Introduction

At the ISO, our talented workforce is striving to ensure New England’s grid is prepared to provide the region with clean, reliable, cost-effective electricity today—and throughout our journey to the clean energy future.

New England’s electric power grid is undergoing a tremendous transformation. Public policy aimed at fighting climate change by decarbonizing all sectors of the economy is ushering in a new era in our energy history. This era will be marked by rapid and significant change. Over the next 20 years, we expect that renewable resources will displace natural gas as the main source of electricity generation in the region—just as natural gas displaced coal and oil generation beginning 20 years ago.

Managing the region’s electric system throughout this transition requires ISO New England to perform a large-scale balancing act. Our highly skilled, growing workforce is planning for the future grid from decade to decade, and managing today’s grid minute by minute. The ISO balances myriad priorities—including policy goals, business interests, and cost—as we work to ensure the reliable supply and delivery of competitively priced wholesale electricity for all New Englanders. Successfully realizing our greener future will require a similar balance of critical priorities from the region’s energy stakeholders and policymakers. We all have a role to play in solving the challenges of the clean energy transition.

The ISO’s independence positions us to objectively coordinate, evaluate, and analyze power system information. Of all those studying the regional grid and its future, we are the only organization that also has ultimate responsibility for ensuring the reliability of the bulk power system through this era of rapid change.

The push to eliminate carbon emissions is driving electrification of the heating and transportation sectors, which will result in a sharp increase in the region’s demand for electricity just as the grid is incorporating huge amounts of intermittent, weather-dependent resources. At the same time, technology at a scale needed to power the grid solely with carbon-free resources hasn’t arrived yet. Therefore, our studies have shown, some amount of flexible, dispatchable resources—whether they are carbon-emitting or not—will continue to play a role in filling supply gaps and ensuring the reliable flow of electricity we’ve come to expect and rely on.

This is just one of the challenges the clean energy transition presents to the design and administration of the wholesale electricity markets: how to incentivize the resources and reliability services needed to balance the system in the future. Sending the right signals to attract the disparate set of resources the region will need requires thoughtful consideration, and we continue to explore potential market structure changes that could help us better meet the needs of our changing grid.

At the same time, it is increasingly imperative for the energy industry, affected communities, and siting bodies and policymakers to overcome obstacles that have kept some projects from coming to fruition. This is an issue not only for new generation, but also for transmission infrastructure. As our grid incorporates massive amounts of wind and solar power, the region’s high-voltage transmission system—the “electricity highway”—will play the crucial role of carrying electricity from the locations where it’s generated to the load centers where it’s consumed. Meanwhile, the region’s distribution system (which does not fall under the ISO’s jurisdiction) will need upgrades to ensure these “local roads” can deliver that electricity safely and reliably to consumers, requiring investment from the states and local utilities.

The shift from dispatchable, centralized generation to a larger number of resources that are more geographically dispersed will increase the operational complexity of our electric system, impacting everything from how and when energy is generated to how it’s transmitted safely across the region. At the ISO, where we have successfully operated and planned the region’s power system and administered the wholesale electricity markets for more than 25 years, we’ve distilled our understanding of what New England needs to support the rapidly approaching clean energy future into four pillars:

1. Significant amounts of clean energy resources
2. Sufficient balancing resources to ensure reliability
3. Energy adequacy via a reliable fuel supply chain or energy reserve
4. A robust transmission system

These pillars help us communicate how well the region is prepared for an electric grid powered primarily by renewable resources. In this report, we’ve assigned each pillar a current assessment based on its relative health and readiness to meet the needs ahead. Green indicates a high level of readiness, yellow indicates some strengths as well as opportunities, and red signals significant challenges. Because this report provides an assessment of one moment in a years-long journey, each pillar is also assigned a “trending” status to provide insight into our expectations for the future.

We provide this Regional Electricity Outlook to help the region’s energy stakeholders understand what is needed to reach the states’ decarbonization goals while maintaining the reliable flow of electricity through the clean energy transition. Highlighted throughout are ISO projects and initiatives that support the four pillars and facilitate progress toward the states’ goals. As the future grid comes to life in the years ahead, it will be increasingly important for all stakeholders—including consumers—to understand how our electric power system operates, and the roles we each can play in ensuring it is clean, cost-effective, and reliable for generations to come.