Despite the recent cancellation of several contracts with New England utilities for electricity generated by offshore wind facilities, industry participants said the region is well positioned to maintain grid reliability for most of the next decade, even as power demand surges and the grid transitions from fossil fuels.
According to S&P Global Global Market Intelligence data, the ISO New England region is scheduled to see 2,002 MW of new capacity installations in 2024, with wind accounting for 47% of the total, solar 25%, and battery storage another 24%. Natural gas, which produced 55% of the ISO-NE's generation last year, will account for the tiny remainder. The new capacity would more than make up for the 1,692 MW of scheduled retirements foreseen this year.
The biggest chunk of that new generation capacity comes from the 806-MW Vineyard Offshore Wind Project, which began generating power at the start of this year. On Feb. 22, Massachusetts announced that five of the project's 62 turbines had gone into service, supplying 68 MW of electricity to the grid. The project, developed by Avangrid Inc. and Copenhagen Infrastructure Partners P/S, is expected to reach full operation by year's end.
In a recent interview, ISO-NE spokesperson Matt Kakley said the grid operator has confidence it will not face a significant power shortfall through the end of this decade and into the early 2030s. "Our analysis has shown that in the short- to medium-term the region is in good shape," Kakley said. "What you're seeing right now in New England is really a pivot point in terms of the transition to a clean energy grid that the region is seeking."
Gas guarantees
By far the biggest retirement in New England this year will be the shutdown of units 8 and 9 at Constellation Energy Corp.'s gas-fired Mystic River Generating Station in Everett, Massachusetts, near Boston. Both of those generators, which have a combined capacity of nearly 1,700 MW, are scheduled to go fully offline by May 31.
Constellation in 2018 filed a request to shut down those units in 2021, but ISO-NE denied that petition, arguing that continued operation was needed for grid reliability. One reason cited by the grid operator was that the Mystic units served downtown Boston, and a lack of transmission connections to other power sources raised concerns over where that part of the city would get its power. According to Kakley, new transmission investments in the Boston area have resolved that issue.
Another concern for ISO-NE was the future of Constellation's Everett LNG Facility, an import terminal located adjacent to the Mystic plant. While Mystic has long been the LNG terminal's primary customer, the Everett facility also provides gas for heating and to other power generators. ISO-NE had worried that, if the Mystic units shut down, the LNG facility would also close, potentially threatening the region's energy supply during extreme winter weather.
That issue also now seems to be sorted out, with three utilities — Eversource Energy, National Grid PLC and Unitil Corp. — earlier this year signing six-year supply contracts with Constellation for gas from the Everett terminal. Those contracts now await approval from the Massachusetts Department of Public Utilities.
Looking further ahead, Ørsted A/S and Eversource say they plan to commission their Revolution Wind Offshore project in the waters south of Rhode Island in 2025, which will add 704 MW to the grid. Eversource has announced plans to exit its 50% ownership interest in Revolution Wind.
That new power resource is important, given that the region's electricity demand is expected to skyrocket over the coming decades, in large part due to increased electrification of home heating and transportation. In its 2024 Regional Electricity Outlook published March 18, ISO-NE said the region is also likely to move from being a summer-peaking to a winter-peaking system "sometime in the mid-2030s" due to heating electrification.
Wind, water woes
However, the future of other offshore wind projects in New England remains uncertain. Last year, developers cancelled their power purchase agreements with utilities for three projects — Park City Wind, with 804 MW of capacity; SouthCoast Wind, with a total of 2,400 MW; and the Commonwealth Offshore Wind Project, which would supply 1,232 MW — citing surging costs brought about by supply chain disruptions and Russia's invasion of Ukraine.
Adding to the sector's woes, last year PPL Corp.'s Rhode Island Energy, that state's largest utility, declined to sign a purchaes power agreement with Eversource and Ørsted for the planned 's 882-MW Revolution Wind 2 project due to what the utility called "affordability concerns." Revolution Wind 2 was the only project to submit a bid in Rhode Island's 2022 offshore wind solicitation.
Some of those projects could very well come back to life. Avangrid, the developer of Park City Wind and Commonwealth Wind, resubmitted reworked versions of those projects — renamed New England Wind 1 and 2, respectively — into a new, regional offshore wind solicitation launched by Connecticut, Massachusetts and Rhode Island, which closed March 27. SouthCoast Wind, which is being led by Shell New Energies US LLC and Ocean Winds North America LLC, did the same. Meanwhile, Ørsted and Vineyard Offshore, which is owned by Copenhagen Infrastructure Partners, submitted additional proposals. The three states say they hope to sign new contracts this fall.
But for now it remains unclear what the future for the revived projects will look like. Dan Dolan, president of the New England Power Generators Association, said in an interview that much depends on whether the developers simply rebid their earlier project proposals at a new price or also made technical changes.
Still, Dolan suggested that New England's grid should be able to take any offshore wind delays in stride. "At least for the next several years, no, I do not believe that that's going to pose a fundamental problem for reliability," Dolan said.
Dolan raised a concern about another source of electricity that New England has made a cornerstone of its energy strategy: hydroelectric power from Quebec.
According to ISO-NE, power from Quebec in 2023 accounted for about 9% of the region's net energy for load. However, the grid operator's internal market monitor said in its fall 2023 quarterly markets report, published Jan. 29, that imports of Canadian electricity had plunged compared with the previous year due principally to unusually low winter snow levels in Quebec. Hydro-Québec reported in February that its sales to all markets outside its home province fell 35% year over year in 2023, to 12.6 TWh.
Dolan also noted that Quebec's internal power demand is experiencing strong growth, raising doubts about its ability to keep supplying excess power to the broader region, particularly in winter, when the province's peak load is highest.
"There needs to be a long, hard look at the reliability impacts of reliance on Quebec," Dolan said.
Wholesale power prices in ISO New England are forecast to hit a peak of $149.55/MWh in December at the New Hampshire hub and $149.70/MWh at the West Central Mass hub, according to Platts M2MS data. In July, prices are forecast to hit $107.00/MWh at the New Hampshire hub and $107.85/MWh at the West Central Mass hub, and otherwise stay in a range between $40/MWh and $99/MWh.
Wholesale gas prices at the Algonquin city gates are expected to peak in December at $7.59/MMBtu, according to Platts data, after dipping as low as $1.80/MMBtu in May.
