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Role of Natural Gas

In 2000, natural gas fueled just 15% of New England’s electricity production. Today it is the primary fuel used to produce electricity in the region, having displaced many higher-emitting and less-economical power plants. In a typical year, natural-gas-fired plants generate about half of the electricity produced in New England.

Natural gas plays an important role in the evolving resource mix:

  • For each megawatt of electricity they generate, natural-gas-fired plants produce less carbon dioxide than plants that burn other fossil fuels, biomass, or solid waste. Combined with emission controls on fossil-fuel-burning generators and other factors, this has contributed to a significant long-term decline in regional air emissions.
  • Many natural-gas-fired plants can change output quickly. This helps to balance variations in output from increasing levels of intermittent power resources that rely on the wind and the sun.

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Access to Fuel Can Be Uncertain in Winter

On cold days, the region’s natural gas pipelines run at or near capacity to meet heating demand, leaving less fuel available for electricity generation. This can create a number of concerns for the power system:

  • Reliability risks: Because such a large quantity of the region’s generating capacity uses natural gas, its unavailability can threaten the reliable supply of electricity. This is particularly true when non-gas-fired resources are also unavailable—for example, when imports are reduced because neighboring grids are dealing with the same weather, when conditions are unfavorable for solar and wind resources, or when older non-gas-fired generators experience mechanical problems.
  • Air emissions: Higher-emitting generators run more frequently when gas-fired units can’t access fuel or when the price of natural gas is high. This means pipeline constraints can affect regional air emissions during winter.
  • Price volatility: Similarly, the price of natural gas tends to spike as temperatures drop and demand for the fuel increases. This has an immediate effect on wholesale electricity prices.
natural gas dependency

While some natural-gas-fired generators may turn to liquefied natural gas (LNG) when pipelines are constrained, several factors can impede generators’ access to LNG when it’s most needed:

  • LNG is a global commodity that’s imported to New England by oceangoing tankers. Contracts are set months before generators know for sure whether or not they’ll need LNG.
  • The arrival of any spot LNG cargoes depends on global prices and varies from year to year. Tanker ships supply the entire Northeast and beyond—not just New England generators.
  • Severe weather could prevent the timely arrival of ships.

These concerns are not as apparent during mild winters, when heating demand for natural gas is lower and there’s more natural gas available for electricity generators. However, New England winters are unpredictable. On the coldest days, fuel constraints have the potential to sideline a significant amount of natural-gas-fired generation.

ISO New England routinely monitors energy supplies, including the availability of pipeline natural gas, oil, and coal, as well as inventories at regional LNG storage facilities. This information is combined with weather forecasts and predictions about consumer demand to produce a 21-Day Energy Assessment Forecast and Report. By identifying and publicizing possible energy supply shortfalls weeks in advance, the ISO informs the region’s wholesale energy market participants when there is a need to contract for additional fuel deliveries.

Dispatchable Resources Provide Grid Flexibility

The ISO’s research consistently finds that dispatchable resources—which can include generation, storage, and demand response—will play a vital role throughout the clean energy transition. Dispatchable resources can fill gaps between supply and demand due to swings in production from intermittent, weather-dependent resources. Other assets help balance the system and contribute to reliability by providing services such as voltage and frequency support.

In the near term, natural gas will remain the region’s leading fuel source for electricity generation. Along with other dispatchable resources, natural-gas-fired plants will continue to afford the grid much of its needed flexibility. In the future, clean alternative fuels and battery storage could bolster this role.