Despite concerns about future shortages of natural gas in winter, the latest forward-looking auction says New England will have more than enough electricity through 2023, including the first contribution from an offshore wind project in Massachusetts.
What is known as the forward capacity market auction generated so much interest, in fact, that the clearing price was the lowest in six years, according to ISO-New England, the group that oversees the six-state power grid. (This doesn’t mean retail electricity prices that you and I pay will go down, however, since this is only a portion of what constitutes the energy charge and doesn’t include anything in the distribution charge.)
In all, the auction found that 34,839 megawatts worth of supply is guaranteed to be available in 2022-2023 or else the power plants will face hefty fines. That is 1,089 megawatts (roughly the output of Seabrook Station nuclear plant) above what ISO-NE thinks will be needed even on the hottest day of summer.
Such a surplus drove down prices for the 13th capacity auction, which is designed to make sure that there aren’t looming electricity shortages. It had a clearing price of $3.80 per kilowatt-month across New England, compared to $4.63 in last year’s auction.
It included an obligation by Vineyard Wind, a wind project developing off the coast of Massachusetts, to produce 54 megawatts, replacing a power plant that will retire in 2022-2023.