Lessons from January: Building a Resilient Energy Mix Against Over-Reliance on Single Sources of Supply

Let’s explore the complexity associated with keeping the lights, using New England as an example. The region is a bit of an outlier because of its proverbial end-of-the-pipeline location. Most days, its two pipelines are sufficient to heat homes and generate power. But late January to early February was unusually cold and there was not enough gas for both.

We’ll look at both energy and capacity issues. Capacity is the instantaneous amount of electricity produced or consumed. Energy is a function of capacity times the duration.

The hottest and coldest days are the ones in which we stress the grid the most – because of heating and cooling demands.

Annual grid peaks typically occur in summer, around 5:00 or 6:00 PM. So grids need enough generation to meet the peak demand, plus a back-up reserve margin, in case we lose a big power plant or transmission line.

Until recently, ISO-NE only paid attention to summer peaks, when the system maxed out. But recently, it began to shift its attention to the winter as well. First, because new loads, especially EVs and heat pumps, have higher winter demand. Second, there’s not enough gas to go around.

Fortunately, from a reliability perspective, the region’s dual fuel turbines can burn fuel oil or kerosene, and even jet fuel. So the focus shifts to energy, because the amount of stored liquid fuels is limited, though it can be replenished – especially if weather cooperates. During the frigid cold snap in 2017/2018, New England started with 5 million barrels of oil and ended with only one, in one case burning a million gallons in a single day.

During the extreme cold this January, fuel oil was the leading source of generation for several days, constituting over one-third of operating generation.

One new resource just commissioned was the 1200 MW New England Clean Energy Connect (NECEC) transmission line, bringing hydropower from Quebec to Massachusetts with a contract for an annual 9,555,000 MWh. The NECEC line was expected to help address winter capacity and energy issues.

But last week, no power was flowing into New England over that line on the coldest days. On the frigid Sunday before the storm, power flowed for only a single hour, with the line operating at about half its capacity. The following day, at around 6:00 in the evening, electricity started flowing again at about 25% - this despite penalties for non-delivery.

However, the contract does provide a measure of relief to those oil supplies in the long run. Today, January 3rd, the temps are in the mid-20s. The region continues to burn oil, at 23%.

