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New England Seeks to Balance Renewables and Grid Reliability

September 01, 2020

Grid Operators in the US deregulated energy markets need only look west to California and the Golden State’s recent barrage of rolling blackouts for a reminder of how an ambitious but unchecked drive to a renewable fuel mix can threaten grid reliability.

California’s charge over the last two decades toward a carbon-free future has led to a flood of solar resources fulfilling the state’s electric demand during the day. 

That’s the good news.

That drive has also led to a phenomenon known in the energy industry as the “duck curve” in the evening when solar resources go offline and demand for electricity ramps to consumption levels that challenge the grid on a daily basis.  

That’s the not-so-good news. 

The duck curve (named so because the ramp in daily evening demand when graphed on a 24-hour consumption chart resembles the neck of a duck) isn’t new. 

The “Duck Curve” was coined in the mid-2010s and shows the effects of demand on California’s grid spiking in the evening when solar goes offline.

For years, in fact, energy markets outside of California have cited the graphed duck’s increasingly bulging belly (indicating a yearly increase in solar resources fulfilling daytime demand) as a case-in-point on how renewable intermittency is both a threat to grid reliability and a challenge for energy markets seeking to evolve their fuel mixes away from traditional fossil fuels.  

Energy storage, long hailed as a panacea whose realization was until recently perpetually dismissed as being a few years away, has arrived as an affordable resource, perfectly suited to satisfy progressives’ ambition and grid operators’ reliability concerns.

The question in 2020 and beyond is this: how can energy markets evolve to allow storage resources to participate and help offset the inevitable intermittency of increasingly popular renewable resources such as solar and wind? 

New England may have the answer in its lineup of demand response programs at both the ISO and utility levels. 

Daily Dispatch Demand Response

New England utilities National Grid, Eversource, and Unitil have introduced a new demand response program called Daily Dispatch. 

The program complements the utilities’ highly successful Connected Solutions demand response program and aims to further reduce peaks on their distribution systems.

Daily Dispatch is designed to allow energy storage (batteries, thermal storage) to participate because of the resource’s ability to be dispatched frequently and quickly in response to rising peaks.

The Daily Dispatch program runs during the summer from June through September. The program is intended to be dispatched daily (as the name suggests)  with anywhere from 30-60 events each year during the hot months of July and August. Each event is expected to last about two to three hours.

The new program has an attractive incentive of $225-300 per kW per summer. Customers’ compensation will be based on their average curtailment amount for all the events that are called during the summer.

On-Peak Demand Response

On-Peak Demand Response rewards participating organizations for making permanent load reductions.

On-Peak resources are passive, non-dispatchable, and only participate in ISO-NE’s Forward Capacity Market. Eligible behind-the-meter resources include solar, fuel cells, cogeneration systems, combined heat and power systems (CHP), and more.

Passive Demand Response participants offer their reduced electricity consumption into the market during both the summer and winter peak hours.

Potential for Multiple Revenue Streams

New England organizations can participate in multiple demand response programs. 

That means that organizations with storage resources are in a prime position to open multiple revenue streams through demand-side energy management. 

The New England energy market is evolving toward a fuel mix that features less coal and more renewables. 

By introducing ISO and utility level demand response programs that allow for storage participation, the market is aiming to avoid grid reliability woes brought about by resource intermittency.

Organizations with battery storage devices not only have a leg up in the race to superior resilience, but they also have a flexible, dispatchable resource the grid operator and electric utilities recognize is valuable and are willing to handsomely compensate in times when the grid is stressed or electricity prices are high. 

Watch CPower’s Jobin Arthungal and Mat Tuttelman explain everything your organization needs to know about the New England energy market in the 2020 State of Demand-Side Energy Management in New England video-on-demand. 

State of the 2020 New England Energy Market (Webinar)

August 26, 2020



Even before the onset of the Covid-19 lockdown, 2020 was expected to be a year of change in New England’s energy market. As the region works its way through the pandemic’s maze, organizations are reexamining their energy management strategies in search of optimization for an increasingly uncertain future. 

