(Bloomberg) — Oil has replaced natural gas as the main fuel for power plants in New England, a key switch that shows the grid is doing its best to keep the lights on in the face of a hurricane. winter storm.
Most read from Bloomberg
ISO New England data shows the six-state grid is dependent on oil for at least a third of its electricity, and at times as much as 40% on Saturday. Natural gas is provided at least 15% by mid-afternoon.
The region typically only uses oil to meet demand on the hottest and coldest days of the year as a backup. Entering the evening rush hour, New England issued a series of grid warnings warning of potential shortages of electricity storage and asking market members to voluntarily conserve electricity.
The operator then said it was trying to buy emergency supplies from market participants or neighboring areas. The situation was so tense that prices spiked to more than $2,000 for a megawatt hour on Saturday night. This time last week, spot strength was in the $30 range.
While New England has always been able to operate with limited supply this winter, the reality is that oil has already surpassed gas, nuclear and hydro – often the cheapest and largest sources of energy on the grid. This power – shows how severe can be predicted at the end of the season.
The storm sparked a debate about the energy transition: how to ensure there are enough power plants online to meet heating needs in extreme conditions. And when an operator uses fossil fuels as dirty as oil to prevent an outage, that adds another level of tension to the debate.
On the 13-state grid in the Eastern US operated by PJM Interconnection, gas is a priority, but supply constraints also contribute to a large number of unexpected outages leading to outage warnings. alternating electricity.
Fossil fuels have gained market share over other grids. After the wind stopped in Texas on Friday, gas accounted for 73% of electricity production that night, and coal made up most of the rest. Coal also gained market share in the Central US grid operated by Independent System Operator Midcontinent.
–With support from Brian Eckhouse.
Most read from Bloomberg Businessweek
© 2022 Bloomberg LP