Braintree Electric Light Department in Massachusetts plans to retire a power plant because of ISO New England’s new pay-for-performance capacity market rules.
At issue is Braintree Electric Light Department’s 72-megawatt, duel-fueled Potter II power plant. The 42-year-old power plant is an intermediate plant that needs a six-hour notice to come online, said William Bottiggi, the public power utility’s general manager.
Under ISO-NE’s new capacity rules, which took effect in mid-2018, plants are rewarded if they are operating during “scarcity events” and penalized if they aren’t, Bottiggi explained.
Currently, power plants must pay $2,000 per megawatt-hour if they aren’t operating or can earn that same amount for generation above their capacity obligation, as adjusted by what is known as the balancing ratio. On September 3, when it was hotter than expected and two major power plants tripped offline, New England faced its first scarcity event under the pay-for-performance rules.
The Potter plant, which ran for only 16 days last year, wasn’t online during the 2-hour event and was assessed a $300,000 penalty, Bottiggi said. Braintree Electric Light Department’s two simple-cycle, 58-MW Watson units, which can be online in 10 minutes, were operating and were awarded $160,000, he said.
The capacity performance rates are set to increase to $3,500/MWh in 2021 and $5,455/MWh in 2024, creating too much risk for the Potter plant, Bottiggi said.
The capacity rules will likely lead to a wave of retirements among New England’s oil-fired generators, according to Bottiggi.
Braintree Electric Light Department intends to use a new ISO-NE process that would allow a “public policy resource,” such as an offshore wind farm, to buy Potter’s capacity obligation for the 2023/2024 capacity year, Bottiggi said. The process is a way to incorporate state-supported resources into ISO-NE’s capacity market.
Bottiggi said if Braintree Electric Light Department is unable to offload the plant’s capacity obligation, a move that would earn the utility some revenue for a year, then Braintree Electric Light Department will take steps to retire the plant earlier.
Braintree Electric Light Department will have to buy capacity or build new resources to replace the Potter plant, Bottiggi said. However, the utility is focusing on reducing its peak load to lower its capacity payments, he said.
The utility, for example, in June installed a 2-MW battery that can discharge over two hours.
Braintree Electric Light Department has an 80-MW peak load but is required by ISO-NE to acquire an additional 40 MW of reserves. Reducing the peak load also lowers the reserve requirements, which can bring cost savings to the utility, Bottiggi explained.
The utility is also studying the possibility of setting up a 10-MW floating photovoltaic array on the Great Pond Reservoir in Braintree, according to Bottiggi.
Braintree, a Boston suburb, lacks the open space needed for a generating project, Bottiggi said, noting Braintree Electric Light Department has already installed solar panels on large roofs, a landfill and over a parking lot.
The reservoir, a drinking water supply that cannot be used for recreation, is the town’s biggest open space, according to Bottiggi.
The Braintree Electric Light Department in Massachusetts is using a grant provided by the American Public Power Association’s Demonstration of Energy & Efficiency Developments program to explore a solar power project that would float on a reservoir.
The 10-megawatt array of solar photovoltaic panels would occupy about 40 acres or about 25% of the Great Pond Reservoir in Braintree. The reservoir is actually the property of three towns – Braintree, Holbrook and Randolph – but the solar panels would be entirely inside Braintree’s town limits.