By Scott DiSavino
Nov 8 (Reuters) - Average electric demand in New England is expected to remain flat over the next 10 years due to increased use of energy efficiency programs, the power grid operator for the six-state region said on Friday.
"When the effects of energy efficiency are included, the forecast shows essentially no long-run growth in electric energy use and 0.9 percent annual growth in annual summer peak demand," ISO New England said in a release.
The ISO issued the demand forecast as part of an annual regional system plan, which its board of directors approved on Thursday.
That plan also said distributed generation, mostly from solar power at residential, corporate and government sites, is growing rapidly in New England and is expected to reach more than 2,000 megawatts by the end of 2021, up from the current 250 MW.
That 2,000 MW represents about 7 percent of the ISO's all-time peak demand record of 28,130 MW, which was set in the summer of 2006.
The more consumers generate power for themselves, the less they need to buy from the grid, which is bad news for the region's generators who are already struggling with low prices and the prospect of no demand growth over the next decade.
The ISO said it convened a working group to develop strategies to address the potential negative effects of high levels of distributed generation on system reliability.
The ISO also said it has developed several strategies to deal with the growing use of natural gas to produce power in the region.
The ISO said natural gas-fired plants produced 52 percent of the electricity generated in New England in 2012. That is up from just 15 percent in 2000, the ISO has said.
The rest of the generation in the region came from nuclear plants at 31 percent, hydro at 7 percent, renewables at 7 percent, coal at 3 percent and oil at less that 1 percent, the ISO said.
Generating companies meanwhile have announced plans to shut coal and oil-fired units and a nuclear reactor as the low cost of gas due to record shale production has reduced power prices, making it uneconomic to upgrade older, less efficient plants to meet increasingly strict federal and state environmental rules.
Separately, the ISO said power companies in June completed the installation of 40 phasor measurement units or synchrophasors.
The phasors provide data to the grid operator and utilities that can be used to optimize the flow of power on the high-voltage lines and improve reliability by reducing system disturbances, the ISO said.
In addition, the ISO said power companies plan to invest about $5.7 billion in the transmission system over the next five years, including projects in the Boston area, Maine and elsewhere in Massachusetts, Connecticut and Rhode Island.
The biggest power companies in New England include units of National Grid Plc, Northeast Utilities, Iberdrola SA, NextEra Energy Inc, Dominion Resources Inc , Entergy Corp, Exelon Corp, NRG Energy Inc and Public Service Enterprise Group Inc.