14 Nov 2018 Articles

Report Authored by Compass Lexecon’s Joseph Cavicchi Examines the Future of New England Electricity Market

1 minute read


The New England Power Generators Association (NEPGA) recently released a report authored by Joseph Cavicchi of Compass Lexecon that examines the growing scale of state-mandated power purchases and their impacts on existing power generation resources needed for reliability.

The analysis examines the New England electricity system and finds that over the next ten years state-sponsored electric generation resources are expected to become the largest single source of consumer electricity supply in New England by 2023, and to exceed 50% of the consumer electricity supply by 2027. Mr. Cavicchi notes that many existing resources will see their production levels decline substantially to accommodate the new clean energy resources. However, some of the existing generation will still be needed to increase and decrease production throughout the day to accommodate changes in load and intermittent resource production. Given the decrease in overall energy revenues for this set of resources needed to complement new clean energy resources, it is important that the market properly value the full set of services they provide. Absent opportunities to replace lost revenues, this foreshadows increased existing resource retirements. The report’s findings are consistent with recent ISO New England forecasts developed as part of a scenario analysis examining high renewables integration in the region.

The report concludes that maintaining the benefits of the region’s power markets requires that impact of the growth in contracted clean energy resources on electric system operations be analyzed to identify market design changes that will be needed to accommodate this new entry while providing an opportunity for needed resources to remain financially viable.

Click here to read report

A new version of Compass Lexecon is available.