PRESS RELEASE | NYISO 2018 Power Trends Report

Power Trends examines a number of forces and factors that are transforming the grid, including changing energy usage and moderating demand, and the economic and policy decisions affecting the expansion and contraction of power generation resources. With grid operations becoming increasingly complex, the report also looks at the need for greater resiliency and flexibility, and the influence of public policy goals on the grid and markets of the future.

“New technologies are pushing the boundaries of what consumers expect from the grid, while the growth of renewable and distributed energy resources is changing the dynamics of energy consumption and production,” said NYISO President and CEO Brad Jones. “The NYISO sees these challenges clearly, and embraces the work and change necessary to meet them. We understand that these new expectations for the grid require an examination of the markets and planning processes that shape it.”

This is a time of great transition for the power grid. The changing portfolio of resources serving the electric needs of New York will require a careful and comprehensive review of the NYISO’s existing market products and operational practices. NYISO’s markets and planning functions have established a solid platform to address new and emerging goals in support of what will be a more dynamic system of the future.

As evidence of the technological changes taking root on the grid, over the past year the NYISO has seen proposals to connect more than 400 MW of battery storage capability to the grid, as well as the first proposed offshore wind project for New York State - a 96 MW project off of Long Island.

With wholesale energy markets reflecting the confluence of economics, technology and public policy, the 2018 report analyzes a number of related issues and trends, including:

Consumer Expectations

• Consumers, increasingly empowered with intelligent digital technologies and advanced communications tools, are becoming active participants on the grid —adjusting their energy use patterns to reflect grid conditions, and tailoring their energy use to meet their own needs for reliability and clean power.

Changing Energy Usage

• Distributed energy resources — such as rooftop solar — are transforming historical patterns of consumption, and expanding consumers’ reliance on the grid to both deliver and receive power.
• Energy efficiency efforts, and expansion of solar and other distributed energy resources on the distribution system, continue to displace the amount of energy supplied by the grid.
• Energy usage from New York’s bulk electric system is expected to decline over the next decade at a rate of 0.14% per year, and peak demand — a critical element to reliable system planning — is expected to decline by 0.13% per year through 2028.

Changing Generation Resources

• Reflecting economic and public policy investment signals, recent generation additions have primarily been natural gas-fueled in downstate New York and wind-powered in upstate.
• Public policies, such as New York’s Reforming the Energy Vision and Clean Energy Standard, and competition from emerging technologies are expected to accelerate the pace of change in the generation mix over the next ten years, creating an influx of new, clean energy resources while many older conventional resources exit the grid.
• Locational-based pricing, regional capacity requirements and more granular pricing in NYISO’s competitive markets will continue to encourage investment in areas of high demand and identify locations on the grid where new distributed energy resources will be most beneficial.

Markets for a Grid in Transition

• Public Policy objectives and the growing integration of new technologies are changing the nature of traditional market design.
• The NYISO views open markets as an essential, effective platform for pursuing policy goals in an economically efficient manner.
• The addition of renewable resources expected from policies like the Clean Energy Standard will create a more dynamic grid where supply is heavily influenced by weather.
• Over the next decade, price signals that reward supply flexibility will become instrumental as the entry of new intermittent renewable generation will need to be balanced with complementary resources, such as storage and resources that can ramp up when renewable production is down.
• Integrating the cost of carbon dioxide emissions into wholesale market prices would incentivize competition from low-cost sources of carbon abatement to support decarbonizing the grid.

Enhancing Resilience

• The NYISO will evaluate opportunities to leverage competitive wholesale market products and services to bolster the resiliency of New York’s bulk power system.
• Market design enhancements will be tailored toward refining price signals to attract the types of characteristics necessary to sustain reliability, resilience and effective investment signals for the grid of the future.
• These efforts will also evaluate the potential need for additional ancillary services products to incent flexibility and dispatchability to respond to the increased variability of intermittent renewable generation and distributed energy resources.
• Recognizing that more efficient planning processes are critical to achieving a more robust and resilient transmission system that serves as the catalyst for continuing industry transformation, the NYISO is undertaking a comprehensive re-evaluation of current planning processes.

In collaboration with policymakers and market participants, the NYISO will continue to leverage its expertise in operating New York’s power grid, advanced energy market design, and open and transparent system planning to reliably and efficiently meet the energy needs of all New Yorkers.

Download Power Trends 2018: New York's Dynamic Power Grid Report from the NYISO website here.