Market Response to Winter 2013-2014
Dupont Group Energy Summit
New England Power Generators Association
Carol J. Holahan, Esq.
October 5, 2015
Who is NEPGA
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The trade association
representing competitive electric
generators in New England
Our member plants represent
25,000 MW – or 80% – of all
New England generating
capacity
Our core mission is to promote
sound energy policies which will
further economic development,
jobs & balanced environmental
policy
NEPGA is a regional trade association representing a diverse portfolio of plants,
including natural gas, oil, coal, hydro, nuclear, and other renewable resources.
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PAY FOR PERFORMANCE: KEY ELEMENTS
• New capacity market design that first took effect in FCA 9,
corresponding to the June 1, 2018 – June 1, 2019 capacity
delivery period.
• Intended to incent resources to make the capital and O&M
investments necessary to improve resource performance.
• Resources that clear the base Forward Capacity Auction will
be penalized if they fail to deliver during times of system
stress, with no excuse for non-performance.
• A resource-neutral structure that allows all resources to
compete.
MARKET RESPONSE-- INVESTMENT
• INFLUX OF INVESTMENT CAPITAL INTO THE REGION
AS A RESULT OF THE OPEN, COMPETITIVE MARKET
STRUCTURES IN PLACE
• CURRENTLY MORE THAN 90 MARKET-BASED
PROJECTS TOTALING APPROXIMATELY 1,300 MW
PENDING WITH ISO-NE
• APPROXIMATELY 8,500 MW OF NEW RESOURCES
WERE QUALIFIED FOR THE MOST RECENT FORWARD
CAPACITY AUCTION
Generation Investments
• Capacity Auction Responses – 1,700 MW of new plants
have cleared in recent capacity auctions beginning
delivery in 2017 – 16,000 MW of new plants have
expressed an interest in next auction
• Interconnection Queue – Over 13,000 MW currently in
ISO-NE interconnection queue, only 6,000 MW in 2014
• We’ve Done This Before – In the years following
restructuring over 13,000 MW of new merchant
generation was built in New England
SOME EXAMPLES OF NEW GENERATION
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EXELON—MEDWAY, MA—195 MW
FOOTPRINT—SALEM, MA—700 MW
CPV—OXFORD, CT—700 MW
LS POWER—WALLINGFORD, CT—150 MW
EMERA—TIVERTON, RI—22 MW
NRG–CANAL, SANDWICH, MA—330 MW
DEEPWATER WIND--BLOCK ISLAND, RI--30 MW
INVENERGY—BURRILLSVILLE, RI—900 MW
The Markets Today
• Tight Supply – Power plants being retired, new plants
being built and concerns of natural gas supply infrastructure
• Winter Volatility – Following price spikes in 2013/2014,
major influx of LNG and improved generator performance
drove 2014/2015 winter price reductions
• Changing Market Design – FCM Pay-for-Performance and
major energy market pricing changes
The Markets Today
• Limited Demand Growth — Increase energy efficiency and
demand response programs limiting load growth
• Environmental--Carbon Mandates – State environmental
regimes raising questions on future supply mix and increase
in renewable energy requirements
• Siting—Regulatory Uncertainty – Protracted and
expensive process for siting of any new generation facility
• Technology and Innovation Driving Market –
Developments with storage and other technologies will
affect market
Questions?
www.NEPGA.org
Follow us on Twitter – @_NEPGA
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