The 2008 Regional System Plan released by ISO New England Inc. forecasts that the region is likely to have sufficient capacity to meet electricity demand through 2014, but significant challenges remain for the region.

The Board of Directors of ISO New England Inc., the operator of the region’s bulk power system and wholesale electricity markets, approved the 2008 Regional System Plan (RSP08) yesterday. The 181-page planning document gives a status report on the region’s power system, defines areas where improvements are needed, and outlines challenges and opportunities the region can expect through 2017. The plan also provides insight into the range of initiatives that regional stakeholders can undertake to meet the power grid’s present and future needs.

The document concludes that if all the 34,077 megawatts (MW) of resources procured in New England’s first Forward Capacity Auction in February continue to be available in future auctions, it is likely the region will have sufficient capacity through 2014. RSP08 reports that peak demand for electricity in New England is projected to be somewhat lower than the previous 10-year demand forecast, largely due to lower growth in the long-run forecast of personal income.

The report shows continuing regional progress in making necessary system improvements, including significant transmission upgrades required for system reliability and rapidly increasing use of demand resources that can help lessen the need for new infrastructure. The report also identifies issues still to be addressed, including additional transmission upgrades to meet reliability requirements; the challenges of integrating large amounts of wind and demand resources into system operations; the continuing need for a reliable and diverse fuel supply; and the question of how to ensure that environmental goals are met.

“Our regional planning effort provides a detailed assessment of New England’s bulk power system,” said Gordon van Welie, president and CEO of ISO New England Inc. “This report points the way to actions New England’s stakeholders and policymakers can take to ensure that the region has a power system that continues to provide a reliable supply of competitively priced electricity while meeting environmental goals.”

RSP08 reports that since 2002, more than 200 transmission upgrades have been put into service across New England, and another 62 are expected to be completed this year. Since 1997, 47 generating projects representing more than 12,000 MW have come online.

“RSP08 shows that the regional system planning process, combined with the incentives created by the competitive wholesale markets and state programs, has led to significant progress towards meeting the needs identified in earlier system plans,” van Welie said.

The region’s Forward Capacity Market, with the first auction held in February, has encouraged investment in power plants and boosted the development of demand resources, including load management, conservation, and energy efficiency. Almost 2,300 MW of demand resources that cleared in the first auction will be available in 2010. The annual auction is designed to ensure that sufficient capacity will be available in the period three years after each auction is held.

In 2000, the Federal Energy Regulatory Commission assigned ISO New England the responsibility for coordinating regional system planning. RSP08 is a snapshot in time of the needs of the New England system resulting from an ongoing collaborative process that includes state regulators and other government entities, transmission owners, end-users, market participants, and other stakeholders.