Analysis: MISO adds 1.3 GW of capacity, mostly wind; 5.2 GW of projects withdrawn

The Midcontinent Independent System Operator has designated 1,273 MW of new generation as in service since mid-March, almost all of it wind, but 5,093 MW of generation projects – wind, solar, battery storage and natural gas – have been withdrawn, a report generated Tuesday shows.

The MISO Generation Interconnection Queue report also shows 4,460 MW of capacity that is under construction with negotiated in-service dates in the first half of 2020 or earlier. Of this amount, 3,650 MW is to be wind generation, 705 MW is gas-fired, 55 MW is hydro and 50 MW is solar.

Just 25 MW of the newly in-service capacity is gas-fired combustion turbine capacity in Mississippi, while the remainder is wind capacity scattered across Illinois, Indiana, Minnesota and South Dakota.

Campbell Faulkner, senior vice president and chief data analyst at OTC Global Holdings, an interdealer commodities broker, said, "That amount of fresh wind with very little firm dispatchable resources is extremely alarming."

"The concern stems from the continued (discussed and otherwise) retirement of the nuclear fleet across North America," Faulkner said in an email Tuesday. "Without solid baseload and dispatchable large resources, the control authority could find itself in trouble during an extremely high load day. The assumption that resources outside of the MISO control district will just 'be there' for import in event wind is not able to adequately dispatch is also a risk that could lead to tough times during either a summer or winter high load event."

But Joshua Rhodes, a research associate at the University of Texas Energy Institute, said the latest MISO GIQ report "just continues to show what the markets are favoring."

Matthew Cordaro, a former MISO CEO who now resides in New York, said, "It is not surprising to see so much demand for wind power, given that the price of natural gas power is so low. Indeed, there are many market and political disincentives against new construction of natural gas power."

PANDEMIC EFFECTS

Almost 2.8 GW of the 5.1 GW project capacity withdrawn since mid-March would have been solar generation, and more than 2.1 GW of the withdrawn capacity would have been wind.

"It would also not be surprising to see more projects of all kinds withdrawn in the first half of 2020," Cordaro said in an email Tuesday. "This is principally because of the COVID-19 pandemic, which has sharply driven down demand for electricity. Even when the 'curve flattens' and things start to return to normal, it will take some time for electricity demand to fully rebound in many places."

UT's Rhodes said, "Withdrawals are to be expected given the numbers of safe-harbored projects in queues around the country that just didn't find a buyer in time."

SHIFT TOWARD RENEWABLES

The Organization of MISO States/MISO Survey of resource adequacy shows that MISO's generation mix is shifting dramatically away from coal and toward natural gas and other resources. Here is how the survey's projections for the 2024 resource mix compares with that of 2005:

• Natural gas: 42% in 2024, 7% in 2005
• Coal: 33% in 2024, 76% in 2005
• Nuclear: 8% in 2024, 13% in 2005
• Demand response or behind-the-meter generation: 8% in 2004, included in "Other" in 2005.
• Other: 4% in 2024, 4% in 2005.
• Wind: 3% in 2024, included in "Other" in 2005
• Solar: 2% in 2024, included in "other" in 2005

Last week, MISO released the results of its Planning Resource Action for the 12 months beginning June 1, which indicated that all areas except Lower Michigan would have sufficient resources nearby to meet load, but the capacity price for Lower Michigan's Load Resource Zone 7 hit the cost of new entry cap of $257.53/MW-day, as it is expected to have "insufficent zonal capacity to meet Zone 7 Local Clearing Requirement."