By Adam Wilson
Despite being the smallest independent system operator, or ISO, in terms of electricity demand in the U.S., ISO New England is expected to be a very active market for renewable energy deployment over the next decade. Each of the six states in the ISO has a mandatory renewable portfolio standard in place and the region is increasing its dedication to offshore wind procurement. As a result, S&P Global Market Intelligence estimates that over 12,500 MW of wind and solar capacity will be installed in the region by 2030. (View graphs here: https://docs.google.com/document/d/12I2DmX8kuYzG2Rgn5sPCC6Aciyd2uI9Mr7mDiXsGSEU/edit?usp=sharing)
The New England markets that are expected to move the needle the most are Connecticut, Maine and Massachusetts due to aggressive RPS requirements and offshore wind targets. Connecticut has a 48% renewable target by 2030 as well as a 2,000 MW offshore wind procurement goal also by 2030. Maine enacted legislation in June 2019 that increased the state's RPS to 80% by 2030 and 100% by 2050 making it the first state in the region to pass a 100% renewable mandate. Massachusetts has one of the most complex packages of renewable energy statutes in the country. The state has in place an RPS, a clean energy standard, a clean peak energy standard, an alternative energy portfolio standard, a solar carve-out and an offshore wind procurement goal just to name a few. The clean energy standard sets a requirement of 80% clean energy by 2050 and the offshore wind procurement goal is 3,200 MW by 2035.
Rounding out the ISO New England region are New Hampshire, Rhode Island and Vermont. New Hampshire has the least aggressive RPS in New England with a target of 25.2% by 2025. Rhode Island has an RPS mandate of 38.5% by 2035; however the state is taking steps to increase this standard with Gov. Gina Raimondo signing an executive order committing the state to go 100% renewable by 2030. Vermont has a lofty RPS mandate of 75% by 2032 which it is reaching primarily through contracted hydroelectric generation.
Maine leads all New England states in installed renewable capacity to date at just over 1,500 MW with 921 MW coming from wind and 565 MW coming from biomass resources. Massachusetts is close with 1,436 MW, the majority of which is 1,021 MW of solar. Overall, just over 4,300 MW of renewable capacity is currently installed within ISO New England — one of the lowest totals among all ISOs. This capacity is fairly evenly split between solar, wind and biomass resources. There is 1,480 MW of wind, 1,449 MW of solar and 1,388 MW of biomass installed throughout the region.
There are over 8,400 MW of renewable projects in the pipeline in New England and the majority of this capacity is in wind projects. Roughly 6,900 MW of wind capacity is in various stages of development throughout New England, with most of this coming from large offshore wind projects. Land constraints limit the options for large utility-scale wind and solar projects in the region. As a result, onshore renewable capacity is mostly in smaller – less than 20 MW – solar projects spread throughout the region. In total, just over 1,450 MW worth of solar capacity is in the pipeline in New England according Market Intelligence data.
The specific renewable technology of focus in New England over the next decade is without question offshore wind. Due to limited land availability and better wind resources off the coast, offshore wind has seen significantly increased attention from renewable developers and state legislators. Connecticut and Massachusetts both have specific offshore wind capacity targets in place at 2,000 MW and 3,200 MW, respectively.
Overall, eight projects are in development off the coast of New England totaling over 5,500 MW. A few of these projects have been awarded contracts, increasing their likelihood of reaching commissioning. In Connecticut, the 804-MW Park City Wind Offshore project developed by Vineyard Wind LLC, a joint venture of Avangrid Inc. and Copenhagen Infrastructure Partners K/S of Denmark was selected in a recent solicitation. State utilities Eversource Energy and United Illuminating Co. in Connecticut contracted 300 MW from the Revolution Wind Offshore project developed by global offshore giant Ørsted A/S. Rhode Island approved a contract for 400 MW from the Revolution Wind Offshore project and is considering another 350 MW. Massachusetts recently awarded Ørsted's 804-MW Mayflower Wind Offshore Project in a recent solicitation. The 800-MW Vineyard Offshore Wind Project developed by Avangrid was also awarded in a previous solicitation in Massachusetts. While Maine has not set an offshore wind target, the 12-MW Maine Aqua Ventus I Offshore Project was moved forward in recent legislation. No other specific offshore projects are in development in the state.
New England states utilize renewable energy certificates for RPS compliance. The transfer and retirement of these RECs is tracked through the New England Power Pool Generation Information System, or NEPOOL-GIS. New England is a fungible market allowing RECs to be transferred easily between states for RPS compliance. RECs are also transferred into the ISO from New York, Quebec and the Maritime Provinces, which includes portions of Maine not in the ISO territory. As a result Class I REC prices for Connecticut, Massachusetts, New Hampshire and Rhode Island are nearly identical. Maine Class I RECs trade much lower due to a high level of developer activity relative to Maine's RPS. Much of this activity is targeted toward states with rapidly-growing RPS mandates — and higher REC prices — but availability of projects to meet Maine's RPS secondarily keeps the state's REC prices low.
Factors affecting pace of development
Market Intelligence projects just under 10,000 MW of wind and solar capacity must be built by 2030 in order for all states to reach or maintain pace with their RPS requirements and offshore wind capacity targets. This is on top of 2,600 MW of renewable projects in advanced development that are expected to come online over the next couple years. Over 8,800 MW of wind capacity is expected to be needed in the region to both reach offshore wind goals and meet RPS mandates. Just over 1,000 MW of solar is forecast to come online by 2030 in order to meet the region's overall RPS demand. Essentially all of this model solar capacity is built for demand from Massachusetts.
Massachusetts leads all New England states in RPS capacity demand with Market Intelligence projecting almost 3,700 MW of capacity by 2030. This is on top of the 800 MW of wind capacity from the Vineyard offshore project. Connecticut is second with over 2,800 MW of capacity, all coming from wind. The state's 2,000 MW offshore target is a big driver behind this but Market Intelligence expected another 1,900 MW of wind capacity needed to be built by 2030 on top of their offshore wind commitment. Maine is expected to need over 2,200 MW of wind capacity to keep pace with the renewable requirements. Just under 1,200 MW of wind capacity is needed by 2030 from New Hampshire, Rhode Island and Vermont combined. Due to an increasing pipeline of massive offshore wind projects and state offshore wind goals, combined with aggressive long-term renewable mandates, renewable generation in New England is expected to outpace their RPS requirements through the decade.
To see wholesale price, supply and demand projections, see the S&P Global Market Intelligence Power Forecast.
Jose Miguel Fidel Javier contributed to this article.
This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.