(Bloomberg) -- Oil is set to become the largest source of electricity in New England on Thursday for the first time in almost three years after temperatures plunged well below freezing.
Plants burning fuel oil accounted for just over 30 percent of the region's power supply during the morning, according to ISO New England Inc., the local grid operator. Oil typically makes up under 1 percent of the fuel mix on most days.
A lack of pipeline capacity has constrained gas flows to the region in recent years, causing prices to surge during severe cold snaps. New England became the world's priciest gas market earlier this week, making it more economic for generators to switch to fuel oil and coal.
“It's a perennial problem,” Kit Konolige, a New York-based utilities analyst for Bloomberg Intelligence, said by phone Thursday. “When it gets cold, there's not enough gas for both home heating and for power generation. Then you need to fall back on oil.”
Oil produced 5,066 megawatts of power in the region at about 10 a.m., compared with 3,516 megawatts from gas and 4,027 megawatts from nuclear, according to the grid operator. The last time oil accounted for 30 percent of an entire day's power-generating supply was in February 2015.
The grid operator issued a cold-weather watch for Thursday and Friday in response to tumbling temperatures. Although extreme cold is forecast, power supplies are more than adequate, said Marcia Bromberg, a spokeswoman.
--With assistance from Christopher Martin
To contact the reporters on this story: Jim Polson in New York at jpolson@bloomberg.net, Naureen S. Malik in New York at nmalik28@bloomberg.net.
To contact the editors responsible for this story: Lynn Doan at ldoan6@bloomberg.net, Stephen Cunningham
©2017 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