Transcript

Capacity Vs. Energy Explained

Peaks, Reserves, And Weather Risk

Gas Constraints And Dual-Fuel Reliance

Oil Inventories And Near-Miss Outages

NECEC Expectations Versus Reality

Price Spikes And Current Resource Mix

Renewables, Offshore Wind, And Rooftop Solar

The Case For An All-Of-The-Above Mix

SPEAKER_00 0:03

I've got your energy story for this, the first week of February 2026. And this week, let's explore the complexity associated with keeping the lights on in a specific power grid. In this case, New England. We'll also discuss how capacity and energy interact. To illustrate these two concepts in the grid, let's look at how New England has been faring during this recent cold snap. The region's a bit of an outlier because of its proverbial end of the pipeline location, meaning it sits at the end of two gas pipelines. Most days, those two pipelines would be sufficient to allow for heating of homes and businesses, as well as sufficient power generation. But the period from late January to early February hasn't been most days, and this coming week won't be either. So let's look at those energy and capacity issues. For some of you, this is old hat, and I'm sorry. But to refresh, capacity is the instantaneous amount of electricity produced or consumed, generally measured in kilowatts or megawatts. If electricity were water, capacity would be the size of the hose, perhaps described in capacity terms as gallons per minute. Energy would be a function of that capacity times duration. So one kilowatt per hour is one kilowatt hour, just like a one gallon per minute hose, if you ran it for a minute, would get you a gallon of water. But water can be stored, and power for the most part cannot, as it's produced and consumed instantaneously. Also, power use has a high correlation to weather, since we use electricity for air conditioning and in many cases for heating. So it's on those hottest and coldest days where we stress the grid the most and hit our system peaks. As an aside, if our build space were better insulated, there would be a lower correlation between temps and power consumption. The resulting demand curve would be relatively flatter with less resulting volatility and power prices. These are all systems of systems. So having dealt with the issue of energy and capacity, let's look at how New England's power grid held up. First, let's look at system peaks. Our grid consumption typically maxes out in the summer around 5 or 6 p.m. on the hottest day. So the grid operator needs to ensure there's enough generation to meet the peak demand plus a certain amount of backup called reserve margin in case we lose a big power plant or transmission line. In 2025, the summer peak hit 26,550 megawatts, while the winter peak notched 19,607 megawatts. Until recently, ISO New England only paid attention to the summer peaks because that's when the system maxed out. But recently, it wisely began to shift its attention to the winter as well. There are two good reasons for that. First, new loads, especially electric vehicles and heat pumps, have much higher demand in the winter, so the region may eventually become a winter peaking utility. Second, the gas that's often available to generators in the summer has a nasty habit of being unavailable in the winter, with much of it diverted to heating of homes and keeping inhabitants alive. On the coldest winter days, such as we've seen with the recent Pulivortex events, there are too many straws in that same natural gas drink. Some of the gas generation straws, especially plants that didn't pay for firm gas delivery and pipeline capacity, well they get yanked. So the gas gen that was there in the summer doesn't always show up to the winter party. Fortunately, from a reliability perspective, but not from an air quality or climate one, the region is able to resort to dual fuel turbines that can burn fuel oil or kerosene and even jet fuel. Here's where the conversation quickly shifts from a capacity one to an energy one, because the amount of stored liquid fuels is limited, though it can be replenished, especially if the weather cooperates. During the frigid cold snap in 2017-2018, New England started the winter season with five million barrels of oil. It ended with one after having burned a million gallons in a single day. Or put it another way, one more day of that kind of cold and the region might have had to resort to rotating power outages. During the extreme cold of late January, fuel oil was the leading source of generation for a number of days as generators began burning through inventories. For a while, it constituted over one-third of all the operating generation pouring power into the grid. One new resource that was just commissioned and was expected to deliver both badly needed winter capacity and energy to the region was the 1200 megawatt New England Clean Energy Connect transmission line, bringing hydropower from Quebec to Massachusetts via transmission routed through Maine. The NECEC contract specifies delivery of an annual 9,555,000 megawatt hours. It includes firm energy and related environmental non-carbon attributes. That NECEC line was touted as helping New England deal with its winter capacity and energy issues. But last week proved that the NECEC resource wasn't perhaps everything expected of it. During the winter storm, no power was flowing into England over that line for some time. In fact, there was energy moving the other way, from New England into Quebec over a second line, helping the Quebecois to weather the even colder temperatures further north. Politico's E ⁇ E News was on the story early and reported that on the frigid Sunday before the storm hit New England, power flowed for only a single hour, with the line operating during that hour at about half its capacity. The following day, at around 6 in the evening, electricity did start flowing again, but only at about 25%. This despite penalties in the contract for non-delivery, which Hydro Quebec's COO said it anticipated paying. So as far as reliable capacity goes, the NEC EC contract isn't quite there if it can cut and run in periods of extreme duress when New England needs it the most and simply pay penalties. Not only did the contract not provide the firm capacity when New England needed it, for a while it wasn't offering energy either, as the region steadily burned through its limited oil inventories. That said, the Quebec contract does provide some measure of leaf to those oil supplies in the long run, because most of the time it is delivering power. Today, January 3rd, for example, the temps around Boston are in the mid-20s. At the moment, 10 30 a.m., natural gas gen sits at 32% of the mix. Nukes contribute their pretty constant amount, currently sitting at 21%. They run flat except when they're down for maintenance. And the region continues to burn oil at 23% of the mix. Anytime you have oil there, you can expect high spot market prices. And right now, they sit around$200 a megawatt hour. Those real-time prices spiked as high as$630 on January 26th, compared with an annual average of around$40 per megawatt hour. But net imports right now, including the HQ NEC EC contract, make up 16%. And those electrons from Quebec represent expensive oil inventories were not burning and not having to replenish. Renewables, including offshore wind, and vineyard wind, has been performing quite well during the cold snap, at least the part of it that was up and running before the Trump administration put a temporary halt to construction. That's also helping keeping that bucket from being emptied. Finally, so too does rooftop solar. Note the system demand curve from ISO New England that resembles a Bactrian camel. The two humps sit at roughly 18,500 megawatts each in the morning and the evening today. But as Apollo rides his solar chariot into the cold winter sky, projected demand plummets to about 15,000 megawatts by 1 p.m. That's all solar pouring off of rooftops across the region. That area between the two humps, that's also largely fuel oil we don't have to burn because of that rooftop solar, and that matters. The forecast for the coming weekend is once again bitterly cold, with wind chills dropping to the negative teens on Sunday night. As far as resources that will keep power flowing, it's pretty clear that over reliance on a single source of supply is a risky strategy. It's in all of the above that helps keep the lights on during those cold days that get so cold the snow creaks underfoot and the freezing skin on your face is screaming at you to go inside. Well, that's all for this week, and we'll see you again soon.