted demand for clean electricity from other sectors, and the likely market-based pathways to supplying this demand. Analyzing future pathways for decarbonization will also allow the region to have an informed discussion

28、about whether, and where, additional transmission investments will be required to enable the vast quantities of grid-scale renewable energy. ISO New England respects the environmental policy objectives of the New England states and believes that a strong, competitive wholesale market provides the be

29、st structure for achieving these objectives in a cost-effective and reliable way. By working with the states and other industry stakeholders, we together will determine if there are better market design solutions or needed adjustments to the markets. ISO New England is dedicating market-development

30、and planning resources in 2020, and beyond, to discuss potential future market frameworks that are consistent with state decarbonization goals, as outlined in the summary of our strategic plan presented later in this report. ISO New England has worked tirelessly for the past two decades to ensure th

31、e regions power system is there to serve New England and its consumers every daytoday, tomorrow, and for decades to come. We are proud of our accomplishments to date in ensuring the regions power system reliability through competitive wholesale markets, and we pledge to continue this dedication as t

32、he region transitions to a clean-energy future. We also know that, based on our history, collaboration with all industry and government stakeholders will be paramount to achieve this successful transition. The next phase of our regions energy journey has begunand we are excited by the prospects. Sin

33、cerely, Kathleen Abernathy Board Chair Gordon van Welie President and Chief Executive Officer 5 Focusing on State Goals: Achieving Cleaner, Lower-Cost Power New England restructured its electricity industry more than 20 years ago, driven by state and federal initiatives that were guided by the princ

34、iple that a reliable supply of competitively priced electricity is fundamental to a thriving society and economy. Specifically, the overarching goals of introducing wholesale competitive markets were to lower costs, encourage innovation, and shield consumers from unwise investments. 6 7 For decades

35、before restructuring, the regions utilities operated as vertically integrated, rate-payer-funded, regulated monopolies that generated, transmitted, and distributed electricity. Dissatisfied with investments that increased consumer rates while limiting funds for needed infrastructure, the federal gov

36、ernment, with support from the New England states, introduced wholesale markets where privately developed resources would compete with each other to provide the least-cost, reliable wholesale electricity supply, regardless of the fuel or technology used to generate the electricity. Through a coopera

37、tive effort, federal, state, and industry officials agreed to create ISO New England in 1997 as the independent administrator of the regions wholesale electricity markets and operator of the regional power grid. In this role, the ISO is bound by its regulator, the Federal Energy Regulatory Commissio

38、n, to allow participation in the highly competitive markets by all resources. The FERC and the ISO carry out laws created by Congress, which set US federal policy related to power. The ISO does not set policy and does not select the mix of resources being developed in the region. Congress has reserv

39、ed the right to site generation to the states. While the states were focused on markets driving efficiency and innovation, they also began introducing clean-energy incentives and emission-reduction goals, focusing first on reducing greenhouse gas (GHG) emissions from the electric power industry. Emi

40、ssions regulations work well with the wholesale markets by making higher-polluting power plants more expensive to operate and providing a reliable means for cleaner resources to come on line in their place. Over two decades, the market and policy approach has driven change in the direction the state

41、s have been seeking: around $16 billion in private investment in some of the most efficient, lowest-emitting power resources in the country, shifting investment costs and risks away from consumers, lowering wholesale prices, reducing carbon emissions, and enabling the transition to an even lower-car

42、bon system. This is evidenced by the following: 2000 2005 2010 2015 2019 Nuclear Net Imports Renewables HydroCoal Oil Natural Gas 13% 27% 14% 6% 6% 15% 19% 40% 25% 19% 7% 0.4% 0.1% 9% Lower-Emitting Sources of Energy Supply Almost All of New Englands Electricity Sources of Grid Electricity in New En

43、gland (Annual Net Energy for Load) Source: ISO New England, generation data, and Net Energy and Peak Load by Source Report In 2019, efficient natural-gas-fired generation, nuclear, other low- or no- emission sources, and imported electricity (mostly hydropower) provided roughly 99.5% of the regions

44、electricity. Focusing on State Goals 8 The Rapid Development of a Cleaner, Cheaper, More Efficient Power Fleet in New England When the wholesale markets opened to competition, private investors pursued the development of natural-gas-fired power plants because they used advanced technology that made

45、them run efficiently; were relatively inexpensive to build, site, and interconnect; and their lower carbon emissions compared to coal and oil helped the region meet state environmental policies. As nearby shale gas emerged as an inexpensive and plentiful fuel resource in the 2008 timeframe, natural

46、gas generators became the go-to resource for New England, clearing as the largest resource type in the market year after year. In contrast, aging coal-fired, oil-fired, and nuclear power plants have been closing largely because their operating, fuel, and environmental-compliance costs make them too

47、expensive to compete against lower-cost resources. Consumers have benefited from this least-cost resource mix created through competitive markets. Since 2013, roughly 7,000 megawatts (MW) of mostly coal, oil, and nuclear generation have retired or have announced plans for retirement in the coming ye

48、ars. Another 5,000 MW of oil and coal, which now run only during peak demand or periods of gas pipeline constraints, are likely to retire soon. (The regions remaining two zero-carbon- emitting nuclear facilities, Millstone and Seabrook, supply a quarter of the electricity New England consumes in a y

49、ear). Competition in the markets brought about this change at a faster pace than under the traditional industry model. Under wholesale markets, private companies have carried the risks of uneconomic investments, not utilities and their customers. A Major Reduction in Emissions from the Power System The shift to cleaner, more efficient generation and strong regional investment in transmission improvements to mov