Fuel Diversity for Electric Power Generation in New England

1
Fuel Diversity for Electric Power Generation in
New England

• David L. OConnor
• Commissioner
• Massachusetts Division of Energy Resources
• Electric Restructuring Roundtable
• April 12, 2002

Tp-info/presentations/renewables and energy
efficiency/fuel diversity041202
2
How to Evaluate Fuel Diversity in N.E.?

• 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?

3
U.S. Installed Capacity
Capability to Burn Natural Gas Increased
Source EIA Annual Energy Review
4
New England Installed Capacity
Capability to Burn Natural Gas Increased
Source ISO-NE Celt Report, DOER
5
U.S. Capacity Factors
Nuclear and Coal Plants Are Used the Most
Nuclear
Coal
Gas
Petro
6
New England Capacity Factors
Nuclear and Coal Plants Are Used the Most
Nuclear
Coal
Gas
Petro
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U.S. Generation
Natural Gas Use Increased, Others Decreased
Source EIA Power Annual
8
New England Generation
Natural Gas and Renewables Use Increased,
Nuclear and Oil Use Decreased
Source EIA Power Annual
9
Concentration of Fuels Used for Generation
2000
Source EIA Power Annual, DOER
10
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

• Reliability
• Security
• Price Level
• Price Volatility
• Environmental Impacts
• Impacts on Other Sectors

12
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
Source EIA Annual Energy Outlook 2002
Source DOER Energy 2020 Forecast
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Concentration Ratios EIA Base Forecast
2005
Source EIA Power Annual, DOER
15
New England Generation in 2010
Natural Gas at 43 Under Two Scenarios
Source EIA Annual Energy Outlook 2002
Source DOER Energy 2020 Forecast
16
Concentration RatiosEIA Base Forecast
2010
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