This webinar is designed to give organizations like yours the demand-side energy management insights you need to make the most of 2020 and beyond in New England. 

Topics covered include:

  • How ISO-NE is working to address the region’s fuel security issues
  • Proposed energy market changes and redesigns
  • How renewables are affecting the market 
  • Energy storage other distributed generation monetization opportunities
  • New and existing demand response programs 
  • And more…

CPower’s New England experts Mat Tuttelman and Jobin Arthungal host this webinar that includes a question and answer session.

CASPR in New England – Market Minute (Video)

March 26, 2020



In New England, the second annual Competitive Auction for Sponsored Policy Resources (CASPR) took place in February 2020 for the power delivery year of 2023-24. 

CASPR was created to prevent subsidized resources covered by tax credits or state incentives from depressing prices in New England’s forward capacity auctions. 

CASPR was designed to allow retiring resources that had secured capacity supply obligations to transfer those obligations to new, subsidized resources that do NOT have an obligation.

The existing resource — from a retiring fossil fuel plant, for example — can then retire and receive a final payment equal to the difference between the (higher) forward capacity auction clearing price and the (lower) secondary auction clearing price.

According to ISO-NE’s published results of the February CASPR auction, zero MWs cleared the auction because there were NO retiring resources leaving the market. 

This is the second year in a row the number of renewable resources seeking to ENTER the market have outnumbered the retiring resources seeking to exit the market. 

ISO-New England, the region’s grid operator hasn’t committed to fundamentally changing CASPR in 2021, though there has been talk of altering auction as New England seeks to move away from a fuel mix dominated by fossil sources to one that features a greater mix of renewable sources.

For the latest insights on US energy markets by CPower, check back with “The Current” and stay ahead of energy’s demand curve. 

2020 State of Demand-Side Energy Management in North America

March 25, 2020
Last year, nearly 2000 organizations nationwide downloaded the State of Demand-Side Energy Management in North America book by CPower’s energy experts.
This year, we pick up where we left off with a market-by-market analysis of the issues, trends, and regulations organizations like yours should understand in 2020 to make better decisions about your energy use and spend.

ISO-NE: Fuel Security Remains New England’s Biggest Concern

March 24, 2020

In its 2019 State of the Grid Report, ISO-NE revealed that the grid’s most pressing vulnerability is energy security. The ISO cited its “inadequate fuel delivery infrastructure” as the reason electricity demand during extended winters may go unmet.

As we highlighted in last year’s version of this book, New England’s winter fuel security is an energy supply problem not a capacity shortfall problem. ISO-NE has stated that as wind and solar sources increasingly contribute to the grid’s fuel mix along with more just-in-time fuel, the supply problem that has created a winter fuel shortage could become a year-round issue for New England.

ISO-NE believes market design is the answer.

ISO-NE market redesign proposal: incentivize generators

ISO-NE’s goal with redesigning its market is to compensate resources that help the system maintain its energy inventory. 

Consider natural gas generators. Currently, the economics in New England are such that natural gas generators do not keep inventory for multiple days. Rather, they offer their capacity into the day-ahead market. Why? Economics. The generators feel it’s in their best financial interest to take positions in the capacity market and reap the reward from emergency conditions as opposed to what they would earn in the energy market. 

Normally, that wouldn’t be a problem. That’s how the market is currently designed, after all. But remember, New England’s winter fuel problem is supply-related. The region has plenty of capacity. It needs more supply, particularly during extremely cold conditions.

OK, says ISO-NE, let’s introduce a proposal to redesign the market on the energy side and incentivize natural gas generators to keep more inventory that can be delivered in the winter, thereby alleviating the fuel security risk. 

Problem solved. Right? Well…theoretically yes. But by altering the market on the energy side to incentivize generation, ISO-NE may unwittingly affect its capacity market in a negative way. 

