Power costs peak at $1860/MW
By Guy Page
The operators of the New England power grid issued a Power Caution Tuesday evening after an unexpected power failure during this week’s heat wave.
ISO-New England declares a Power Caution when it is concerned it may lack enough reserve power to provide electricity due to an unforeseen power shortage.
Tuesday night, ISO projected demand to reach 23,900 MW Thursday evening, which would mark the highest level of the season. Then an unexpected power failure – ISO didn’t say where, what kind of generation, or how much – occurred, leaving the region vulnerable to power shortages. However, demand reached “only” 23,340 MW, and grid operators were able to meet demand, ISO said in a June 20 statement.
Although the grid was able to cover demand Tuesday evening, it didn’t come without a price to ratepayers: for several minutes, the cost of electricity peaked at $1,860/MW, compared to the $32/MW price this morning (and more in line with most non-peak times). By contrast, the ‘peak’ cost on Wednesday evening was about $40/MW.
ISO-New England sources and manages the flow of electricity throughout New England. As overall demand increases due to renewable power electrification required by Vermont’s Global Warming Solutions Act and the Renewable Energy Standard bill that became law this week, the grid will be challenged to provide more total electricity while simultaneously being required to be more choosy about the renewable/low carbon status of power generation sources.
The renewable power industry claims that sufficient build-out of renewable generation (wind, solar) and battery storage will, with other more traditional power sources,
Reserve power is paid for by ratepayers, whose utilities through ISO-New England pay for generating stations to be “on standby.” In general, ISO-New England dispatches the cheapest and/or most low-carbon and efficient power sources first. Fast-dispatch, high-carbon generators (for example, oil-burning generators) are most likely to be held in reserve.