Fuel Diversity for Electric Power
Generation in New England
David L. O’Connor
Commissioner
Massachusetts Division of Energy Resources
Electric Restructuring Roundtable
April 12, 2002
T:p-info/presentations/renewables and energy efficiency/fuel diversity041202
How to Evaluate
Fuel Diversity in N.E.?
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How does fuel use in N.E. compare to U.S?
What are recent trends in N.E. fuel use?
How should we measure fuel diversity?
What do forecasts show?
What public policies might influence fuel
diversity?
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U.S. Installed Capacity
Capability to Burn Natural Gas Increased
1994
Hydro
16%
Renewables
2%
Hydro
13%
Coal
39%
Nuclear
13%
Dual-Fired
19%
2000
Petro
Gas
6%
5%
Renewables
2%
Coal
38%
Nuclear
12%
Dual-Fired
18%
Gas
12%
Petro
5%
Source: EIA Annual Energy Review
3
New England Installed Capacity
Capability to Burn Natural Gas Increased
1994
Hydro
13%
Renewables
4%
2000
Coal
11%
Petro
17%
Nuclear
26%
Gas
1%
Gas-Petro
28%
Source: ISO-NE Celt Report, DOER
Renewables
4%
Hydro
13%
Coal
11%
Petro
21%
Nuclear
17%
Gas
4%
Gas-Petro
30%
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U.S. Capacity Factors
Nuclear and Coal Plants Are Used the Most
1.20
Normalized Capacity Factors
1.00
Nuclear
0.80
Coal
0.60
0.40
Gas
0.20
Petro
0.00
1998
1999
2000
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New England Capacity Factors
1.20
Nuclear and Coal Plants Are Used the Most
Nuclear
Normalized Capacity Factors
1.00
Coal
0.80
0.60
0.40
Gas
0.20
Petro
0.00
1998
1999
2000
Source s: EIA Powe r Annual, EIA Annual Ene rgy Re vie w, ISO -NE C e lt Re port, DO ER
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U.S. Generation
Natural Gas Use Increased, Others Decreased
2000
1993
Renewables
3%
Hydro
9%
Renewables
2%
Nuclear
20%
Nuclear
21%
Gas
9%
Hydro
7%
Coal
55%
Coal
52%
Gas
16%
Petroleum
3%
Source: EIA Power Annual
Petroleum
3%
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New England Generation
Natural Gas and Renewables Use Increased,
Nuclear and Oil Use Decreased
1993
2000
Renewables
Hydro
1%
Coal
4%
18%
Petroleum
21%
Nuclear
52%
Gas
4%
Source: EIA Power Annual
Renewables
Hydro
9%
6%
Coal
18%
Petroleum
16%
Nuclear
31%
Gas
20%
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Concentration of Fuels
Used for Generation
2000
Fuels United States New England
%
%
Used
31
52
Top 1
Top 2
72
51
Top 3
88
69
Source: EIA Power Annual, DOER
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Fuel Diversity in New England
• Generation from new gas plants has
increased fuel diversity in N.E.
• Increased gas use matches development of
nearby gas supplies and new pipelines.
• Capacity exists for greater use of several
fuels in response to fuel price changes.
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Fuel Diversity
Policy Considerations
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Reliability
Security
Price Level
Price Volatility
Environmental Impacts
Impacts on Other Sectors
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Tradeoffs Among Three Fuels
• Coal
– Lower, stable price
– Very reliable supply
– Greater environmental impacts
• Natural Gas
– Sometimes volatile price
– Generally reliable supply
– Modest environmental impacts
• Renewables
– Higher but stable price
– Less reliable supply
– Lesser environmental impacts
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New England Generation in 2005
Nuclear and Oil Use Varies with Fuel Prices,
Gas Use Increases Regardless
EIA Forecast
Renewables/
Hydro
14%
Renewables
7%
Hydro
9%
Coal
16%
Petro
7%
Nuclear
25%
Gas
38%
DOER Forecast
Coal
12%
Petro
18%
Nuclear
17%
Gas
37%
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Source: EIA Annual Energy Outlook 2002
Source: DOER Energy 2020 Forecast
Concentration Ratios
EIA Base Forecast
2005
Fuels United States New England
Used
%
%
Top 1
51
38
Top 2
71
63
Top 3
89
79
Source: EIA Power Annual, DOER
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New England Generation in 2010
Natural Gas at 43% Under Two Scenarios
EIA Forecast
Renewables/
Hydro
13%
DOER Forecast
Renewables
6%
Hydro
Coal
15%
8%
Petro
6%
Nuclear
23%
Gas
43%
Source: EIA Annual Energy Outlook 2002
Coal
12%
Petro
16%
Nuclear
15%
Gas
43%
Source: DOER Energy 2020 Forecast
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Concentration Ratios
EIA Base Forecast
2010
Fuels United States New England
Used
%
%
Top 1
49
43
Top 2
74
65
Top 3
89
81
Source: EIA Power Annual, DOER
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Public Policies That Might
Influence Fuel Diversity
• Air & water regulations for coal & oil plants
• Changes in ISO-NE rules for plant dispatch
• Maintenance of duel-fuel infrastructure
• Renewable Portfolio Standards
• Energy efficiency, demand response and
distributed generation
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