Unintended consequences for the New England capacity market

Natural gas generators typically take large positions in the capacity market, offering at a specific price that, when accepted, tends to establish capacity’s clearing price in New England’s forward capacity market. 

If natural gas is incentivized in the energy market, as ISO-NE’s market redesign proposal intends, natural gas generators may become price takers in the capacity market. They no longer would have an interest in taking a large capacity position in the market. As a result, the price of capacity could fall from year to year.

As more renewables come online and ISO-NE looks to integrate more distributed energy resources onto its grid, a depressed capacity market poses problems. ISO-NE has proposals in the works to address these concerns. 

ISO-NE’s Market Proposals

In April 2019, ISO-NE introduced three ideas to build on New England’s competitive wholesale electricity structure. The goal is three-pronged:

  1. Strengthen generation owners’ financial incentives to undertake more robust supply arrangements. 
  2. Reward resource’s flexibility to mitigate energy supply uncertainties that take place throughout the day. 
  3. Efficiently allocate electricity production across multiple days from resources that have limited (non-just-in-time) energy sources.

To accomplish these goals, ISO-NE introduced three new components that are currently under review. For commercial and industrial organizations looking to optimize their demand-side energy resources, these proposals are worth keeping an eye on because they by and large affect the region’s capacity market in what ISO-NE hopes is a positive way.  

The Multi-day ahead market  

This would be a voluntary market for forward energy transactions extending the current (single) day-ahead market several days in advance of the operating day, with daily offers rewarded with the price at which they clear on that day.  

By extending the day-ahead market to several days, ISO-NE seeks to enable suppliers to refine their energy positions (adjusting due to changes in fuel supplies, costs, and delivery capabilities) prior to the delivery day. The ISO figures it can optimize the region’s limited energy supplies and avoid scarcity pricing conditions during extreme cold weather when the region might otherwise be forced to turn to costly, out-of-market resources. 

While the multi-day ahead market is supply-side in nature, it may have a demand-side impact if it succeeds in thwarting the exceptionally high energy prices that trigger a demand response event. Without high prices, a demand response event is less likely to occur. 

But that’s not necessarily bad news for DR participants. Although they are less likely to be dispatched to curtail their loads, DR participants will still be required to comply with a seasonal test for which they are paid.    

New Ancillary Services in the Day-Ahead Markets

Most energy resources in New England operate during hours of the day for which they receive an energy supply award in the day ahead market. But what happens when one of those cleared day-ahead resources is unable to operate?

ISO-NE calls these instances “energy gaps” in the operating plan. The resources that were incentivized to run but can’t must be replaced by resources that were not incentivized to run.

The way the region’s energy market is currently structured, it simply isn’t profitable to procure fuel in the case of an energy gap. With new ancillary services in the day-ahead market, ISO-NE hopes to remedy the situation by rewarding flexible resources that can fill the gaps when emergency conditions arise.

Exactly how these new services will be rewarded is a detail the ISO is ironing out. ISO-NE has suggested, however, that these new ancillary obligations should be settled like a call option on real-time energy. 

Seasonal Forward Market

The third component ISO-NE has proposed is a voluntary forward auction with the goal of facilitating investment in the supplementary energy supply arrangement several months in advance of each season. The aim here is to ensure there is adequate energy supply in the winter. 

ISO-NE has some work to do on this front and admits as much. They are exploring a revamp of the existing Forward Reserve Market so that it essentially becomes a forward market for the new ancillary services we previously discussed and may be transacted in the day-ahead market.


This post was excerpted from the 2020 State of Demand-Side Energy Management in North America, a market-by-market analysis of the issues and trends the experts at CPower feel organizations like yours need to know to make better decisions about your energy use and spend.

CPower has taken the pain out of painstaking detail, leaving a comprehensive but easy-to-understand bed of insights and ideas to help you make sense of demand-side energy’s quickly-evolving landscape.

