New England Energy Supply Challenges
It’s not hard to see that powering New England is challenging. Between climate change and the volatile natural gas market, electricity rates may continue to spike higher and higher. The Federal Energy Regulatory Commission (FERC) held a forum in September to discuss New England’s power problems.
New England’s key energy problem is that it relies on natural gas to generate electricity. The region went from making 15% of its power from natural gas in 2000 to 53% in 2021. During that time, oil and coal generation has all but disappeared, dropping to below 1% in that same time frame.
Natural Gas in New England
But why is the natural gas market so important? And how does it affect New England states?
First, consider CT’s energy profile. Like other New England states, CT does not produce any natural gas. Gas suppliers in other states natural gas used for electricity through pipelines. These often work to capacity during the winter.
During mild winters, there is usually enough natural gas to cover demand. But this isn’t always true during harsh winters. And when demand outpaces supply, natural gas prices rise. And electricity rates can rise as well.
Next, Russia as one of the world’s largest natural gas providers. The war in Ukraine has led to sanctions against Russia. These sanctions make it harder for Russia to export its natural gas, which reduces global supply. And this leads to U.S. prices climbing even higher. The Providence Journal warns rates in New England not only could likely rise, but demand could cause rolling blackouts.
But what can New England do about the volatile energy market?
New England’s Energy Supply Question
It’s clear that New England has to decrease its natural gas reliance. And current decarbonization efforts are pushing New England states towards that goal.
For instance, the Inflation Reduction Act promotes renewable energy development with attractive tax cuts. And this could make green energy more affordable. But these are long-term goals that may not be complete for at least another decade.
It may be too late to prevent rate hikes for this winter. But discussion before the FERC forum did point to some potential short term solutions.
For example, Utility Dive discussed ISO-NE’s idea of an “energy reserve” based on stored LNG. Though an expensive proposal, it could help supplies problems and prevent the need for rolling blackouts.
FERC Takes on Energy Supply Problem
The FERC forum helped highlight the biggest issues. While we may soon see future solutions using green energy, this winter will still prove challenging. Connecticut electric customers could face a hard winter.
You can keep up with the news that affects your bills at https://www.ctenergyratings.com. You can also shop for great plans and find ways to save money on lower electricity rates.