Northern Pass rejection might make distributed energy more attractive

The New Hampshire Consumer Advocate, Don Kreis, writes an occasional column for the online news organization InDepthNH. His latest looks at the surprisingly quick rejection of Northern Pass by a state organization called the Site Evaluation Committee, which has to approve large-scale utility projects such as that huge transmission line from Quebec.

A lot of his column (which you can read right here) concerns contracts and rates and suchlike, but for energy wonks he brings up an interesting point:

One would hope that the SEC’s decision would point Eversource and other industry payers in the direction of more local and small-scale projects when it comes to needed improvements to our energy infrastructure.  Energy efficiency, demand response, micro-grids, battery storage, and small-scale generation facilities are the kind of infrastructure that does not require SEC approval, yet all count.

As a side note, ISO-New England, the folks who run the six-state power grid, released the results of what is known as the Forward Capacity Market auction for the years 2021-2022. In that auction power plants say “I’ll guarantee to be able to produce X amount of electricity whenever you need it during that period, as long as you pay me at least X dollars per kilowatt-month.” It’s a market system that signals future power-production capacity (hence the  name) and since New England is supposed to be entering a period of power bottlenecks, with nuclear plants and coal plants closing and not enough natural gas pipelines, you’d think that the auction costs would be rising – supply and demand, you know.

Instead, they are falling: $4.63 per kilowatt-month  across New England, compared to $5.30/kW-month in last year’s auction. Details are here.

What does this say about the grid in New England? Despite dire warnings, the folks actually in the business don’t see any electricity shortages within at least the next three years because most natural gas plants can burn oil in a pinch, when the natural gas is being taken for heating. So I guess the low bids really mean that they expect oil will stay cheap – not surprising, since shale wells mean the U.S. just hit record crude production.