US Midcontinent ISO, states eye possible 2.1 GW capacity shortfall in 2025

The Midcontinent Independent System Operator could have a capacity shortfall as soon as summer 2025, and capacity deficits in 2028 and beyond could be impacted by MISO's plans to tighten its capacity accreditation, MISO staff said during a July 14 webinar.

"We are projected to go into a deficit two years out, starting in the summer of 2025-2026, which grows in subsequent years," Nick Przybilla, a senior resource adequacy engineer at MISO, said during a meeting to discuss the results of a new survey by the Organization of MISO States and MISO.

MISO is projected to have a 1.5 GW summer seasonal accredited capacity surplus for the planning year that begins June 2024, according to a presentation discussed during the webinar. But the grid operator is projected to have a 2.1 GW summer seasonal accredited capacity deficit for the planning year that begins June 2025, growing to a deficit of 9.5 GW in summer 2028, the presentation said.

"Seasons other than summer are showing sufficient yet declining capacity over the survey horizon," Przybilla said regarding the MISO footprint.

Looking at just the North and Central regions, summer seasonal accredited capacity could be 0.5 GW short starting next summer, the presentation said. And MISO South could be 0.8 GW short in winter starting in the 2027-2028 planning year, the presentation said.

MISO North and Central had 4.7 GW excess capacity in the capacity auction for the 2023-2024 planning year that started June 1, but the North and Central regions had a 1.2 GW shortfall in the auction for the planning year that started June 1, 2022.

Downside risks

The situation could be more dire in the near term if generation additions continue at their historical pace of 2.5 GW per year, rather than the faster pace envisioned by current generator interconnection agreements, the presentation said. Under the less optimistic generator addition projections, the shortfall in summer 2025 could be 4 GW, growing to a deficit of 8.9 GW in summer 2028.

Other factors could improve or exacerbate the capacity outlook, the presentation said. Downside risks include accelerated retirements, continued queue challenges, delays in capacity additions due to supply chain bottlenecks, reductions in imported capacity, higher load growth due to electrification, and having the bulk of new resources have lower capacity accreditations.

Upside possibilities include lower-than-expected load growth, deferred retirements and return to service of suspended resources, additional external resources and additional load modifying resource registrations, the presentation said. Other upsides could include higher accreditation due to improved performance, continued queue improvements, easing of supply chain bottlenecks and lower planning reserve margins than currently projected.

Accreditation worries

Some stakeholders said the survey should have included a warning that MISO's planned accreditation reforms could drastically reduce renewable accreditation.

When MISO moves to a direct loss of load expectation accreditation methodology, accreditation for wind could drop from a 40% to a 14% accreditation value in winter, said Kelly Hunter from Manitoba Hydro. "Does that not mean that about 8,000 MW of accredited wind resources will simply disappear?" Hunter said.

Others raised a similar concern. "We know some type of accreditation changes are coming, MISO has made that clear," said Bill Booth, a consultant for the Mississippi Public Service Commission. "People will be confused, they'll leave this meeting thinking there's going to be surpluses, when in fact it can be shortages," he said.

But MISO staff said the impact of accreditation changes are nuanced. Any accreditation changes would not be implemented for three to four years, Przybilla said. The capacity accreditation changes will also come with planning reserve margin changes, he said. As a result, the finding of the OMS-MISO survey are still valuable and useful in the near-term, he said.