Dive Brief:

• Connecticut's 100% carbon-free goal is an opportunity for the state to move beyond grid operator-imposed reliability constraints that favor fossil fuels, Commissioner of the state's Department of Energy and Environmental Protection (DEEP) Katie Dykes told Utility Dive.

• Gov. Ned Lamont, D, on Tuesday signed an executive order directing DEEP to produce an analysis on how to get the state to a 100% carbon-free electric grid by 2040. That gives Connecticut the chance to move away from gas-fired plants and toward ancillary services in order to meet regional capacity needs, said Dykes.

• "In the absence of states having carbon policies that solve for both emission reduction and reliability, the ISO New England is driving investment in natural gas-fired power plants," she said. "And so this analysis, it's intended to help us solve for reliability with zero carbon resources so that we won't need plants like this going into the future."

Dive Insight:

As more states pursue aggressive clean energy policies, some are finding their carbon priorities do not line up with the resource adequacy requirements of their grid operator.

Connecticut tends to site more natural gas plants to meet those ISO-NE requirements for the region because the state "happens to have a convergence of gas pipeline infrastructure already in the ground as well as transmission infrastructure," according to Dykes.

Stakeholders in the state, including clean energy advocates and legislators, have two major concerns regarding the focus on gas: a continued reliance on carbon-emitting resources, and high electricity prices — the third highest in the country as of June 2019.

Those two things are interconnected, according to Dykes, and can potentially be addressed through this new directive.

"The mismatch between this fossil-based market design in ISO-New England and the state's approaches to building more zero-carbon resources, I'm concerned that it's causing us to build duplicative resources," she said.

"Anytime that we're building out in ways that aren't coordinated [between the grid operator and the state], I think there's a real danger that ratepayers are overpaying, and paying twice, for the same types of resources."

Duplicative buildouts have been "a concern in recent years as the states have sought to develop new resources through out-of-market contract[s], and led the ISO and stakeholders to develop rules to accommodate these [new] resources in the capacity market," Matt Kakley, spokesperson for ISO-NE told Utility Dive. 

Grid operators, such as ISO-NE, determine the amount of capacity needed in a year and allow resources to compete to meet that capacity, ultimately selecting the most cost-effective options. "Resources of all fuels and technologies ... compete on a level playing field," according to Kakley.

But market observers say clean energy resources in some regions do not have an even playing field, and the rising prominence of renewables coupled with aggressive state policies to reduce emissions creates a tension between states and their regional grid operators over what resources best meet states' energy needs.

"Particularly the eastern RTOs and ISO are set up in such a way that natural gas is sort of the 'go to' for new generation," Jessica Bell, a clean energy attorney at New York University told Utility Dive. "States can, certainly under the Federal Power Act, as we've seen confirmed by case law, set their own energy type preferences and many states have done that. And it is [a question of] how are the markets going to handle this? It's definitely an open issue."

Connecticut's first steps toward a cleaner energy grid will be to study the potential of ancillary services, such as storage and demand response, and the quantity of those resources that will be needed to meet the state's 2040 goals, according to Dykes. Those resources can complement larger procurements of solar and offshore wind to make that goal possible, she said.