Download Your Copy

2020: The Year Storage Goes Big in New England

All together now…what are the reliability problems an evolving grid with a fuel mix increasingly featuring intermittent, renewable sources like wind and solar facing? Veterans and savvy followers of the New England energy market know the answer to this one knee-jerk. No need to join the chorus. The answer is as easy as picking the Patriots to make the playoffs.

Resource intermittency is a threat to grid reliability.   

Solar PV panels can’t generate electricity when the sun isn’t shining. Wind turbines don’t turn without wind blowing. Simply put, solar and wind sources can suddenly find themselves in adverse conditions during which they can’t produce. 

So what’s a grid to do?

In New England, as in other progressive deregulated markets in the US like California and New York, the answer is energy storage. 

FERC ORDER 841: Let storage in

On February 18, 2018, the Federal Energy Regulatory Commission (FERC) issued Order 841, which directed regional grid operators to remove barriers to the participation of electric storage in wholesale markets. 

Order 841 seeks to direct regional grid operators to establish rules that open capacity, energy, and ancillary services markets to energy storage. The Order affirms that storage resources must be compensated for all of the services provided and aims to level the playing field for storage with other energy resources. 

In working to comply with FERC 841, ISO-NE now faces a host of challenges familiar to other markets seeking to properly value distributed energy resources in the marketplace. New England may not have the answer, but they have an answer. 2020 looks to be the year demand-side energy storage makes a significant impact in New England, albeit on the distribution side through utilities. 

New England realizes the value energy storage can provide in offsetting wind and solar resources’ intermittency. While ISO-NE is working on market redesigns to allow energy storage resources to participate, electric utilities are jumping into the ring in 2020 with a new program that features energy storage in a starring role.   

Beginning in 2020, electric utilities will offer a new demand response program that allows for storage to play a critical role in helping the grid maintain balance when demand for electricity threatens to exceed supply. 

Introducing Daily Dispatch Demand Response

To help further reduce peaks on their distribution systems, New England utilities National Grid, Eversource, and Unitil have introduced a new demand response program called Daily Dispatch. 

Daily Dispatch is designed to allow energy storage (batteries, thermal storage) to participate because of its ability to be dispatched frequently and quickly in response to rising peaks.

The Daily Dispatch program runs during the summer from June through September. The program is intended to be dispatched (as the name suggests) daily with anywhere from 30-60 events each year during the hot months of July and August. Each event is expected to last about two to three hours.

The new program has an attractive incentive of $200 per kW per summer. Customers’ compensation will be based on their average curtailment amount for all the events that are called during the summer. 

For example, a customer that curtails an average of 500 kW for each of the Daily Dispatch events would gross a $100,000 for their efforts.

The Daily Dispatch program appears to be an instance where we find electric utilities taking a leadership role in optimizing energy storage to reduce peak load by allowing commercial and industrial organizations to monetize the distributed generation assets in which they have invested.   

Since it is at the utility level and not an ISO program, Daily Dispatch needn’t rely on the wholesale capacity market to settle payments. Instead, the program can offer a flat per kW rate, thereby allowing participating organizations to monetize their behind-the-meter storage in 2020 as opposed to waiting until ISO-NE establishes its DER valuation policies.


This post was excerpted from the 2020 State of Demand-Side Energy Management in North America, a market-by-market analysis of the issues and trends the experts at CPower feel organizations like yours need to know to make better decisions about your energy use and spend.

CPower has taken the pain out of painstaking detail, leaving a comprehensive but easy-to-understand bed of insights and ideas to help you make sense of demand-side energy’s quickly-evolving landscape.

Download Your Copy

Seasonal Readiness 2020

February 18, 2020
Are you ready for the 2020 demand response season? Our program information and On Demand Webinar resources will help make you successful in your programs in 2020. Here, you'll find program information, key dates (like communication drills), your CPower contacts, market information, dispatch information and more.