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The 2027 Market Project Candidates report, which is regularly updated, expands upon the broader goals outlined another document, the ISO’s annual Power Trends Report, released in early June.

The ISO has estimated that demand could grow 22% by 2040, but that outlook remains uncertain as electrified heating and transportation and new large loads are not entirely predictable.

Meanwhile, fossil generation continues to retire and the New York system is shifting to a winter peak.

Rich Dewey, CEO of the ISO, said state climate policies and load growth drive these trends. “The way to meet the objectives is to electrify the whole system,” he told television station Spectrum News 1 on June 18. “We anticipate we are going to be running out of supply pretty soon.”

The power trends report said wind, solar, and shorter-duration storage lack the capabilities to sustain essential grid services during extended weather events that stress the system.

“In the short-term, repowering … fossil-fuel power plants, or upgrading existing renewable generating facilities with new technologies offers a compelling solution,” the power trends report said.

Full electrification may be difficult. Consultant Modo Energy expects natural gas generation in the ISO to rise from 42% to 53% of the ISO’s total supply by 2049.

In the near term, New York’s system is in transition. Like other centralized grids, the ISO now evaluates new generation proposals in a group.  The first cluster study covered 240 generation projects, and the ISO anticipates completing the work in August, with a final decision period for interconnection customers running to October.

“Rising tension between state and federal energy and environmental policies is adding further uncertainty for developers,” the power trends report said. Changes to trade policy, tax incentives and regulations are influencing long-term investment decisions.

Similarly, announced loads may not materialize. The ISO said 51 project proposals seeking interconnection by 2030 would add 12,670 MW of new demand. The grid’s load forecasters expect roughly 2,880 MW of that demand will be on the system by 2040.

While load growth may be uncertain, the state’s policy goal is for power to be carbon free by 2040.

The ISO concluded that dispatchable, emissions-free generating technologies do not yet exist on a commercial scale, so the reliability services provided by fossil fuel resources cannot be easily replaced.

One development touted in the power trends report was the integration of aggregated distributed energy resources into competitive markets.

The New York grid claims this is the first in the nation following Order 2222 of the Federal Energy Regulatory Commission, which mandated in 2020 that grid operators remove barriers to participation by small scale resources.

New York allows aggregations of distributed resources greater than 10 kW to participate directly in wholesale energy, capacity and ancillary services markets. About 350 MW of these resources participate in the markets.

Many different kinds of assets can be aggregated in the program, but they have to be on the same transmission node.

For energy, operating reserve or installed capacity markets, the aggregation minimum is 100 kW. If an aggregation offers a combination of energy injections, energy withdrawals, or demand reductions, the aggregation must offer at least 100 kW for each type of distributed energy resource.

The 2027 market project candidates document released June 30 details many more options for the ISO:

• As steeper load ramps appear in both morning and evening hours, the ISO is evaluating opportunities to provide better price signals and procure flexible ramping capability.

  A market design concept has been proposed to Improve duct-firing and unit-segment modeling to create biddable ramp rate breakpoints and multiple ramp rates. Duct firing is the burning of additional fuel in a power plant’s exhaust stream.

• In light of multiple ramp rates, efforts have been prioritized to improve operating reserve scheduling for greater flexibility.

• As inverter-based resources continue to displace conventional generators, the ISO anticipates an increased need for fast frequency response.

  Another study has been defined to examine real-time market structures needed to balance intermittency with more energy storage and distributed resources on the grid.

• To integrate storage and hybrid resources to provide regulation and reserves, the ISO needs to model storage state-of-charge, duration and performance characteristics.

• The market project document says a market design concept has been prioritized for updated testing and settlement for reactive power from these resources.

• Another market design concept is proposed for an undetermined future time to bifurcate regulation service into up and down products to expand the supplier pool. Other grid operators have regulation up and down services.

• A design has been proposed for a methodology to determining the winter peak load window that addresses resource adequacy risk. The current winter capability period peak load window remains the hour beginning 16:00 through the hour beginning 21:00.

• The market design is complete for an effort to expand the peak hour definition that incorporates summer and winter peak hour and capacity obligations. This project has been discussed since 2020.

  “Given the upcoming changes planned for New York’s grid, ensuring the determination of peak load hours used for capacity allocations is robust will be important for maintaining reliability and fair and equitable allocation of costs,” the market project report said.

• Commitments for reliability are another concern. “The market’s commitment outcomes do not fully align with an operating posture that supports reliable operations in the winter and under stressed system conditions,” the report said.

  Improvements in the day ahead market may include enhancements to model additional operational constraints or limitations in market commitment, approaches to improve alignment between modeled market values and operational reliability value and improved recognition and treatment of conditions, schedules and actions that result in heightened operational risk, it said.

  A market design concept is expected to be proposed by 2027, but all of the market projects are subject to change.

• The challenge posed by a winter peak has prompted the ISO to examine capacity markets. A capacity zone redesign project, due in 2027, is expected to bring enhancements to installed capacity suppliers unforced capacity ratings. A new capacity accreditation calculation is expected to reflect additional locational differences in marginal reliability value to better align the compensation of capacity suppliers with locational system needs.

  “Even if that project results in the creation of additional zones, there may be circumstances when the marginal value of capacity varies within a capacity zone due to more granular transmission bottlenecks not adequately reflected in the zone configuration,” the market project report said.

• Separately, the market design is complete on detailed improvements to seasonal installed capacity markets, although a start date is uncertain.

  The design proposes seasonal minimum capacity requirements, seasonal transmission security limit floors, seasonal locational capacity requirements and seasonal elections for unforced capacity deliverability rights and external-to-rest of state deliverability rights.

  Adjustments to the installed capacity demand curves would reflect the establishment of seasonal minimum capacity requirements.

• Another prioritized study examines using storage as a regulated transmission asset rather than a market resource.

• The market design is complete in an effort to pair storage or intermittent technologies with host load under behind the meter – net generation model. Eligibility requirements are strict. The generator must have a rating of at least 2 MW. The system requires an interconnection agreement allowing an export of at least 1 MW into the grid and the facility must have an average coincident host load of at least 1 MW.